Antibiotic development and the pharmaceutical industry: an examination of the 2012 Generating Antibiotic Incentives Now Act, the counterintuitive market for antibiotics research and development and the need for profit maximizing policy solutions

There is growing concern within the public health community that the rapid decline of new antibiotics over the last two decades, coupled with the adaptive nature of bacterial infections, could lead to widespread disease without effective treatments. It is difficult for pharmaceutical companies to recoup the billions of dollars invested in the research and development (R&D) of new antibiotics because bacterial infections are treated with older antibiotics first and for short dosage periods to stymie antibiotic resistance. Without a means to recoup their R&D costs and enduring shareholder demands for profit-maximizing endeavors, many companies shut down their antibiotics labs in favor of more profitable medications, like those for chronic illnesses that require continual administration for extended periods. In an effort to stimulate more antibiotic R&D, the United States passed the Generating Antibiotic Incentives Now (GAIN) Act in 2012 to motivate companies to bring more antibiotic treatments to market. This paper aims to explain the supply and demand problems of the current market for antibiotics and analyze GAIN’s impact on R&D investment. After examining the amount of antibiotics in clinical trials before and after the GAIN Act, there was insufficient statistical evidence to support the hypothesis that GAIN altered the behavior of companies. This Act does not offer enough incentives to counteract the unique market anomaly antibiotics present. Without a continual robust antibiotic pipeline, bacterial infections, including new strains of antibiotic-resistant infections, will be untreatable. This study has public health significance because highlights the urgent nature of providing additional incentives to companies that invest in antibiotics R&D, without which, there will be few options to treat bacterial infections in the future