National Health Service (NHS) – Pfizer/Shionogi, Antibiotic Supply Agreement

Business model | Regulatory strategy

Annotations

This agreement (“Agreement”) is between National Health Service England (NHS or “Authority“), on the one hand, and either Pfizer or Shionogi (“Supplier” or “Suppliers”), on the other, to supply the NHS with the antibiotics ceftazidime/avibactam and cefiderocol (the “Antibiotics” or “Goods“) using a unique subscription pricing structure intended to incentivize antibiotic R&D while minimizing the risk of antimicrobial resistance (“AMR”) due to over-prescription. Pfizer and Shionogi entered into separate NHS supply agreements in 2022; we understand that this Agreement document reflects the terms of both.

The Agreement provides that the NHS will pay each Supplier a flat £10 million annual fee, regardless of order volume, adjusted only for certain “performance credit” incentives. The intent is to stimulate R&D by ensuring sufficient reimbursement for which demand otherwise might be irregular or weak due to AMR stewardship.

Pfizer and Shionogi must satisfy a set of monthly, quarterly and annual performance standards relating to delivery, surety of supply, and AMR stewardship, manufacturing, environmental and surveillance commitments. Performance is categorized into green (satisfactory), and amber and red (unsatisfactory) bands. The AMR stewardship annual commitments are: (1) delinking sales representative remuneration from quantity supplied; (2) compliance with AMR stewardship principles and recommendations of UK health authorities; and (3) supporting AMR education for healthcare workers. Suppliers must satisfy all three commitments to achieve a green level band. Failure to do so may result in a “performance credit” penalty that is deducted from NHS payments.

Provision Language

SCHEDULE 2: GENERAL TERMS AND CONDITIONS

1. Supply of Goods

[…]

1.6 If there are any quality, performance and/or safety related reports, notices, alerts or other communications issued by the Supplier or any regulatory or other body in relation to the Goods, the Supplier shall promptly provide the Authority and any Purchasing Authority with a copy of any such reports, notices, alerts or other communications.

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National Health Service (NHS) – Pfizer/Shionogi, Antibiotic Supply Agreement

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National Health Service (NHS) – Pfizer/Shionogi, Antibiotic Supply Agreement

Provision Language

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