Work Package 2 , Task 9 : Preliminary Simulation Report

• This report presents the preliminary results from the antibiotic R&D pipeline simulator created within WP2/Task 9 of DRIVE-AB. The simulator is built using a combination of Agent Based and Monte Carlo simulation techniques and has been designed to explore intervention mechanisms aimed to stimulate the development of new antibiotics. • The purpose of the simulator is to simplify the complexity of reality by focusing on important elements of the development process of future antibiotics at an aggregate level. The structure and components of the simulator mirror the typical core development phases and decisions in R&D projects, which are driven and influenced by different types of actors (e.g., small and medium size enterprises, big pharmas, and venture capitalists). • The simulation provides results of the effects of intervention mechanisms currently being investigated by DRIVE-AB under the particular conditions specified in the report. These results are intended to support decision making in regards to these intervention mechanisms, but do not deal with any questions pertaining to their implementation. • The simulation has explored variations and combinations of two kinds of intervention mechanism: Grants (a push incentive), and Market Entry Rewards (MERs, a pull incentive), with full or only partial de-linkage from sales and first narrowly focused on “hard to discover antibiotics” (which we term “Type A”) and then broadly focused so to include also “easier to discover antibiotics” but still targeting societal needs (which we term “Type B”). • A Fully Delinked Narrow MER (whereby all revenues for a developer come from the MER and none from sales) awarded for bringing a “hard to discover antibiotic” of “Type A” to market shows positive effects over the status quo without intervention which presents on average less than two new Type A antibiotics reaching market in 30 years. Specifically, the introduction of $500Million MERs for such a type of antibiotics makes the number of market approvals double to 4 antibiotics over 30 years. Increasing the size