Antibiotics, an important but tricky business, says Shionogi CEO

Producing antibiotics remains imperative but production is hindered by an unattractive business model, says Shionogi CEO. Pull incentives are needed to ensure safe, global supplies of vital drugs.

Dr Isao Teshirogi, President and CEO of Japanese pharmaceutical company, Shionogi, spoke in-depth with Euractiv’s Christoph Schwaiger about the challenges of producing antibiotics in a turbulent and testing market. 

CS: How important is it for the world to be focusing on tackling AMR at the moment?

IT: The COVID-19 pandemic gave the world a chance to recognise the threat of infectious diseases. AMR is known as the silent pandemic. In 2019 alone it’s estimated that it was directly responsible for 1.27 million deaths globally. That number could reach 10 million deaths by 2050, mostly in low- and middle-income countries.

These are astonishing figures but people still aren’t realising that AMR is so deadly.

Having said that, in the last decade or so, many companies developed AMR products. But the majority of them failed financially. That led to fewer people, universities, and venture companies being interested in doing business in the AMR space.

So on the one hand we clearly anticipate that AMR will lead to more people suffering, but fewer people are interested in developing technologies because of past business failures. We need to think about how to build a bridge between these two gaps.

Shionogi is committed to AMR, mainly because we’ve been in the infectious disease business for so long. But if the world is not able to help us in terms of future AMR activities, even I'm not confident I'm able to continue.

CS: Assuming you do continue, how does Europe fit in Shionogi’s plans over the next years?

IT: When we first launched our reserve antibiotic, many people were sceptical about our success. But I’m very proud of my people in Europe who’ve consistently shown people the importance of the AMR product.

We might not have had great commercial success yet, but gradually we have accumulated experience which will lead us toward this commercial success. Europe is one of the keys to our success in terms of emphasising the importance of AMR products.

We’ve been increasing our headcount in our European subsidiary and we expect to keep on increasing it in different departments.

This year Italy is hosting the G7 following the one hosted by Japan. In previous years the UK has been the champion in bringing AMR to the attention of the world. With Europe leading the way in terms of highlighting the importance of AMR, we have big expectations for the summit.

CS: The G7 could be an important forum and Shionogi has proven successful in different markets. But how would a company go on to shape such a global issue that needs the input from so many different stakeholders?

IT: It’s an excellent point and we're not able to do everything ourselves. We do our best to keep an open dialogue with various stakeholders including governments, health authorities, and organisations such as the Bill & Melinda Gates Foundation. I myself talk with Japanese politicians and ask them to convey the importance of AMR when they meet their counterparts from other countries.

Also, it might be a small success, but the Japanese government agreed to introduce pull incentives for AMR products. It’s the second G7 country to do so, following the UK.

Overall, the main thing we can do is to never give up and to keep the dialogue going.

CS: This dialogue would need to happen around the world for it to be successful. How are we going to ensure that regions that are struggling more than others will be part of this success and can benefit from global access to antibiotics?

IT: The support from the market in Europe and the United States inspires us to expand to regions with lower incomes. We were the first company in Japan to sign an agreement to distribute our antibiotic to low- and middle-income countries.

It wasn’t easy because the antibiotic is hard to manufacture, but we managed to get it manufactured in India. We’ll continue to transfer technology to as many countries as possible.

CS: Boosting production sounds helpful, but how do you balance this with maintaining good stewardship in terms of responsible antibiotic use?

IT: That’s one reason why we keep asking G7 countries and others to introduce pull incentives.

Take for example good manufacturing practice. It disqualifies our antibiotic manufacturing plants from being used to produce other drugs. Once we commit to building a facility to produce antibiotics we want to keep it up and running practically forever.

However, this creates a dilemma. Because at the same time, we’d be creating a product that’s best used as little as possible. This is why we need help from advanced countries, such as the G7 countries, for pull incentives.

Preparing for the next disaster means maintaining at least minimum levels of scientific know-how and manufacturing.

CS: What's going to motivate companies to stick to antibiotics when so many are heading in different directions?

IT: It almost feels like a responsibility of Shionogi to do so. I’ve been the CEO for 16 years so I think I have reasonable support from all the stakeholders, including my shareholders. Once I leave, I don’t know what my successor will do. But as long as I’m there, I think it’s something that should be done.

Another relevant point is pricing. Some oncology products cost as much as $100,000. Reluctantly, people accept it because once a family member has cancer, extending their life by two years could feel like it’s worth that $100,000.

When it comes to antibiotics, the drugs could also save someone’s life. If they’re young, that means allowing them to grow older. Yet if their price were to also be $100,000 people would find it too expensive.

If the price isn’t high enough, that makes commercial success harder to achieve. Companies will objectively analyse the business model of the antibiotic and will probably conclude it’s not worth it. Given the choice between cancer products, stroke products, and others, the business model for antibiotics is probably the last one a company would want to pick.

CS: Finally, from your perspective as a Japanese pharmaceutical company is there anything you wished your European and American counterparts would better understand about your worldview?

IT: I think Japan, Europe, and the US should build a strong allied commitment. When you think about the starting products for antibiotics none of our countries have enough capacity to keep up with production needs.

During the pandemic, Europe, the US, and Japan started to recognise the importance of having the starting products in-house.

It’s not realistic for us to maintain a global capacity separately. Even if Japan has some, Europe some, and the US some also we’d probably still not reach China’s level.

But I think we need to be having deeper discussions about securing our supply chains. Not just for antibiotics but for practically all anti-infectious disease products because as we’ve seen during the pandemic, we might not have enough capacity to keep up with the demand when the need arises.

So when thinking about the future, I think the G7 countries should be thinking about how they could work together to maintain this level of security. I think it’s a real threat.

This interview has been edited for clarity and brevity.

[By Christoph Schwaiger I Edited by Brian Maguire | Euractiv's Advocacy Lab ]