Good afternoon, Madam Chair and honourable members of the standing committee.
My name's Kevin Outterson. I'm the Austin B. Fletcher professor of law at Boston University and the founding executive director of CARB-X, which is the world's largest non-profit partnership supporting the development of treatments, vaccines and diagnostics to combat AMR. CARB-X is proud of the fact that Canada has supported CARB-X since 2023.
I'm going to focus my remarks today on point four—Canada's role in financing innovation, a complementary mix of push and pull incentives to support new antibiotics—but I have to say that the first two witnesses were excellent, and I support what they said as well.
For more than a decade, reports from around the world, including the review on AMR from the United Kingdom, official communiqués of the G7 and the G20, and, most recently, reports from Global AMR R&D Hub—of which Canada is a board member—have all emphasized the importance of combining both push and pull incentives to accelerate innovation and fix that broken market for antibiotics.
In most therapeutic areas, like cancer or something, the best new drugs are rapidly and widely used by doctors and patients. That leads to robust sales, because people want to use the new, innovative drug, but for antibiotics, we take a very different approach. We keep the best new drugs on the shelf for the first five to 10 years, so resistance is delayed. We prioritize preserving their precious power through stewardship. Now, this is excellent for public health, and it's the right thing to do, but it drives the companies behind these drugs into bankruptcy if we pay them based on only the volumes used, especially in those early years.
I served as a member of a different Council of Canadian Academies expert panel, with the “Overcoming Resistance” report issued two years ago. It built on the prior CCA report, including the one that Dr. Wright was on, and the pan-Canadian action plan. The consensus from that report is that without new incentives, the antibiotic innovation pipeline remains perilously thin, and Canadians will lack access to new antibiotics...worse than any other G7 country. It also concluded that both push and pull incentives were needed to restore health to this pipeline and to protect the foundations of modern medicine from assault from these bacterial infections.
Push and pull incentives effectively address different parts of the same problem. Push incentives, like what Dr. Wright was just calling for, SBIRs in Canada, reduce the cost and risk of developing new antibiotics. CARB-X is an example; SBIRs or basic research funding are other examples. Pull incentives, on the other hand, reward successful development—something that makes it to approval—but ensure that the companies can sustain production and support stewardship once the antibiotic reaches the market. The United Kingdom today has the best working example of a pull incentive. Both of these are essential. They work together.
Canada has already begun to act on this challenge on many levels, including through the Public Health Agency of Canada's—PHAC's—investment in CARB-X over the past two years. CARB-X is supported by six G7 governments, including Canada, and three charities. Our important role has been recognized by the G7, G20 and UN General Assembly. Twenty-two of our supported products, so far, have entered human clinical trials, which is a remarkable success at this stage.
We hope that our important partnership with the Canadian government continues—it's been represented by PHAC in the past but, now, also by the newly established Health Emergency Readiness Canada, HERC—and that it will continue at a level commensurate with other G7 governments. This would be approximately $6 million Canadian per year from Canada. The U.S. government contributes about $55 million Canadian per year, Germany $15 million and Italy about $12 million.
Push incentives lower the cost of R and D, but we also need the pull. They replace revenues lost, because we're careful with these antibiotics in the early years, but they need to reflect the broader social value of these antibiotics. They're necessary to keep these late-stage investors—as we'll hear from Dr. Skinner in the next panel—coming into the market.
Earlier this year, with colleagues, I published a paper in one of the Lancet journals, talking about the fair share gap in antimicrobial innovation. It calls for each member of the G7 to pay their fair share of the innovation costs without free-riding. Currently, only two countries across the EU and G7 have achieved fair share: the United Kingdom and Italy. Canada, I'm afraid to say, came in last place, because the two drugs evaluated are not available here in Canada yet. The paper calls for Canada to contribute its fair share, which I calculated, in that paper, to be approximately $13 million U.S. in revenue per new drug, per year, in Canada, out of the global total of $363 million U.S.
If we do this and continue the efforts of both push and pull, I'm confident that Canada can help to address its part in solving this global problem.
Thank you.