Recognizing that the conventional antibiotic market does not reliably reward the development and preservation of needed drugs is only the beginning. The harder question is what should replace or supplement it.
“Pull incentive” is often used as shorthand, but subscriptions, revenue guarantees, market-entry rewards, milestone payments, and transferable exclusivity vouchers work differently. They reward different stages, distribute risk and cost differently, and create different obligations.1,2
The design question therefore matters more than the label. A sustainable antibiotic market has to provide rewards large enough to influence investment, signal those rewards early enough to affect development decisions, distinguish meaningful innovation from marginal additions, reduce dependence on sales volume, and preserve access and supply after approval.
No single mechanism currently accomplishes all of those goals.
The Reward Has to Be Large Enough to Change Decisions
A pull incentive matters only if it changes the expected value of successful antibiotic development. A payment large enough to keep an existing product available in a small market may still be too small to persuade companies and investors to undertake another uncertain development program.
There is no established universal figure for the “right” reward. Estimates vary according to assumptions about research and development costs, probabilities of technical and regulatory success, expected conventional sales, payment timing, and degree of delinkage. One economic analysis estimated that a partially delinked global pull incentive might require approximately $1.5–$2.2 billion, while modeled fully delinked 10-year subscriptions reached approximately $3.3–$8.9 billion under different assumptions. These are modeled estimates, not agreed prices for antibiotic innovation.2,3
The more important point is what the payment is intended to change. Covering the cost of maintaining supply, preventing withdrawal from a small market, encouraging late-stage development, and altering investment decisions years before approval are different objectives and may require very different levels of support.
Push and pull funding consequently address different parts of the problem. Push funding reduces development cost and risk before a product succeeds. Pull incentives increase the value associated with successful progress or market entry. Major policy analyses have therefore supported combinations of both rather than treating either approach as sufficient on its own.
A Reward That Arrives Too Late May Not Pull Very Hard
Size is only one part of the investment signal. Timing and predictability also matter.
A developer considering whether to continue an early-stage antibiotic program cannot place much value on a future reward if the eligibility criteria, likely payment, or procurement rules will become clear only shortly before approval. Investors face the same uncertainty. A theoretically substantial reward may exert little influence today if companies cannot reasonably estimate whether it will exist or whether their product will qualify.
The European Observatory on Health Systems and Policies has therefore emphasized reliable early signals, including the possibility of prequalification, so developers can understand whether a program is likely to qualify for future pull support while meaningful investment decisions are still being made.2 Respondents to NHS England’s consultation similarly emphasized stable eligibility criteria and contract certainty when discussing whether the subscription model would influence investment behavior.4
Milestone payments address a related but distinct problem: early signaling reduces uncertainty about future value, while early payment shifts some of that value forward. Payments tied to predefined development milestones can therefore influence programs before approval, although they also transfer more development risk to the payer.5,6
The Market Has to Reward the Right Innovation
More money does not automatically produce the antibiotics health systems most need.
A reward available uniformly to every product crossing a regulatory threshold could encourage development toward the easiest qualifying target rather than the greatest unmet need. John Rex and Kevin Outterson have warned that poorly differentiated rewards could favor minimally innovative products and have argued instead for rewards benchmarked to the value of the antibiotic.7
England’s model also shows the challenge of valuing antibiotics. The Spectrum, Transmission, Enablement, Diversity, and Insurance (STEDI) framework seeks to capture dimensions of value beyond conventional use-based assessment, but estimates can vary with product characteristics, local context, and methodology.8
“Pay for value” is therefore a principle rather than a solved formula. A sustainable system needs to distinguish products that meaningfully expand treatment options from those offering limited additional benefit, while making its criteria stable enough that developers can anticipate what success is likely to be worth.
Selectivity protects public spending from rewarding marginal innovation. Predictability gives companies and investors a usable signal. A functioning market needs both.
Delinkage Is a Spectrum, Not a Switch
Moving away from volume-based reward does not require every model to eliminate per-unit revenue entirely.
Subscription models can provide a largely fixed payment independent of use. Revenue guarantees can preserve ordinary sales while ensuring that total annual revenue does not fall below a minimum threshold. Market-entry rewards can supplement product sales or replace a larger share of expected sales revenue. The degree of delinkage varies substantially across mechanisms.2
Economic modeling suggests that complete delinkage is not automatically optimal under every public-health objective. Barlow and colleagues found that subscription-only payments could perform near optimally when reducing transmission was prioritized, while preserving an antibiotic as a last-line option could favor retaining some payment linked to use.9
The practical question is how much commercial return should remain tied to use and what behavior that residual incentive creates. The answer may differ depending on whether the primary goal is to stimulate new development, maintain availability, or preserve a particularly valuable drug for selective use.
That distinction becomes clearer when the models are examined in practice.
Subscriptions Can Support Innovation and Ongoing Performance
England provides the clearest current example of a health system putting value-based antimicrobial purchasing into practice. The initial model selected cefiderocol and ceftazidime-avibactam for contracts in which payments were separated from the amount of product supplied. England subsequently expanded the approach into a broader antimicrobial subscription procurement framework.10
Under the expanded system, products can fall into annual value bands of £5 million, £10 million, £15 million, or £20 million for England, depending on their evaluation. Regulatory approval alone does not determine the payment; products must satisfy eligibility criteria and undergo value assessment.11
The contracts can also address supply, stewardship, resistance monitoring, and environmental and manufacturing practices, turning the subscription into a long-term exchange of predictable, volume-delinked revenue for continued performance and availability.11,12
Its principal limitation is scale. The House of Commons Committee of Public Accounts has called for evaluation of whether the model changes companies’ efforts to bring new antibiotics to market and noted that the United Kingdom represents only about 3% of the global antibiotic market.13
England therefore demonstrates that sophisticated, delinked procurement can be implemented. It has not yet established that payments at one national level are sufficient to transform global antibiotic R&D.
Revenue Guarantees Can Protect Availability
Sweden’s pilot guaranteed participating companies a minimum annual revenue in exchange for stockholding and rapid delivery, while regional health systems continued paying for antibiotics used, making the model only partially delinked. The Swedish Public Health Agency reports that the pilot improved availability and accelerated access to several newer antibiotics.14
Its main function is therefore continuity and access in a low-volume market, not necessarily changing global R&D incentives. That contrast with England matters: one can protect availability, while the other more explicitly seeks to alter innovation economics.
A sustainable market needs answers to both problems.
Market-Entry Rewards Concentrate Value at Success
A market-entry reward attaches a substantial payment to successful development of a qualifying antibiotic and can vary with unmet need or product value. It may supplement ordinary sales or support fuller delinkage.
The mechanism’s strength is clarity: successful development becomes worth more.
Its weakness is timing and durability: a payment at approval may arrive too late to influence earlier investment unless eligibility is predictable, and a one-time reward does not itself ensure supply, access, or stewardship.
PASTEUR Illustrates the Contract Model
The proposed Pioneering Antimicrobial Subscriptions To End Upsurging Resistance (PASTEUR) Act of 2026 shows how detailed a subscription-style pull mechanism can become. For now, it remains proposed legislation, not current U.S. policy.15
The bill proposes annual payments between $75 million and $300 million for qualifying antimicrobials, reduced by net U.S. sales revenue. Contracts could continue for as long as 10 years. Eligibility would consider contribution to patient care, innovative characteristics, and broader health-system and public-health benefits.
Payment would also carry obligations involving availability, susceptibility testing, resistance reporting, stewardship, supply chain reliability, manufacturing, and environmental practices. That illustrates how a pull incentive can function as a contract for continuing performance rather than a prize for approval.
That is closer to a market architecture than a prize.
Transferable Exclusivity Changes Who Bears the Cost
Under the provisional December 2025 European Union Council–Parliament agreement, a qualifying priority antimicrobial could generate a transferable voucher providing one additional year of protection for another eligible pharmaceutical product, subject to a €490 million annual gross-sales ceiling. The latest Council source still describes the agreement as provisional and subject to formal adoption.16
Unlike a direct subscription or market-entry reward, transferable exclusivity does not require the same type of upfront public-budget expenditure. Its economic cost instead arises through delayed generic or biosimilar competition for the product receiving the extension.17
The voucher’s value is less predictable because it depends partly on the product to which it is transferred. The voucher itself does not guarantee broad antibiotic availability; supply and access conditions must be attached separately.
Its distinguishing feature is where the cost appears: a subscription makes the payer’s commitment visible, while transferable exclusivity shifts part of the burden into another medicine’s period of protected competition.
A Sustainable Market Has to Purchase Continued Performance
England’s subscription arrangements and the PASTEUR proposal both show how payment can be tied to obligations beyond regulatory approval, including stewardship, supply, surveillance, appropriate use, and manufacturing performance.
A larger payment therefore need not function as an unconditional subsidy. It can purchase the continued availability and public-health performance expected from a clinically important antibiotic.
No Country Can Build the Market Alone
Even a well-designed national mechanism faces a problem of scale.
The United Kingdom can alter the economics of supplying antibiotics to the NHS, but its market represents only a small fraction of global antibiotic sales. The Public Accounts Committee has consequently questioned how much the UK program alone can influence companies’ worldwide R&D decisions.13
The Organisation for Economic Co-operation and Development (OECD) identifies the same structural challenge. Subscription incentives may remain too small to influence global development unless one country provides a sufficiently large reward or multiple countries coordinate their contributions.18 The European Observatory likewise argues that effective deployment of push and pull incentives will probably require participation by multiple major economies rather than isolated national programs.2
That introduces a problem no domestic payment formula solves by itself. If the benefits of a newly developed antibiotic extend across borders, countries need some way to aggregate their incentives into a commercial signal large and predictable enough to influence global development.
National programs can demonstrate workable designs. Sustainability ultimately depends on whether those programs add up to a market.
A Sustainable Market Is an Architecture
The evidence does not point to one mechanism that solves every part of antibiotic economics.
Push funding can reduce the cost and risk of development. Milestone payments can move some reward earlier. Market-entry rewards and subscriptions can increase the value of successful development. Revenue guarantees can preserve availability in markets where ordinary sales are too small. Long-term contracts can attach obligations around access, supply, surveillance, and stewardship. International coordination can increase the aggregate reward and distribute its cost across more than one health system.
The appropriate mix remains uncertain, and different products or markets may require different combinations. But a sustainable system must make successful innovation worth enough to pursue, make that value credible early enough to influence investment, direct the strongest rewards toward meaningful need, reduce dependence on increasing antibiotic consumption, and preserve access and supply after approval.
The central question is not simply how much more society should pay for antibiotics, but what that payment is expected to secure.
A sustainable market would reward innovation together with continued availability and responsible use. Sustainability begins when those objectives become parts of the same commercial bargain rather than competing demands.
