Incentives for phage drug development

Issue 17 | February 15, 2019
7 min read

A look into government incentives for antimicrobial development, and how they apply to phage therapeutic development.

In addition to patents and trade secrets, which we discussed in previous issues (see part I here, part II here, and part III here), there are other ways of encouraging and protecting investment into phage therapeutics. This week, we’ll discuss government incentives as they relate to antimicrobial/phage development.

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Incentives for phage drug development

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Phage microbiologist and co-founder of Phage Directory
Phage Directory, Atlanta, GA, United States

Jessica Sacher is a co-founder of Phage Directory and has a Ph.D in Microbiology and Biotechnology from the University of Alberta.

For Phage Directory, she takes care of the science, writing, communications, and business aspects.

If phage therapeutics are going to be developed as drugs, at least in the US, there needs to be significantly more investment into their development. With the patentability of phages in question, companies may need to find alternative ways of encouraging and protecting investment into phage therapeutics.

We’ve talked about trade secrecy, which can help, but we haven’t yet talked about the important role government incentives can play in incentivizing drug development, especially drugs related to combating antimicrobial resistance. As phages are becoming more recognized as a part of this category, drug companies seeking to commercialize phages should be on the lookout for government funding opportunities they could be eligible for.

Two main kinds of antimicrobial drug development incentives:

  1. Push incentives: e.g. government provides funds to help get a drug to market. This can be at the level of basic research, preclinical and/or clinical development; essentially, anytime BEFORE the drug makes it to market. Main sources in the US: NIAID and BARDA (which has led to CARB-X, a private-public partnership to accelerate efforts to combat antibiotic resistance).

  2. Pull incentives: e.g. government provides funds as a “reward” for bringing a drug to market. This can help de-link how much money a drug brings in from how much money the drug company makes off of it. This could be especially important for phage-based therapeutics, which could provide a high societal value without necessarily commanding a high revenue. Pull incentives appear to be less common than push incentives, but are being called for in the US (see this recent letter to the US Senate, which was signed by many biotech and pharma companies). The UK recently announced a national plan for combating antibiotic resistance that includes pull incentives for antimicrobial development, which is a good sign that more governments could
    follow suit—see this blog post to learn more

Beyond grant funding

In addition to grant/prize money, some new models for antimicrobial development-related government incentives that have been proposed include:

  • Setting up tax credits for drug manufacturers,
  • Extending medicare coverage for certain drugs to help ensure drugs will be reimbursed properly (a drug on the market that is not actually prescribed by physicians or not covered by insurance policies may not make money, even if it works),
  • Issuing patent-extending vouchers to companies that take a drug to market, which could be sold to larger companies that have their own patents.

At this point, although bills to pass such policies for antimicrobial development have made it to US congress, they seem to have since died. However, times are changing, and this should be an interesting area to watch going forward.

Where do phage therapeutics fit in?

Most discussion of these kinds of incentives has centered around new antibiotic development. However, certain existing programs for combating antimicrobial resistance have funded phage development, and now even name phage (and phage-derived) therapeutic product development when listing what they will fund, which is encouraging.

For example, NIAID has already funded at least seven phage projects (page 803) in response to President Obama’s National Action Plan for Combating Antibiotic-Resistant Bacteria. Additionally, CARB-X, which is jointly funded by BARDA and the Wellcome Trust, recently announced its funding of the phage lysin company ContraFect.

What can you do with this information?

One thing you can do now is take a look at the request NIAID just issued for comments and suggestions on its Antibacterial Resistance Research Framework. In 2014, NIAID laid out 7 approaches for tackling AMR (including exploring phage therapy), and they’re updating these approaches this year. You can submit comments & suggestions here. Deadline: Mar. 8, 2019.

If you’re interested in learning more or following new updates in antimicrobial drug development policy, you can also subscribe to the blog/newsletter of Dr. John Rex, MD at the Wellcome Trust. This was a major source for this issue (thanks Tobi Nagel for the suggestion!).

Thanks for reading this multi-part series, where we covered patents, phage patentability, trade secrecy and, lastly, government incentives, as they apply to phage development.

What we’ve gone over here only scratches the surface when it comes to all the possible legal and government policy-level solutions that could be enacted to help encourage companies to bring phage therapeutics to market. We hope we’ve at least given you a taste of the possibilities that exist!

Thanks for reading!
– Jessica <>={

Main sources:

Kelly Todd. The Promising Viral Threat to Bacterial Resistance: The Uncertain Patentability of Phage Therapeutics and the Necessity of Alternative Incentives, 68 Duke Law Journal 767-805 (2019)
Available at:

John H. Rex. Solutions for Antimicrobial Resistance. Available at:

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