Table 2.

Selected policy options for EU-level incentives for antibiotic research and development.

	Subscription-style paymentsa	Market entry reward	Transferable exclusivity extension	Milestone payments
Targets High-priority medical need	Payments can be greater for antibiotics that target high-priority medical need, and altered as real-world data is generated	Rewards can be greater for antibiotics that target high-priority medical need	Length of TEE can be greater for antibiotics that target high-priority medical need, but the value of TEEs are challenging to forecast	Milestone payments can be prioritised for antibiotics candidates that target high-priority medical need, although difficult to assess potential effectiveness and safety of antibiotic candidates in earlier stages of development
Supports Antibiotic sustainability	Continued payments can be conditional on stewardship requirements. Payments can replace revenues from unit sales, which removes incentives to oversell antibiotics	In case of a one-off reward, stewardship agreements could be challenging to enforce. Alternatively, rewards can be spread over five years.	Stewardship agreements are challenging to enforce as they are one-off rewards.	Milestone payments can include stewardship, patient access, and environmental health agreements but are challenging to enforce as payments made during multiple stages of development and ownership of intellectual property rights may change throughout the development. This can be addressed by attaching these contractual agreements to intellectual property, rather than antibiotic developers.
	If these incentives allow antibiotic developers to retain revenue from unit sales of antibiotics, incentives to oversell antibiotics remain.
Promotes patient access	Continued payments can be conditional on access agreements Ongoing payments can also support the financial sustainability of the antibiotic developer	In case of a one-off reward, access agreements could be challenging to enforce. Alternatively, rewards can be spread over five years.	Can include access agreements, but they are challenging to enforce as they are one-off rewards.
		There is a risk that antibiotic developers may subsequently become bankrupt if the monetary value of these incentives does not recoup antibiotic research and development costs or additional revenue is mismanaged.
Protects environmental health	Continued payments can be conditional on manufacturing standards for environmental health	In case of a one-off reward, environmental health agreements could be challenging to enforce. Alternatively, rewards can be spread over five years.	Can include environmental health agreements, but they are challenging to enforce as they are one-off rewards.
Improves NPV	Improvements in expected NPV are dependent upon what extent payments or rewards reflect antibiotic research and development costs and risk of failure during each stage of development		Likely to provide a substantial size of incentive and significantly improve expected NPV	Increases NPV by reducing the risk of investments in antibiotic development
Enables SME participation	If the size of the incentive is large, then likely to make attracting investment by SMEs at early stages of development more feasible.			Supports SMEs at multiple stages of development. Payments can be targeted to funding gaps, including preclinical and early clinical development
Operational feasibility at the EU level	Proportional payments or contributions by member states to payments or rewards would need to be coordinated by a responsible institution such as the EIB, or HERA		Straightforward to implement at EU level from a regulatory perspective. Many member states are opposed to the use of TEEs	Milestone payments would need to reflect the costs of subsequent stages of research and development Proportional contributions by member states to milestone payments would need to be coordinated by a responsible institution such as the EIB or HERA.
	Responsibility for assessing antibiotic candidates and issuing payments or exclusivity extensions must be designated to a scientific committee or antibiotic pipeline coordinator at the EU level. Roles and responsibilities for monitoring compliance with antibiotic sustainability, patient access, and environmental health standards by antibiotic developers would also need to be designated to relevant institutions at the EU level.
Financial feasibility at the EU level	Impact on EU budgets dependent upon the extent the European Commission shares the financial burden with member states to contribute to subscription payments or rewards		Straightforward to implement as negligible impact on EU budgets	Impact on EU budgets will be dependent upon the extent the European Commission shares the financial burden with member states to contribute to milestone payments
Financial feasibility at national level	The financial burden on member states could be spread over multiple years	If multiple rewards are granted over a short time, they could create a significant short-term financial burden on member states.	The uncertain financial impact on member states, but potentially responsible for high additional costs Auction process could be introduced to limit length of TEEs and financial impact	The number and size of milestones payments or investments by member states could be limited to ensure financial feasibility

^aSubscription style payments are also known as annual revenue guarantees.