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Antibacterial drug resistance is a global public health threat poised to worsen due to the combination of the inappropriate use of existing drugs and a marked decline in innovative antibacterial drug development. In order to tackle this problem, stakeholders must consider comprehensive strategies that address both drug development and stewardship.

On February 7, the Engelberg Center for Health Care Reform convened an expert workshop, “Modernizing Antibacterial Drug Development and Promoting Stewardship” to explore a two-pronged approach to combating antibacterial drug resistance that includes: 1) the development of pathogen-focused antibacterial drugs that target the most serious public health threats; and 2) stewardship efforts for all antibacterial products in order to preserve their utility. Participating stakeholders included experts from the drug development and health care industries, the clinical community, government, and academia. These stakeholders shared their insights on potential frameworks and evidentiary considerations for pathogen-focused drug development, and efforts underway to promote the appropriate use of commonly used antibacterial drugs in the ambulatory care setting.

Event Materials

• Antibiotic Development Slides
• 07 antibacterial expert workshop discussion guide
• 07 antibacterial expert workshop public agenda
• 07 antibacterial expert workshop meeting summary

       

While antibiotics are necessary and crucial for treating bacterial infections, their misuse over time has contributed to a rather alarming rate of antibiotic resistance, including the development of multidrug-resistance bacteria or “super bugs.” Misuse manifests throughout all corners of public and private life; from the doctor’s office when prescribed to treat viruses; to industrial agriculture, where they are used in abundance to prevent disease in livestock. New data from the World Health Organization (WHO) and U.S. Centers for Disease Control and Prevention (CDC) confirm that rising overuse of antibiotics has already become a major public health threat worldwide.

As drug resistance increases, we will see a number of dangerous and far-reaching consequences. First, common infections like STDs, pneumonia, and “staph” infections will become increasingly difficult to treat, and in extreme cases these infections may require hospitalization or treatment with expensive and toxic second-line therapies. In fact, recent estimates suggest that every year more than 23,000 people die due to drug-resistant infections in the U.S., and many more suffer from complications caused by resistant pathogens. Further, infections will be harder to control. Health care providers are increasingly encountering highly resistant infections not only in hospitals – where such infections can easily spread between vulnerable patients – but also in outpatient care settings.

Fundamental Approaches to Slowing Resistance

Incentivize appropriate use of antibiotics. Many patients and providers underestimate the risks of using antibiotics when they are not warranted, in part because these drugs often have rapid beneficial effects for those who truly need them.  In many parts of the world the perception that antibiotics carry few risks has been bolstered by their low costs and availability without a prescription or contact with a trained health care provider. Education efforts, stewardship programs, and the development of new clinical guidelines have shown some success in limiting antibiotic use, but these fixes are limited in scope and generally not perceived as cost-effective or sustainable. Broader efforts to incentivize appropriate use, coupled with economic incentives, may be more effective in changing the culture of antibiotic use. These options might include physician or hospital report cards that help impact patient provider selection, or bonuses based on standardized performance measures that can be used to report on success of promoting appropriate use.  While these might create additional costs, they would likely help control rates of drug resistant infections and outweigh the costs of treating them.

Reinvigorate the drug development pipeline with novel antibiotics. There has not been a new class of antibiotics discovered in almost three decades, and companies have largely left the infectious disease space for more stable and lucrative product lines, such as cancer and chronic disease. Antibiotics have historically been inexpensive and are typically used only for short periods of time, creating limited opportunities for return on investment. In addition, unlike cancer or heart disease treatments, antibiotics lose effectiveness over time, making them unattractive for investment. Once they are on the market, the push to limit use of certain antibiotics to the most severe infections can further constrict an already weak market.

Late last year, H.R. 3742, the Antibiotic Development to Advance Patient Treatment (ADAPT) Act of 2013, was introduced and referred to the House Energy and Commerce Subcommittee on Health. If enacted, the ADAPT Act would create a streamlined development pathway to expedite the approval of antibiotics that treat limited patient populations with serious unmet medical needs. This could potentially reduce costs and development time for companies, thereby encouraging investment in this space. Regulators have indicated that they would also welcome the opportunity to evaluate benefits and risk for a more selective patient subpopulation if they could be confident the product would be used appropriately. The bill has received a great deal of support and would help address a critical public health need.

Advance new economic incentives to remedy market failure. Innovative changes to pharmaceutical regulation, research and development (R&D), and reimbursement are necessary to alleviate the market failure for antibacterial drugs. A major challenge, particularly within a fee-for-service or volume-based reimbursement system, is providing economic incentives that promote investment in drug development without encouraging overuse.  A number of public and private stakeholders, including the Engelberg Center for Health Care Reform and Chatham House’s Centre on Global Health Security Working Group on Antimicrobial Resistance, are exploring alternative reimbursement mechanisms that  “de-link” revenue from the volume of antibiotics sold. Such a mechanism, combined with further measures to stimulate innovation, could create a stable incentive structure to support R&D.

Improve tracking and monitoring of resistance in the outpatient setting. There is increasing concern about much less rigorous surveillance capabilities in the outpatient setting, where drug-resistant infections are also on the rise. Policymakers should consider new incentives for providers and insurers to encourage a coordinated approach for tracking inpatient and outpatient resistance data. The ADAPT Act, mentioned above, also seeks to enhance monitoring of antibiotic utilization and resistance patterns. Health insurance companies can leverage resistance-related data linked to health care claims, while providers can capture lab results in electronic health records. Ultimately, this data could be linked to health and economic outcomes at the state, federal, and international levels, and provide a more comprehensive population-based understanding of the impact and spread of resistance. Current examples include the Food and Drug Administration’s (FDA) Sentinel Initiative and the Patient-Centered Outcomes Research Institute’s PCORnet initiative. 

Antibiotic resistance is an urgent and persistent threat. As such, patients and providers will continue to require new antibiotics as older drugs are forced into retirement by resistant pathogens. Stewardship efforts will remain critical in the absence of game-changing therapies that parry resistance mechanisms. Lastly, a coordinated surveillance approach that involves diverse stakeholder groups is needed to understand the health and economic consequences of drug resistance, and to inform antibiotic development and stewardship efforts.

       

Antimicrobial resistance is one of the most significant threats to public health globally. It will worsen in the coming decades without concerted efforts to spur the development of new antibiotics, while ensuring the appropriate use of existing antibiotics. Antimicrobial therapy is essential for treating and preventing bacterial infections, some of which can be life-threatening and acquired as a result of
critical medical interventions, including surgery, chemotherapy and dialysis. However, the international rise in antimicrobial resistance has weakened our antibiotic armamentarium and multi-resistant bacteria now cause over 150,000 deaths annually in hospitals around the world (WHO, 2013). Unfortunately, the evolution of drug-resistant pathogens is unavoidable due to random genetic changes in the pathogens that can render antibiotics ineffective. While antibiotic therapy can succeed in killing susceptible pathogens, it also inadvertently selects for organisms that are resistant. Because each exposure to antibiotics contributes to this process, efforts to restrict antibiotic usage only slow the development of resistance. Ultimately, innovative antimicrobial drugs with diverse mechanisms of action will be needed to treat emerging resistant pathogens.

Combating resistance

Inappropriate use of antibiotics contributes significantly to the acceleration of resistance. Needlessly exposing patients to antibiotics (for example, for viral or mild infections likely to resolve on their own), the use of overly broad-spectrum antibiotics and suboptimal doses of appropriate therapy hasten the evolution of resistant pathogens. While affordable, rapid and accurate point-of-care diagnostics are essential for determining appropriate therapy for many bacterial diseases, routine clinical use will be limited if the tests are too expensive or not accessible during routine clinical encounters. In the absence of a clear diagnostic result, many health care providers prescribe empiric broadspectrum therapy without knowing exactly what they are treating. Although inappropriate use is widespread in many parts of the world, where antibiotics are available without a prescription or oversight by a health care provider or stewardship team, overuse abounds even where antibiotic prescribing is more tightly regulated.

Studies conducted in the USA indicate that around 258 million courses of antibiotics are dispensed annually for outpatient use (Hicks, 2013) and up to 75 per cent of ambulatory antibiotic prescriptions are for the treatment of common respiratory infections, which may or may not be bacterial in origin (McCaig,1995). Recent evidence suggests that over half of these prescriptions are not medically indicated. For example, 60 per cent of US adults with a sore throat receive an antibiotic prescription after visiting a primary care practice or emergency department, despite the fact that only ten per cent require treatment with antibiotics. This is particularly troubling given the availability of rapid tests that can detect Group A Streptococcus, the bacteria responsible for the ten per cent of cases that require antibiotic treatment.

The overuse of antibiotics has been driven largely by their low cost and clinical effectiveness, which has led many patients to view them as cure-alls with few risks. This perception is reinforced by the fact that antibiotics are curative in nature and used for short durations. However, the clinical effectiveness of these drugs decreases over time, as resistance naturally increases, and this process is accelerated with inappropriate use. Moreover, there are numerous consequences associated with the use of antibiotics, including over 140,000 emergency department visits yearly in the USA for adverse incidents (mostly allergic reactions; CDC, 2013a). In addition, antibiotics can eliminate protective bacteria in the gut,
leaving patients vulnerable to infection with Clostridium difficile, which causes diarrhoeal illness that results in 14,000 deaths every year in the USA (CDC, 2013b). It is estimated that antimicrobial resistance costs the US health care system over US$20 billion annually in excess care and an additional $35 billion in lost productivity (Roberts et al., 2009).

The inappropriate use of antimicrobial drugs is particularly concerning because highly resistant pathogens can easily cross national borders and rapidly spread around the globe. In recent years, strains of highly drug-resistant tuberculosis, carbapenem-resistant Enterobacteriaceae and other resistant pathogens have spread outside their countries of origin within several years of their detection. Because resistant bacteria are unlikely to stay isolated, stewardship efforts must be improved globally and international attention is needed to improve surveillance of emerging pathogens and resistance patterns.

A major challenge for clinicians and regulators will be to find stewardship interventions that can be scaled-up and involve multiple stakeholders, including providers, drug manufacturers, health care purchasers (insurers), governments and patients themselves. Such interventions should include practical and costeffective educational programmes targeted towards providers and patients that shift expectations for antibiotic prescriptions to a mutual understanding of the benefits and risks of these drugs.

Educational programmes alone, however, will not be sufficient to lower prescribing rates to recommended levels. Pushing down the inappropriate use of antibiotics also warrants stronger mechanisms that leverage the critical relationships between the stakeholders. For example, health care purchasers can play an important role by using financial disincentives to align prescribing habits with clinical guidelines that are developed by infectious disease specialists in the private and public sectors. This type of approach has the potential to be effective because it includes multiple stakeholders that share responsibility for the appropriate use of antibiotics and, ultimately, patient care.

Key obstacles to antibiotic development

The continual natural selection for resistant pathogens despite efforts to limit antibiotic use underscores the need for new antibiotics with novel mechanisms of action. To date, antimicrobial drug innovation and development have not kept pace with resistance. The number of approved new molecular entities (NME) to treat systemic infections has been steadily declining for decades (see Figure 1). Some infections are not susceptible to any antibiotic and in some cases the only effective drugs may cause serious side effects, or be contra-indicated due to a patient’s allergies or comorbidities (e.g. renal failure). There is significant unmet medical need for therapies that treat serious and life-threatening bacterial diseases caused by resistant pathogens, as well as some less serious infections where there are few treatment alternatives available (e.g. gonorrhoea).

Antibiotic development for these areas of unmet medical need has been sidelined by a number of scientific, regulatory and economic obstacles. While the costs and complexity of any clinical trial necessary for approval by drug regulators can be substantial, in part due to the large study samples needed to demonstrate safety and efficacy, the infectious disease space faces a number of unique clinical challenges. Patients with serious drug-resistant infections may be in need of urgent antibiotic therapy, which can preclude efficient consent and timely trial enrolment procedures; prior therapy can also confound treatment effects if the patient is later enrolled in a trial for an experimental drug. In addition, many patients with these pathogens are likely to have a history of longterm exposure to the health care setting and may have significant comorbidities that render them less likely to meet inclusion criteria for clinical trials.

Emerging infections for which there are few or no treatment options also tend to be relatively rare. This makes it difficult to conduct adequate and well-controlled trials, which typically enrol large numbers of patients. However, clinical drug development can take many years and waiting until such infections are more common is not feasible. Another issue is that it may also not be possible to conclusively identify the pathogen and its susceptibility at the point of enrolment due to the lack of rapid diagnostic technologies. Ultimately, uncertainty about the aetiology of an infection may necessitate trials with larger numbers of patients in order to achieve sufficient statistical power, further compounding the challenge of enrolling seriously ill infectious disease patients in the first place.

The need to conduct large trials involving acutely ill patients that are difficult to identify can make antibiotic development prohibitively expensive for drug developers, especially given that antibiotics are relatively inexpensive and offer limited opportunities to generate returns. Unlike treatments for chronic diseases, antibiotic therapy tends to last no longer than a few weeks, and these drugs lose efficacy over time as resistance develops, leading to diminishing returns. The decline in antimicrobial drug innovation is largely due to these economic obstacles, which have led developers to seek more durable and profitable markets (e.g. cancer or chronic disease) in recent decades. There are only a handful of companies currently in the market and the development pipeline is very thin. Changes to research infrastructure, drug reimbursement and regulation are all potentially needed to revitalise antibiotic innovation.

Opportunities to streamline innovative antibiotic development

In the USA, several proposals have been made to expedite the development and regulatory review of antibiotics while ensuring that safety and efficacy requirements are met. In 2012, the US President’s Council of Advisors on Science and Technology recommended that the US Food and Drug Administration (FDA) create a ‘special medical use’ (SMU) designation for the review of drugs for subpopulations of patients with unmet medical need. Drug sponsors would be required to demonstrate that clinical trials in a larger patient population would need much more time to complete or not be feasible. A drug approved under the SMU designation could be studied in subgroups of patients that are critically ill, as opposed to the broader population, under the condition that the drug’s indication would be limited to the narrow study population. The SMU designation was discussed at an expert workshop convened by the Brookings Institution in August 2013. Many participants at the meeting agreed that there is a pressing need to develop novel antibiotics and that such a limited-use pathway could support the appropriate use of newly approved drugs.

The Infectious Diseases Society of America developed a related drug development pathway called the Limited Population Antibacterial Drug (LPAD) approval mechanism. The LPAD approach calls for smaller, faster and less costly clinical trials to study antibiotics that treat resistant bacteria that cause serious infections. Both the SMU and LPAD approaches would allow drug developers to demonstrate product safety and efficacy in smaller patient subpopulations and provide regulatory clarity about acceptable benefit–risk profiles for antibiotics that treat serious bacterial diseases. The US House of Representatives is currently considering a bill¹ that incorporates these concepts.

A recent proposal from the drug manufacturer industry for streamlined antibiotic development is to establish a tiered regulatory framework to assess narrow-spectrum antibiotics (e.g. active versus a specific bacterial genus and species or a group of related bacteria) that target resistant pathogens that pose the greatest threat to public health (Rex, 2013: pp. 269–275). This is termed a ‘pathogen-focused’ approach because the level of clinical evidence required for approval would be correlated with the threat level and feasibility of studying a specific pathogen or group of pathogens. The pathogen-focused approach was also highlighted at a recent workshop at the Brookings Institution (Brookings Institution, 2014). Some experts felt that the approach is promising but emphasised that each pathogen and experimental drug is unique and that it could be challenging to place them in a particular tier of a regulatory framework. Given that pathogen-focused drugs would likely be marketed internationally, it will be important for drug sponsors to have regular interactions and multiple levels of discussion with regulators to find areas of agreement that would facilitate the approval of these drugs.

Antibiotics with very narrow indications could potentially support stewardship as well by limiting use to the most seriously ill patients. Safe use of these drugs would likely depend on diagnostics, significant provider education, labelling about the benefits and risks of the product, and the scope of clinical evidence behind its approval. Because these antibiotics would be used in a very limited manner, changes would potentially need to be made to how they are priced and reimbursed to ensure that companies are still able to generate returns on their investment. That said, a more focused drug development programme with regulatory clarity could greatly increase their odds of success and, combined with appropriate pricing and safe use provisions, could succeed in incentivising antimicrobial drug development for emerging infections.

Endnote
1 H.R. 3742 – Antibiotic Development to Advance Patient Treatment (ADAPT) Act of 2013.

References
Barnett, M. L. and Linder, J. A., 2014. ‘Antibiotic prescribing to adults with sore throat in the United States, 1997–2010’. JAMA Internal Medicine, 174(1), pp. 138–140.

Brookings Institution, 2013. Special Medical Use: Limited Use for Drugs Developed in an Expedited Manner to Meet an UnmetMedical Need. Brookings Institution. Available at: www.brookings.edu/events/2013/08/01-special-medical-use

Brookings Institution, 2014. Modernizing Antibacterial Drug Development and Promoting Stewardship. Available at: www.brookings.edu/events/2014/02/07-modernizing-antibacterialdrug-development [Accessed 11 March 2014].

CDC, 2013a. Antibiotic resistance threats in the United States,2013 [PDF] CDC. Available at: www.cdc.gov/drugresistance/threatreport-2013/pdf/ar-threats-2013-508.pdf#page=25 [Accessed 16 January 2014].

CDC, 2013b. Clostridium difficile. Antibiotic resistance threats in the United States, 2013 [PDF] CDC. Available at: www.cdc.gov/drugresistance/threat-report-2013/pdf/ar-threats-2013-508.pdf#page=50 [Accessed 16 January 2014].

Hicks, L. A. et al., 2013. ‘US Outpatient Antibiotic Prescribing, 2010’. New England Journal of Medicine, 368(15), pp. 1461–1463.
Infectious Disease Society of America, 2012.

Limited Population Antibacterial Drug (LPAD) Approval Mechanism. Available at: www.idsociety.org/uploadedFiles/IDSA/News_and_Publications/IDSA_News_Releases/2012/LPAD%20one%20pager.pdf [Accessed 5 March 2014].

Infectious Disease Society of America, 2012. Limited Population Antibacterial Drug (LPAD) Approval Mechanism [PDF] Infectious
Disease Society of America. Available at: www.idsociety.org/uploadedFiles/IDSA/News_and_Publications/IDSA_News_Releases/2012/LPAD%20one%20pager.pdf  [Accessed 18 January 2013].

Kumarasamy, K. K., Toleman, M. A., Walsh, T. R. et al.,2010. ‘Emergence of a new antibiotic resistance mechanism in India,
Pakistan, and the UK: A molecular, biological, and epidemiological study’. Lancet Infectious Diseases, 10(9), pp. 597–602.

McCaig, L. F. and Hughes, J. M., 1995. ‘Trends in antimicrobial drug prescribing among office-based physicians in the United
States’. Journal of the American Medical Association, 273(3), pp. 214–219.

President’s Council of Advisors on Science and Technology, 2012. Report to the President on Propelling Innovation in Drug
Discovery, Development and Evaluation. Available at:www.whitehouse.gov/sites/default/files/microsites/ostp/pcast-fdafinal.pdf    [Accessed 5 March 2014].

Rex, J. H. et al., 2013. ‘A comprehensive regulatory framework to address the unmet need for new antibacterial treatments’. Lancet Infectious Diseases, 13(3), pp. 269–275.

Roberts, R. R., Hota, B., Ahmad, I. et al., 2009. ‘Hospital and societal costs of antimicrobial – Resistant infections in a Chicago
teaching hospital: Implications for antibiotic stewardship’. Clinical Infectious Diseases, 49(8), pp. 1175–1184.

WHO (World Health Organization), 2010. Fact Sheet: Rational Use of Medicines [webpage] WHO. Available at:
www.who.int/mediacentre/factsheets/fs338/en [Accessed 28 February 2014].

WHO (World Health Organization), 2013. Antimicrobial Drug Resistance [PDF] WHO. Available at: http://apps.who.int/gb/ebwha/pdf_files/EB134/B134_37-en.pdf [Accessed 6 March 2014].

WHO (World Health Organization), 2013. Notified MDR-TB cases (number per 100,000 population), 2005–12. WHO. Available at:
https://extranet.who.int/sree/Reports?op=vs&path=/WHO_HQ_Reports/G2/PROD/EXT/MDRTB_Indicators_map [Accessed 28 February 2014].

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• Antibiotics Stewardship and Innovation

       

After years of warnings from the public health community about the growing threat of antibiotic resistance, yesterday the White House announced a national strategy to combat the growing problem of antibiotic resistance within the U.S. and abroad. The administration’s commitment represents an important step forward, as antibiotic-resistant infections are responsible for 23,000 deaths annually, and cost over $50 billion in excess health spending and lost productivity.  The administration’s National Strategy on Combating Antibiotic-Resistant Bacteria includes incentives for developing new drugs, more rigorous stewardship of existing drugs, and better surveillance of antibiotic use and the pathogens that are resistant to them.  President Obama also issued an Executive Order that establishes an interagency Task Force and a non-governmental Presidential Advisory Council that will focus on broad-based strategies for slowing the emergence and spread of resistant infections. 

While antibiotics are crucial for treating bacterial infections, their misuse over time has contributed to a rather alarming rate of antibiotic resistance, including the development of multidrug-resistance bacteria or “super bugs.” Misuse manifests throughout all corners of public and private life; from the doctor’s office when prescribed to treat viruses; to industrial agriculture, where they are used in abundance to promote growth in livestock. New data from the World Health Organization (WHO) and U.S. Centers for Disease Control and Prevention (CDC) confirm that rising overuse of antibiotics has already become a major public health threat worldwide.

The administration’s announcement included a report from the President’s Council of Advisors on Science and Technology (PCAST) titled “Combatting Antibiotic Resistance,” which includes recommendations developed by a range of experts to help control antibiotic resistance. In addition, they outline a $20 million prize to reward the development of a new rapid, point-of-care diagnostic test. Such tests help health care providers choose the right antibiotics for their patients and streamline drug development by making it easier to identify and treat patients in clinical trials.  

The Need for Financial Incentives and Better Reimbursement

A highlight of the PCAST report is its recommendations on economic incentives to bring drug manufacturers back into the antibiotics market. Innovative changes to pharmaceutical regulation and research and development (R&D) will be welcomed by many in the health care community, but financial incentives and better reimbursement are necessary to alleviate the market failure for antibacterial drugs. A major challenge, particularly within a fee-for-service or volume-based reimbursement system is providing economic incentives that promote investment in drug development without encouraging overuse.

A number of public and private stakeholders, including the Engelberg Center for Health Care Reform and Chatham House’s Centre on Global Health Security Working Group on Antimicrobial Resistance, are exploring alternative reimbursement mechanisms that “de-link” revenue from the volume of antibiotics sold. Such a mechanism, combined with further measures to stimulate innovation, could create a stable incentive structure to support R&D. Further, legislative proposals under consideration by Congress to reinvigorate the antibiotic pipeline, including the Antibiotic Development to Advance Patient Treatment (ADAPT) Act of 2013, could complement the White House’s efforts and help turn the tide on antibiotic resistance. Spurring the development of new antibiotics is critical because resistance will continue to develop even if health care providers and health systems can find ways to prevent the misuse of these drugs.

       

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Antibacterial drugs are a critical component of the nation’s public health armamentarium, and have saved millions of lives by preventing and treating a range of bacterial infections. However, antibacterial drug development has been hampered by challenges unique to the antibacterial drug market, which have stifled innovation and left patients and providers with fewer options to treat increasingly resistant infections. One consequence of the dwindling antibacterial drug pipeline has been a reduction in effective oral antibacterial drug treatment options, which are particularly important in the ambulatory and transitional care contexts. Recent proposals to re-invigorate the antibacterial pipeline are geared towards serious infections treated in the inpatient setting, which may lead to a greater focus on intravenous therapies. However, addressing both current and future needs in the infectious diseases space will require a balanced mix of both oral and parenteral antibacterial drugs.

In cooperation with the U.S. Food and Drug Administration (FDA), the Engelberg Center for Health Care Reform at Brookings held an expert workshop on November 20, 2014, to identify the most promising strategies to support oral antibacterial drug development. Participating stakeholders included experts from the drug development and health care industries, the clinical community, government, and academia. These stakeholders shared their insights on potential regulatory, scientific, and economic strategies to reinvigorate the oral antibacterial drug pipeline. 

Event Materials

• Reinvigorating the Oral Antibacterial Drug Development Pipeline Agenda
• Reinvigorating the Oral Antibacterial Drug Development Pipeline Discussion Guide
• Biographies 20141118
• Reinvigorating the Oral Antibacterial Drug Development Pipeline Slide Deck

       

While antibiotics are necessary and crucial for treating bacterial infections, their misuse over time has contributed to a rather alarming rate of antibiotic resistance, including the development of multidrug-resistance bacteria or “super bugs.” Misuse manifests throughout all corners of public and private life; from the doctor’s office when prescribed to treat viruses; to industrial agriculture, where they are used in abundance to prevent disease in livestock. New data from the World Health Organization (WHO) and U.S. Centers for Disease Control and Prevention (CDC) confirm that rising overuse of antibiotics has already become a major public health threat worldwide.

As drug resistance increases, we will see a number of dangerous and far-reaching consequences. First, common infections like STDs, pneumonia, and “staph” infections will become increasingly difficult to treat, and in extreme cases these infections may require hospitalization or treatment with expensive and toxic second-line therapies. In fact, recent estimates suggest that every year more than 23,000 people die due to drug-resistant infections in the U.S., and many more suffer from complications caused by resistant pathogens. Further, infections will be harder to control. Health care providers are increasingly encountering highly resistant infections not only in hospitals – where such infections can easily spread between vulnerable patients – but also in outpatient care settings.

Fundamental Approaches to Slowing Resistance

Incentivize appropriate use of antibiotics. Many patients and providers underestimate the risks of using antibiotics when they are not warranted, in part because these drugs often have rapid beneficial effects for those who truly need them.  In many parts of the world the perception that antibiotics carry few risks has been bolstered by their low costs and availability without a prescription or contact with a trained health care provider. Education efforts, stewardship programs, and the development of new clinical guidelines have shown some success in limiting antibiotic use, but these fixes are limited in scope and generally not perceived as cost-effective or sustainable. Broader efforts to incentivize appropriate use, coupled with economic incentives, may be more effective in changing the culture of antibiotic use. These options might include physician or hospital report cards that help impact patient provider selection, or bonuses based on standardized performance measures that can be used to report on success of promoting appropriate use.  While these might create additional costs, they would likely help control rates of drug resistant infections and outweigh the costs of treating them.

Reinvigorate the drug development pipeline with novel antibiotics. There has not been a new class of antibiotics discovered in almost three decades, and companies have largely left the infectious disease space for more stable and lucrative product lines, such as cancer and chronic disease. Antibiotics have historically been inexpensive and are typically used only for short periods of time, creating limited opportunities for return on investment. In addition, unlike cancer or heart disease treatments, antibiotics lose effectiveness over time, making them unattractive for investment. Once they are on the market, the push to limit use of certain antibiotics to the most severe infections can further constrict an already weak market.

Late last year, H.R. 3742, the Antibiotic Development to Advance Patient Treatment (ADAPT) Act of 2013, was introduced and referred to the House Energy and Commerce Subcommittee on Health. If enacted, the ADAPT Act would create a streamlined development pathway to expedite the approval of antibiotics that treat limited patient populations with serious unmet medical needs. This could potentially reduce costs and development time for companies, thereby encouraging investment in this space. Regulators have indicated that they would also welcome the opportunity to evaluate benefits and risk for a more selective patient subpopulation if they could be confident the product would be used appropriately. The bill has received a great deal of support and would help address a critical public health need (I cover this topic in more detail with my colleagues Kevin Outterson, John Powers, and Mark McClellan in a recent Health Affairs paper).

Advance new economic incentives to remedy market failure. Innovative changes to pharmaceutical regulation, research and development (R&D), and reimbursement are necessary to alleviate the market failure for antibacterial drugs. A major challenge, particularly within a fee-for-service or volume-based reimbursement system, is providing economic incentives that promote investment in drug development without encouraging overuse.  A number of public and private stakeholders, including the Engelberg Center for Health Care Reform and Chatham House’s Centre on Global Health Security Working Group on Antimicrobial Resistance, are exploring alternative reimbursement mechanisms that  “de-link” revenue from the volume of antibiotics sold. Such a mechanism, combined with further measures to stimulate innovation, could create a stable incentive structure to support R&D.

Improve tracking and monitoring of resistance in the outpatient setting. There is increasing concern about much less rigorous surveillance capabilities in the outpatient setting, where drug-resistant infections are also on the rise. Policymakers should consider new incentives for providers and insurers to encourage a coordinated approach for tracking inpatient and outpatient resistance data. The ADAPT Act, mentioned above, also seeks to enhance monitoring of antibiotic utilization and resistance patterns. Health insurance companies can leverage resistance-related data linked to health care claims, while providers can capture lab results in electronic health records. Ultimately, this data could be linked to health and economic outcomes at the state, federal, and international levels, and provide a more comprehensive population-based understanding of the impact and spread of resistance. Current examples include the Food and Drug Administration’s (FDA) Sentinel Initiative and the Patient-Centered Outcomes Research Institute’s PCORnet initiative. 

Antibiotic resistance is an urgent and persistent threat. As such, patients and providers will continue to require new antibiotics as older drugs are forced into retirement by resistant pathogens. Stewardship efforts will remain critical in the absence of game-changing therapies that parry resistance mechanisms. Lastly, a coordinated surveillance approach that involves diverse stakeholder groups is needed to understand the health and economic consequences of drug resistance, and to inform antibiotic development and stewardship efforts.

Editor's note: This blog was originally posted in May 2014 on Brookings UpFront.

       

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On February 29, the Africa Security Initiative at Brookings held a discussion on Nigeria, nine months after the inauguration of President Muhammadu Buhari, the country’s first president to take office in a peaceful transition of power from one party to another. President Buhari, who previously ruled Nigeria in the mid-1980s after a military coup, inherits a country facing burgeoning population, low oil prices for its top export, and the Boko Haram extremist insurgency in the northeast. Buhari also inherited other problems such as unrest in the country’s delta and southeast regions, and a culture of corruption and human rights abuse and impunity throughout much of the country’s armed forces and police.

Less than a year into his presidency, Buhari has made progress in reforming the military, sacking some military leaders and injecting a bit more energy into the counter-Boko Haram campaign. But has he chosen the right priorities for Nigeria and fundamentally headed in the right direction, and what has been the impact on civilians, particularly in the northeastern part of the country? What additional role, if any, could the United States and the broader international community play to support additional reform?

We convened a panel to discuss these subjects. The panel, made up of independent experts with deep knowledge ranging from human rights to economics and finance to broader political and security sector reform, included EJ Hogendoorn of the International Crisis Group, Madeline Rose from Mercy Corps, Mausi Segun of Human Rights Watch, and Amadou Sy from The Brookings Institution. Senior Fellow Michael O’Hanlon, who directs the Africa Security Initiative at Brookings, moderated the discussion.

 

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• Examining the current state of Nigeria

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• Transcript (.pdf)

Event Materials

• 20160229_nigeria_transcript

      

After decades of neglect, Latin American governments are increasingly focusing on urban slums. What often spurs their policy interventions is a desire to counter violent criminality leaking out from the poor marginalized slums controlled by gangs into the city centers the better-off residents want to keep safe. But tackling the socioeconomic dynamics of slums -- the trap of poverty, discrimination, lack of public goods and social services, and rule by nonstate actors -- is not only complex, but also costly. Governments, elites, and middle classes tend not to want to spend resources on slums. Effective policies have to be sustained for decades, and political will and tax revenues for such complex state-building are frequently scarce.

Focusing on a discreet intervention – providing low-cost housing – becomes tempting. Rarely is it sufficient. The condition of the buildings alone is not what makes a slum a slum. Moving residents from slums to better low-cost housing has encountered systematic challenges not just in Latin America, but also in other places where it has been tried, such as Kenya. Instead, policies need to focus on broader community dynamics, including public safety, legal job creation with sufficient income, human capital development, and robust connectivity of slums to economically-thriving areas, something residents of the latter often don’t want.

Paradoxically, real estate dynamics can have pernicious effects. If broader pacification does take hold and public safety in slums increases, some slum areas can become desirable real estate with vast development possibilities. Developers may well seek to buy the land by offering “better” low-cost housing to slum residents to get them to move. Since many slum residents do not have title to their residences, forced displacement also occurs, albeit under the cloak of being nice to the poor.

Instead of being limited to the provision of alternative residences, policies to address slums need to be about inclusion, economic growth, safety, and connectivity of slums with the thriving city parts, and accountability of city-governance authorities.

This commentary was originally published by the Inter-American Dialogue’s Latin America Advisor. 

      

Nigeria is facing a confluence of troubles: dramatically reduced oil prices have pummeled a country that depends on oil exports for two-thirds of its national revenues; the Boko Haram insurgency continues to wreak havoc particularly in the north of the country, where suicide bombings (many of which are now carried out by kidnapped girls) have killed hundreds; and corruption remains a drain on the country, which ranked 136th out of 168 countries on Transparency International’s 2015 Corruptions Perceptions Index.

But amidst this, Nigeria completed its first peaceful transition of power nine months ago—to Muhammadu Buhari, who has since made some progress in reforming the military, sacking corrupt leaders, and injecting energy into the counter-Boko Haram campaign. 

On February 29, the Africa Security Initiative at Brookings hosted a discussion on the current state of Nigeria, featuring EJ Hogendoorn of the International Crisis Group, Madeline Rose of Mercy Corps, Mausi Segun of Human Rights Watch, and Amadou Sy from Brookings. Brookings’s Mike O’Hanlon moderated the conversation.

As O’Hanlon argued at the start, Nigeria is one of the most important countries in the world, but appears little in policy debates. Nigeria is sub-Saharan Africa’s largest economy, and security risks emanating in the country can have spillover effects. All of the participants stressed that Nigeria should factor more centrally in conversations about international security, economic development, and humanitarian issues.

Nigeria’s ups and downs

O’Hanlon started by framing three overlapping challenges in Nigeria:

• The struggle against Boko Haram, which is more complicated than a pure terror group, but has also pledged loyalty to ISIS.
• The question of reform, to include the army, the police, and the entire government.
• The state of the economy, since Nigerian livelihoods need to be improved if there is any hope to handle the first two situations. 

Hogendoorn praised the peaceful transition of power to President Buhari, calling it a “stunning achievement” for the country and those who helped from the outside. However, the problems facing Nigeria—namely the insurgency in the Niger Delta, declining oil prices, and corruption and government mismanagement (at state and federal levels)—are large, he said. He argued that declining oil prices and income are impacting the government’s ability to fulfill promises, and that state governments are powerful and difficult to reform. He praised some anti-corruption institutions in Nigeria, as well as a number of effective governors who have changed corruption situation dramatically over a short period of time. But in the end, he said, it comes down to good leadership. The Nigerian people must demand accountability. 

Rose detailed how things have changed in Nigeria since Mercy Corps became heavily involved in the area in 2012. Mercy Corps’ main missions there include violence reduction, education, and creating opportunity for young girls, as well as humanitarian response. While there has been progress on chronic violence in Nigeria, particularly in the northeast of the country, Rose stressed that there is much to be done. She concluded that there is not enough attention to the human element of the crisis. For example, Rose noted that displacement is common across the Northeast. The displaced are mainly women and children. In the displaced groups, the eldest becomes de facto head of household—sometimes forcing leading adolescent girls to turn to selling sex for food or money for food. Rose called on the government to address this. 

Segun agreed that the focus needs to change regarding crisis response in Nigeria. In the past, the focus has been almost entirely on a military response. This has not been a workable plan, she said, partly because the “military operates above the law.” The reforms in Nigeria must have a social component, Segun argued. Lack of access to opportunity, economic problems, and desertification of major water bodies have all combined to drive farmers and fisherman from the Northeast and into the heart of the conflict. 

Sy returned to the importance of economic interests in resolving the crises in Nigeria. He reminded the audience that the country is the largest economy of sub-Saharan Africa, and that is important for the entire continent. Since two-thirds of the government revenue comes from oil, the oil shock has dealt a huge blow. But there is hope for Nigeria, Sy noted. One reason is stimulus via investment outside the oil sector. There has been an increase in infrastructure spending, as well as on human development (namely in education and health). In both cases, he said the biggest issue will be implementation. Sy gave four recommendations to the Nigerian government: 1) increase infrastructure expenditure, 2) make government more lean and cost-effective, 3) increase taxation in non-oil revenue items, and 4) reduce corruption. 

Overall, the participants expressed cautious hope for Nigeria despite the problems it faces. The government there still has a long list of to-do’s, but there is reason to believe that it is on the right general track.

      

Editors’ Note: It is time to establish a regional reconstruction strategy for the Middle East, argues Sultan Barakat, that involves collective vision, broad participation, smart security, equality, and other key elements.This post originally appeared in Huffington Post.

The World Bank is hosting its annual Fragility Forum this week with the aim of making progress on the post-2015 Sustainable Development Goals. This week has also seen a fragile ceasefire in Syria, potentially landmark elections in Iran, and a violent clash between Jordanian security and so-called Islamic State members. Together these developments have prompted me to reassess what needs to be done to resolve the issues of conflict and fragility in the Middle East.

For the Middle East, the starting point should be to move away from any process that reinforces the image of the West devising solutions and proposing "new" visions to the region. Such approaches are reminiscent of the Sykes-Picot agreement or the neoconservatives' "grand strategy" of the early 2000s and do not appreciate that the Middle East has changed fundamentally since 2011. The region, at all levels, now expects to be treated with dignity and to be the driving force behind its own development.

It is high time to pull together to establish a "Regional Reconstruction Strategy" that can address all sorts of violence, not just Islamist-related conflict. The region needs an ever-evolving strategy that maintains a holistic, problem-solving outlook while drawing on various forms of intervention (e.g. community driven development, inter-regional development projects, targeted counterinsurgency operations, stabilization, statebuilding, etc.) without being straightjacketed by any one toolkit or template. Novel approaches rooted in genuine regional leadership, broad participation, youth engagement, and the utilization of technology will increasingly need to be applied. The pillars of such a strategy should be a collective regional vision, effective local participation, smart security, reconciliation and justice, equity, reconstruction and development, and capacity.

Collective Vision: With the aspirations of the Arab Spring unrealized and many countries descending into sectarianism, what is needed now is a collective vision that goes beyond national borders. This would include pooling the region's resources, specifically all the ingredients for large-scale development, such as human resources, an educated population, capital, mobility, and nature. We could then look to the day when region-wide development is synergistic and not predatory or a zero-sum game. What Morocco has achieved with solar energy is a shining example—a visionary investment has addressed regional developmental and environmental challenges, stimulated employment, and raised confidence that hi-tech and innovative sectors can thrive in the Middle East. Such a broad vision is crucial if the region is to leapfrog into the twenty-first century and not remain in a vicious cycle of conflict and failed development.

Key to an inclusive and non-adversarial vision will be both accepting and embracing Islam as a majority religion while building on human security as an area of common ground. For this to happen some real changes are required in places such as Iran and Saudi Arabia—which would enable both to exercise their regional leadership in coalescing a constructive collective vision rather than perpetuating sectarian hostility.

Broad Participation: It is important that the regional vision recognizes that development requires an active civil society, a free media, and rooting action and ideas at the local level and with popular participation. The process of engaging in a region-wide consultation where contributions are coming from schools, villages, city halls, political parties, unions, and many other civic forums can help the region start dreaming about what it wants to look like in the 50 years to come.

Smart Security: Instead of a collective vision for development we have one for defense, formed with the excuse of the Islamic State group. All appreciate that a minimum level of security is important for implementing reconstruction, but a lack of security cannot be a pretext to do nothing. Experience has shown that delaying reconstruction efforts pushes people down the slope of conflict and violence and leads to dependence on humanitarian assistance. The region needs to find ways of better understanding the granular texture of security at local and regional levels so that strategies can be developed in which localized insecurity does not hold back development in other areas. This could support "spot reconstruction" efforts that create exemplars of what a degree of stability combined with reconstruction intervention can achieve in the midst of larger instability.

Reconciliation and Justice: No long-term investment in reconstruction can be protected without genuine reconciliation across the region. Twenty years ago the main fault line was Israel-Palestine. Today, there are many additional fault lines that need to be addressed, including Muslim-Christian tensions, tensions between displaced and host communities, and tensions between Sunni and Shiite communities. The most fundamental way to initiate reconciliation is to make sure that the rule of law applies to all and that everyone has access to justice regardless of the mechanism. On this a lot can be built on local and traditional systems for achieving justice and reconciliation.

Equity: A common mistake with reconstruction is that it proceeds without sufficient regulation and monitoring to ensure that benefits are equitably distributed. This region has repeatedly seen how easily reconstruction "lords" (most of whom were previously warlords) can emerge to line their pockets at the expense of the general public, thus perpetuating that country's crisis. World Bank arguments for the private sector to take the lead in reconstruction in Afghanistan and elsewhere have done nothing but strengthen this model. Assad's efforts to liberalize Syria's economy prior to 2011 led to the further enrichment of a corrupt elite, contributing to what we see today. Going forward, reconstruction efforts must take into consideration the poorest and least capable—so that nobody is left out.

Reconstruction and Development: There is an urgent need to find new ways of inducing development through international engagement with the region. The current instability has shifted spending toward security and away from the basics of development. As a result, some of the most important development indicators—freedom of expression, women's participation, poverty, quality of education—have taken a step back. All this is happening when the region is facing financial challenges due to severely reduced oil prices. This may prove to be an opportunity as some countries needed a good wake-up call to the pernicious effects of a model of capital development in which billions of dollars are invested in the West, generating jobs and stabilizing economies thousands of miles away at the expense of the region. If the West wants to help the region it should seek to focus minds within the Arab world on the value of investment in addressing regional problems in a mutually beneficial way. Ultimately a more stable region will lead to more prosperous neighbors both in the East and the West.

Building Capacity: To do this we must invest enormous amounts in fostering sustainable capacity at regional, national, and local levels. It is essential to invest in education at all levels, in particular going beyond primary education to support the young men and women that will become leaders with the conviction and capabilities to rebuild the region. In a rush to capture development, we have focused on the hard sciences, engineering, business studies, and computer science while ignoring our own culture, languages, and history. We must correct this imbalance, and it is time we develop our ideas in our own language and not rely on translation.

For all this to happen, fragility must be addressed within a coherent regional vision, not individual national plans. It would be constructive if the international community and donors would try to view the region as a whole—as one canvas in which to facilitate cross-border mobility of population, capital, ideas, and labor—and encourage regional responsibility with different countries leading in their areas of competency. International partners can support this with new and innovative forms of funding that utilize collateral guarantees from the region, not just individual countries. If we can embrace a truly regional approach, there may be a day when we elevate human dignity and human development above petty politics and sectarianism.

      

For more than a decade, government assistance to Afghanistan, Iraq, and Pakistan (the so-called AIP countries) has dominated United States aid efforts. And as the examples below illustrate, American institutions and mindsets found it extraordinarily difficult to adjust to aid in unsafe places. Cameron Munter draws on his experience as the head of the Provincial Reconstruction Team (PRT) in Mosul, Iraq in 2006 and as ambassador of the United States to Pakistan in Islamabad in 2011, with a description of U.S. reconstruction and state-building from which we may find lessons to consider in the future.

In 2006, when he went to Mosul as the first leader of the first PRT, the American civilian and military authorities in Baghdad painfully learned that the post-conflict situation would not correct itself. The undergrowth of our own bureaucratic structure prevented us from gaining a sophisticated understanding of our surroundings. Members of the PRT came and left after a few months, without passing on their hard-obtained knowledge. Local authorities quickly realized that the PRT had neither the money nor the firepower of the brigade commanders. And most of all, the guiding principles in place were still the creation of a kind of constitutional framework where political leaders, police, courts, businesspeople, and citizens would have institutions familiar to Americans, institutions that would work as we knew how to make them work.

Munter arrived in Pakistan at a time of great hope for U.S.-Pakistani relations. In 2011, in a series of meetings with the U.S. deputy secretary of state for resources and the head of USAID, Kerry-Lugar-Berman priorities took center stage: education, energy efficiency, job creation, special projects in the tribal areas, and public health. It is one thing to define a task and quite another to apply it to the specific context of a country in which security considerations prevent most USAID workers from even laying eyes on their projects. Overall, it seems the United States was much better at measuring its commitment to a prosperous, democratic Pakistan at peace with its neighbors by counting how much it spent and how fast rather than creating the proper relationship with those on the ground with whom it might have partnered.

Under these circumstances, what are lessons learned? When security is shaky, assistance is difficult. It may be that in situations like the AIP countries, we only have the capacity to engage in humanitarian aid and immediate reconstruction. If that is so, then the whole question of engagement in dangerous places is reopened: In a military setting, with military tasks, and thus a military system of organization, can civilian assistance succeed? Money spent is the way we measure commitment in such a setting, and that doesn’t bring the results we need.

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• Imagining assistance: Tales from the American aid experience in Iraq in 2006 and Pakistan in 2011

      

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As Africa's oldest independent country, Ethiopia has a history that is unique in the continent. The country has faced its share of conflict, including a protracted civil war from 1974 through 1991. A land-locked location in Eastern Africa, the country has also been witness to climate catastrophes, — including the drought that killed a half a million people in the 1980s and the threat of a new drought today. Despite being one of Africa's poorest countries, Ethiopia has experienced significant economic growth since the end of the civil war, and a majority of its population is literate. In addition, Ethiopia is a crucial U.S. security partner, particularly when it comes to counterterrorism, in a region plagued by threats.

On April 25, the Africa Security Initiative at Brookings hosted a discussion examining the security situation in Ethiopia, in broader political, economic, and regional context. Panelists included Abye Assefa of St. Lawrence University and Terrence Lyons of George Mason University. Michael O’Hanlon, co-director of the Center for 21st Century Security and Intelligence, moderated.

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• The security situation in Ethiopia and how it relates to the broader region

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• The security situation in Ethiopia and how it relates to the broader region

      

We are kicking off the new Millions Learning video series with a spotlight on Teach For All, one of the 14 case studies examined in the Millions Learning report. Teach For All is an international network of local, independent partner country organizations dedicated to improving educational opportunities for children and youth around the globe. From China to Bulgaria to Peru to Ghana, each partner organization recruits and trains recent top-performing graduates and professionals to teach in their country’s underserved communities for two years, with the ultimate goal of developing a cadre of education leaders, both inside and outside of the classroom.

In this video, Wendy Kopp, CEO and co-founder of Teach For All, discusses Teach For All’s unique approach to building a pipeline of future “learning leaders and champions” and the role that a supportive policy environment plays in enabling this process. Kopp then explains how Teach For All grew from the original Teach For America and Teach First in the United Kingdom to an international network of 40 partner countries, sharing her own lessons learned along the way.

To learn more about Millions Learning, please visit our interactive report, Millions Learning: Scaling up quality education in developing countries, and/or visit our webpage.

Video

• Getting millions to learn: Interview with Wendy Kopp of Teach For All

       

Food safety is not a problem unique to China, though it is certainly one of the country’s most pressing and persistent challenges. On April 28, 2016, the John L. Thornton China Center hosted a public event to discuss food safety in China and what new regulations might mean for consumers and businesses.

Revised food safety law a step in the right direction

China’s revised Food Safety Law, enacted in October 2015, is intended to strengthen the regulation of food companies in China and enhance oversight along the supply chain. The law imposes tougher consequences on violators of food safety regulations. The revised Food Safety Law is a step in the right direction, but improving food safety will require more than just new regulations. Greater inter-agency coordination is needed among the various government entities with regulatory responsibility for food safety, including the China Food and Drug Administration, the Ministry of Agriculture, the National Health and Planning Commission, and the General Administration of Quality Supervision, Inspection and Quarantine.

China has done relatively better in enforcing food safety and quality standards for its food exports than it has for its domestic food market. A disparity between export quality and what is found in local markets is not uncommon in developing countries. But after several large-scale food safety incidents, domestic Chinese consumers are now paying close attention to the quality of their food and are no longer willing to accept such a disparity. Setting and enforcing higher food safety standards domestically is important for maintaining public health and for increasing consumer confidence. The latter will take time but is an indispensable component of the consumption-driven economy that China seeks.

Industry consolidation needed

One of the biggest obstacles facing Chinese food safety regulators is a still-fragmented domestic food industry with many small players. The increase in regulatory requirements and inspections mandated by the new law will raise the costs of doing business and likely lead to industry consolidation, which would help make the domestic Chinese food industry more manageable from a regulatory perspective. Emerging trends that see consumers buying food products from small and perhaps unverified retailers online actually make the jobs of regulators more difficult. This is because products are harder to trace—and, if there is a problem, to recall—when transactions occur through nontraditional retail channels. Traceability is critical to ensuring food safety because it allows problematic food items to be identified. The responsible firm can then correct the situation and each actor in the supply chain can be held accountable.

The Chinese government is already supporting initiatives that aggregate production units at the farm level. These farmer production bases enable farmers to coordinate food production and marketing to larger retailers. Participating farms have been provided with safe pesticides and guidelines on pesticide application; they are also able to sell to large retailers directly. These direct farmer-retailer relationships allow for greater traceability and facilitate the spot-checking that is necessary for verification. This model holds promise for improving food safety, especially as it pertains to pesticide application, but it will need to be scaled up to have a meaningful impact on China’s domestic food market.

What can China learn from other countries?

Since China is not alone in facing food safety challenges, it can learn lessons from the experiences of other countries. According to Vivian Hoffmann of the International Food Policy Research Institute, “there are many ways in which the public sector can harness the capacity and energy of the private sector to make food safety regulation more efficient.” For instance, China could consider greater co-regulation, which is a strategy that involves the private sector in regulation. Allowing firms to give input when regulators are setting standards can help prevent situations where unattainable standards are either crippling for companies or just ignored altogether. Hoffman is clear to note that allowing firms to give input does not mean compromising on consumer safety. Rather, it would create a more transparent process that would allow companies time to work up to higher standards if necessary. Private companies could be involved in testing their own products, but verification testing would still be needed.

Open communication with consumers is also important. The risk-based approach to food safety, which is the international norm and which China has also adopted, entails a particular challenge: Sometimes what consumers think is the most dangerous aspect of the food supply is different from scientists’ perceptions and knowledge of risk. For example, scientists may focus on biological contaminants while consumers worry about pesticides and additives. The concerns of consumers should be taken into account when setting priorities, but experts also need to explain why their concerns may be different. Communication and transparency are essential for bridging this disconnect. Chenglin Liu of St. Mary’s School of Law similarly stresses transparency as a key ingredient in improving China’s food safety situation. Broader capacity building efforts—as it relates to rule of law, an independent judiciary, and independent journalism—will help improve the enforcement of regulations.

The country’s revised Food Safety Law is a step in the right direction, but it is not enough to resolve China’s food safety woes. Regulatory enforcement remains a challenge. Fortunately, it is by no means an insurmountable one. Vigilant consumers will continue to demand higher-quality and more-traceable food products, a trend that puts increasing pressure on regulators to enforce high standards and that also presents great opportunities for proactive businesses.

       

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U.S. policy towards South Asia has changed considerably over the last seven decades. The nature of U.S. engagement with different countries in the region has varied over time, as has the level of U.S. interest. While India and Pakistan have received the most attention from Washington, the United States has also been engaging with Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, and Sri Lanka, albeit to different degrees. 

On May 19, The India Project at Brookings hosted a panel discussion exploring the past and present U.S approaches towards South Asia, based on Senior Fellow Stephen Cohen’s new book, “The South Asia Papers: A Critical Anthology of Writings” (Brookings Institution Press, 2016). Panelists also assessed the Obama administration’s policies toward the region, and the challenges and opportunities that lie ahead for the next U.S. administration. Fellow Tanvi Madan, director of The India Project, moderated the discussion.

After the discussion, the panelists took questions.

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• U.S. policy toward South Asia: Past, present, and future

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• U.S. policy toward South Asia: Past, present, and future

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Extreme poverty around the world has decreased from around 2 billion people in 1990 living under $2 per day to 700 million today. Further, nine out of 10 children are now enrolled in primary schools, an increase over the last 15 years. Progress in both areas since 2000 has been part of the United Nations Millennium Development Goals, which set targets for reducing extreme poverty in eight areas, and which were the guiding principles for global development from 2000 to 2015. Today, the global community, through the UN, has adopted 17 Sustainable Development Goals to continue these poverty reduction efforts. 

In this new episode of Intersections podcast, host Adrianna Pita engages Brookings scholars Laurence Chandy and Rebecca Winthrop in a discussion of how digital technologies can be harnessed to bring poverty reduction and education to the most marginalized populations.

Listen:

Chandy, a fellow in the Global Economy and Development program at Brookings, says that the trends in getting people digitally connected "are progressing at such speed that they’re starting to reach some of the poorest people in the world. Digital technology is changing what it means to be poor because it’s bringing poor people out of the margins.”

Winthrop, a senior fellow and director of the Center for Universal Education at Brookings, says that "I think [education] access is crucial. And I do think that’s almost the first wave because without it we could work on all the ed tech—fabulous apps, great language translated content—but if you do not have the access it’s not going to reach the most marginalized."

Listen to this episode above; subscribe on iTunes; and find more episodes on our website.

Chandy was a guest on the Brookings Cafeteria Podcast in 2013; Winthrop has been a guest on the Cafeteria a few times to discuss global education topics, including: access plus education; investing in girls' education; and getting millions learning in the developing world.

       

While the South African labor market faces many large challenges, some more subtle trends might also be developing that undermine the country’s growth. Yes, the current level of unemployment stands at 24 percent. True, school dropout rates remain high: Only 50 percent of students will make it to the last year of high school, which means that the number of skilled workers in the country remains low. In addition, income inequality in South Africa is an overwhelming obstacle—with the country having one of the highest Gini coefficients (a statistical tool commonly used to measure inequality) in the world—and has been slowing its fight against poverty.

In their recent paper, Demographic, employment, and wage trends in South Africa, Haroon Bhorat, Karmen Naidoo, Morné Oosthuizen, and Kavisha Pillay examine important, perhaps precarious, trends in South African employment, such as the combination of South Africa’s weak educational system and labor demand biased toward skilled workers and the significant rise in temporary employment over full-time positions. However, the authors argue that perhaps the most interesting is the spike in public sector employment and the subsequent development of a new segment of the labor market, what they call a “new elite”: the unionized public sector employee.

The shift to services and the public sector

Like so many of sub-Saharan African countries, South Africa’s labor makeup (as well as contributions to GDP) has swiftly been shifting towards the services sector, especially since 2001. Table 1 clearly shows the dramatic shift in labor towards community, social, and personal (CSP) services and financial services: These two areas accounted for 73 percent of the shift in employment between 2001 and 2012 (Column 3). 

Employment Shares            Share of Change (ΔEi/ΔE) (a)
	2001	2012	(2001-2012)
Primary	0.15	0.07	-0.28
Agriculture	0.1	0.04	-0.2
Mining	0.05	0.02	-0.08
Secondary	0.2	0.21	0.21
Manufacturing	0.14	0.12	0.04
Utilities	0.008	0.008	0.004
Construction	0.05	0.07	0.16
Tertiary	0.63	0.71	1.08
Trade	0.21	0.21	0.2
Transport	0.04	0.6	0.11
Financial	0.09	0.13	0.31
CSPS	0.17	0.22	0.42
Private households	0.09	0.08	0.04
Total	1	1	1

Note: 1. CSPS stands for community, social, and personal services, which is predominantly made up of public sector employment.⁾

2.^(a) The ratio of the percentage change in the share of employment to the overall change in employment over the period (share of change in employment). This measure shows, within each broad sector, where the sources of employment growth are. For example, employment in the tertiary sector is 1.08 times (or 108 percent of) the level of employment in 2001, which is the sum of the changes for all the industries within this sub-sector. CSPS then is the greatest contributor to employment growth in the tertiary sector.

Source: Bhorat et al. (2014) using PALMS dataset (2012).

Importantly, the authors emphasize, the CSP sector, which accounted for 42 percent of this shift, is mostly made up of public sector jobs—hinting that expansion of the public sector has contributed to this trend. The share of public sector employment rose to 17.5 percent by the end of 2014 from 14.2 percent in 2004. In addition, they note that the largest expansion of the public sector came in 2009, just after the global financial crisis, showing that the public sector was more capable of absorbing” excess unskilled and medium-skilled labor at times of economic and labor market distress.”

Another important trend the authors point to within the shift to the public sector between 2008 and 2014 is that a great number of jobs in which employment grew quickly involve unskilled workers (such as sweepers, farmhands and laborers, helpers and cleaners, construction and maintenance laborers, and garbage collectors) and medium-skilled workers (such as police and traffic officers, institution and home-based care workers, prison guards, cooks, and childcare workers) (Figure 1). For a deeper analysis of South African labor market’s skill needs, see the full paper.

Figure 1: Share of change in public sector jobs by detailed occupation (2008 Q1-2014 Q4)

Notes: These occupations are the largest 42 public sector occupations, making up 80 percent of total employment in the public sector in 2014, and 97 percent of the change in the number of public sector jobs over the 2008-14 period.

Source: StatsSA QLFS 2008Q1; StatsSA QLFS 2014Q4; own calculations.

From these trends, the authors infer that the South African government’s Expanded Public Works Program (EPWP)—which “creates jobs through government-funded infrastructure projects, through its non-profit organization and community work program, as well as through its public environment and culture programs”—has played a major part in the expansion of the public sector.

Interestingly, though, the authors also find that overall the public sector has a bigger proportion of high-skilled employees than the private sector), though, between 2008 and 2013 the public sector barely saw a change in its proportion of high-skilled workers. Rather, it experienced its largest growth in the medium- and low-skilled jobs, as noted in Figure 1. They note that this phenomenon suggests that “the state [is] able to absorb excess unskilled and medium-skilled labor at times of economic and labor market distress.” The private sector’s proportion of high-skilled workers, on the other hand, grew by 25 percent. There is then, they say, a “mismatch” between the supply and demand of South Africa’s labor market when it comes to high-skilled workers.

After exploring this trend, the authors also delve into the demographic differences between public and private sector workers. For example, they find that the average public sector worker is older (41 versus 38) and likely to have a higher educational level on average. There are more women in the public sector—52 percent compared to 44 percent. There are also more Africans—77 percent in the public sector (up from 72 percent in 2008) and 66 percent in the private sector (unchanged). The authors argue that these two statistics demonstrate that public sector has “transformed” its labor force at a faster pace since both are groups that historically have been marginalized in the South African labor market.

The impact of unions in the South African labor market

The public sector in South Africa also has a higher unionization rate: 69.2 percent compared to the private sector’s 24.4 percent rate in 2013). As public sector employment has grown, the authors say, so has its proportion of workers in unions. Unions in South Africa are influential, as the authors note, “Powerful labor unions are often associated with creating a wage premium for their members, given their ability to mobilize industrial action and negotiate in favor of their members during times of wage negotiations.”

Indeed, this seems to be the case. Past studies have found that bargaining power—as part of a bargaining council or a union—presents a wage premium.  The authors have similar results: The average public sector worker makes 11,668 rand ($1,209) per month compared to an average private sector employee (7,822 rand per month). Most importantly, though, when the authors disaggregate based on participation in a union, they actually find that, among non-unionized workers, the private sector employee actually receives a higher wage than the public sector worker, by about 952 rand per month. This finding, they say, suggests that the public sector premium might be tied to public sector union membership.

The authors admit a caveat: Public sector union workers tend to be white, older, and better educated than their non-unionized public sector counterparts. In fact, non-union public sector workers are 80 percent African and 10 percent colored[1] (two groups more likely to be under the EPWP). In addition, non-union occupations are usually less skilled (elementary occupations, service and sales occupations, and technical and associate professional occupations). However, they emphasize, “Ultimately though, the wage distributions above suggest that, at least in terms of earnings, a dual labor market may indeed be prevalent in the South African labor market.”  (For the authors’ full quantitative analysis, including an examination of how this trend interacts with state-owned enterprises and temporary workers, see the full paper.)

Thus, they argue, a “new labor elite” is forming.

Note: The African Lions project is a collaboration among United Nations University-World Institute for Development Economics Research (UNU-WIDER), the University of Cape Town’s Development Policy Research Unit (DPRU), and the Brookings Africa Growth Initiative, that provides an analytical basis for policy recommendations and value-added guidance to domestic policymakers in the fast-growing economies of Africa, as well as for the broader global community interested in the development of the region. The six papers, covering Mozambique, Kenya, Ghana, South Africa, Ethiopia, and Nigeria, explore the key constraints facing African economies as they attempt to maintain a long-run economic growth and development trajectory.

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[1] In this paper, “African” is used to refer to people classified by the apartheid state as “native,” “Bantu,” or “black.” “Colored” refers mainly to people in the Western Cape province, and is an ethnic label for people of mixed ethnic origin who possess ancestry from Europe, Asia, and various Khoisan and Bantu tribes of Southern Africa.

       

In 2015 the international community agreed on a set of ambitious sustainable development goals (SDGs) for the global society, to be achieved by 2030. One of the lessons that the implementation of the Millennium Development Goals (MDG s) has highlighted is the importance of a systematic approach to identify and sequence development interventions—policies, programs, and projects—to achieve such goals at a meaningful scale. The Chinese approach to development, which consists of identifying a problem and long-term goal, testing alternative solutions, and then implementing those that are promising in a sustained manner, learning and adapting as one proceeds—Deng Xiaoping’s “crossing the river by feeling the stones”—is an approach that holds promise for successful achievement of the SDGs.

Having observed the Chinese way, then World Bank Group President James Wolfensohn in 2004, together with the Chinese government, convened a major international conference in Shanghai on scaling up successful development interventions, and in 2005 the World Bank Group (WBG ) published the results of the conference, including an assessment of the Chinese approach. (Moreno-Dodson 2005). Some ten years later, the WBG once again is addressing the question of how to support scaling up of successful development interventions, at a time when the challenge and opportunity of scaling up have become a widely recognized issue for many development institutions and experts.

Since traditional private and public service providers frequently do not reach the poorest people in developing countries, social enterprises can play an important role in providing key services to those at the “base of the pyramid.”

In parallel with the recognition that scaling up matters, the development community is now also focusing on social enterprises (SEs), a new set of actors falling between the traditionally recognized public and private sectors. We adopt here the World Bank’s definition of “social enterprises” as a social-mission-led organization that provides sustainable services to Base of the Pyramid (BoP) populations. This is broadly in line with other existing definitions for the sector and reflects the World Bank’s primary interest in social enterprises as a mechanism for supporting service delivery for the poor. Although social enterprises can adopt various organizational forms—business, nongovernmental organizations (NGOs), and community-based organizations are all forms commonly adopted by social enterprises—they differ from private providers principally by combining three features: operating with a social purpose, adhering to business principles, and aiming for financial sustainability. Since traditional private and public service providers frequently do not reach the poorest people in developing countries, social enterprises can play an important role in providing key services to those at the “base of the pyramid.” (Figure 1)

Figure 1. Role of SE sector in public service provision

Social enterprises often start at the initiative of a visionary entrepreneur who sees a significant social need, whether in education, health, sanitation, or microfinance, and who responds by developing an innovative way to address the perceived need, usually by setting up an NGO, or a for-profit enterprise. Social enterprises and their innovations generally start small. When successful, they face an important challenge: how to expand their operations and innovations to meet the social need at a larger scale. 

Development partner organizations—donors, for short—have recognized the contribution that social enterprises can make to find and implement innovative ways to meet the social service needs of people at the base of the pyramid, and they have started to explore how they can support social enterprises in responding to these needs at a meaningful scale. 

The purpose of this paper is to present a menu of approaches for addressing the challenge of scaling up social enterprise innovations, based on a review of the literature on scaling up and on social enterprises. The paper does not aim to offer specific recommendations for entrepreneurs or blueprints and guidelines for the development agencies. The range of settings, problems, and solutions is too wide to permit that. Rather, the paper provides an overview of ways to think about and approach the scaling up of social enterprise innovations. Where possible, the paper also refers to specific tools that can be helpful in implementing the proposed approaches. 

Note that we talk about scaling up social enterprise innovations, not about social enterprises. This is because it is the innovations and how they are scaled up that matter. An innovation may be scaled up by the social enterprise where it originated, by handoff to a public agency for implementation at a larger scale, or by other private enterprises, small or large. 

This paper is structured in three parts: Part I presents a general approach to scaling up development interventions. This helps establish basic definitions and concepts. Part II considers approaches for the scaling up of social enterprise innovations. Part III provides a summary of the main conclusions and lessons from experience. A postscript draws out implications for external aid donors. Examples from actual practice are used to exemplify the approaches and are summarized in Annex boxes.

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On Thursday, July 7, the International Monetary Fund (IMF) revised its economic outlook for South Africa. Despite “considerable economic and social progress” since 1994, the IMF report cited high income inequality, among other factors, in its projection of slow growth and increased unemployment in the medium term. Earlier this year, in the Brookings Africa Growth Initiative’s Foresight Africa 2016, we explored this pressing problem—high income inequality—across the continent. The initial takeaway was that sub-Saharan Africa has greater in-country income inequality than other developing countries around the world. However, after separating seven outlier economies—Angola, the Central African Republic, Botswana, Zambia, Namibia, Comoros, and South Africa—we noted that income inequality, measured by the Gini coefficient, in the rest of the region actually mirrors the rest of the developing world, which currently stands at 0.39. All seven outlier economies have Gini coefficients above 0.55, a level reached by only four other countries worldwide: Suriname, Haiti, Colombia, and Honduras. 

It is important to explore precisely why this disparity exists. Notably, sub-Saharan Africa is not only an outlier in income inequality, but also in the relationship between economic growth and poverty reduction. Generally, in the developing world, every 1 percent of growth reduces poverty 4 percent. In sub-Saharan Africa, however, every 1 percent of growth only reduces poverty by 3 percent. In Foresight Africa 2016, Brookings Nonresident Senior Fellow Haroon Bhorat suggests that this disparity may be because of the commodity booms that have sustained growth periods in African economies, which bring extraordinary returns to capital but limited job growth. Alternatively, these commodity booms may have accompanied a fall in manufacturing output; growth is thus concentrated in the low-productivity services sector. In any case, this graph forces us to consider exactly what type of structural transformation is necessary for continued economic growth and acknowledge that inequality in sub-Saharan Africa might require different solutions in different countries.

For a more in-depth discussion on this issue, see Foresight Africa 2016 and Bhorat’s discussion of African inequality in relation to the Sustainable Development Goals.

Omid Abrishamchian contributed to this post.

       

       

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Barack Obama’s presidency has witnessed widespread change throughout Africa. His four trips there, spanning seven countries, reflect his belief in the continent’s potential and importance. African countries face many challenges that span issues of trade, investment, and development, as well as security and stability. With President Obama’s second term coming to an end, it is important to begin to reflect on his legacy and how his administration has helped frame the future of Africa.

On July 19, the Center for 21st Century Security and Intelligence at Brookings hosted a discussion on Africa policy. Matthew Carotenuto, professor at St. Lawrence University and author of “Obama and Kenya: Contested Histories and the Politics of Belonging” (Ohio University Press, 2016) discussed his research in the region. He was joined by Sarah Margon, the Washington director of Human Rights Watch. Brookings Senior Fellow Michael O'Hanlon partook in and moderated the discussion.

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In 2010, Africa’s leaders gathered at the African Union in Addis Ababa to celebrate 50 years of independence. In Washington, President Barack Obama marked the occasion by hosting a town hall meeting of young African leaders from nearly 50 countries.

What looked at the time to be a curious way to mark a significant moment in the continent’s history was in fact the genesis of what could become the most innovative Obama initiative in Africa. 

When asked during the session by a young woman from Mali why he had convened such a meeting, Obama said that he wanted “to communicate directly to people who may not assume that the old ways of doing business in Africa are the ways that Africa has to do business.” The president added that he wanted the young leaders to meet each other, to develop a network of like-minded people working for a better future, and to reinforce each other’s goals and aspirations.

That town hall marked the launch of the Young African Leaders Initiative (YALI). Over the next two years, YALI engaged Africa’s youth, principally through events coordinated by U.S. embassies throughout the region. Then, during a speech in 2013 in South Africa, Obama announced the establishment of the Washington Fellowship. Subsequently renamed the Mandela Washington Fellowship (MWF), the program initially was designed to bring 500 young leaders to the U.S. for six weeks of executive leadership training at U.S. universities and four days in Washington to meet with each other, leaders in the administration, and to have a town hall with the president. In 2016, the program was increased to 1,000 fellows.

The fellows

When USAID put the application online for the first class of fellows in December 2013, the response was extraordinary. Nearly 50,000 applied for 500 slots. Similar numbers have applied for the two subsequent classes. Over the course of three classes of fellows, there have been 119,000 applications for 2,000 openings.

The U.S. government kept the qualifications relatively simple. Young men and women from each of sub-Saharan Africa’s 49 countries are eligible to participate, including from countries on which the U.S. has sanctions, such as Sudan, Eritrea, and Zimbabwe. Applicants generally have to be between 25 and 35, proficient in English, possess a proven record of leadership, and have a commitment to return to the continent. Fellows apply for one of three tracks: business and entrepreneurship, civic leadership, or public management.

A review of the program found that in the first cohort, the gender split was 50/50, nearly 40 percent owned a business, and a similar number ran a nonprofit organization. Eighty percent of the class had never traveled to the U.S., and more than half grew up outside capital cities.

The key element of the fellows’ program occurs during the specialized six weeks of leadership training that takes place at nearly 40 universities across the U.S. At the universities, the fellows, in cohorts of 20, are exposed not only to programs tailored specifically for their interests, but to other young Africans who share a passion for making a difference in their communities and countries. For most fellows, meeting other young Africans from different countries is one of YALI’s key benefits, as is forging genuine ties with Americans and U.S. institutions.

The narratives of the 2,000 Mandela Washington Fellows illustrate some of the most compelling stories and realities on the African continent today.

Importantly, the MWF program is cost-efficient, as the average cost of a fellow coming to the U.S. is $24,000. At least half is paid by the participating U.S. universities and a host of companies, including Coca-Cola, IBM, the MasterCard Foundation, AECOM, Microsoft, Intel, McKinsey & Company, GE, and Procter & Gamble, who have made grants or in-kind contributions to the fellowships and the YALI program.

YALI’s broader impact

YALI is having an impact on its participants. An initial assessment by IREX, USAID’s implementing partner, found that over 80 percent of male and female fellows who owned businesses reported an increase in earnings in the year following their fellowship in the U.S. Business fellows also leveraged more than $3 million in new sources of support through loans, grants, equity financing, and in-kind contributions.

Fellows who participated in the civic leadership training reported that the impact of their nonprofit organizations nearly tripled to over 1.6 million beneficiaries, with an average contact per fellow increasing from less than 3,000 to just fewer than 15,000 beneficiaries.

Over 80 percent of the fellows reported that they remained in contact with other fellows during the course of the year, and 70 percent indicated they continued to be involved with their host university. The ongoing connectivity is helped by the three regional conferences in Africa that USAID convenes for program alumni, more than 200 internships on the continent—most sponsored by corporate partners—as well as funding for fellows to attend conferences and other programs after they have returned to Africa.

As part of YALI’s broader reach, USAID created four Regional Leadership Centers (RLCs)—in South Africa, Kenya, Ghana, and Senegal—that offer distance and in-class leadership training to about 3,500 participants annually.

The YALI Network (Figure 1) was established in 2013 as a means to stay connected online to the tens of thousands of young Africans who applied for the fellowship but were not selected as well as others interested in the initiative. The network, which provides access to global leaders in relevant fields and opportunities for collaboration on a range of activities, has attracted nearly 250,000 members. Participants in the RLCs and the YALI Network can earn certificates in various courses, including climate change, women’s empowerment, and the election processs.

Figure 1.

Source: YALI Network

YALI, of course is not without its challenges. Recruiting from 49 countries can be exceedingly difficult, and the quality of Skype and telephone connectivity can vary significantly, which impacts the interview process. Due to the high volume of applicants, embassies have learned that they need more time to review applications. Extra efforts have been needed to accommodate fellows with disabilities. YALI’s biggest challenge, though, is winning the support of African leaders who generally have yet to embrace the program due to its unilateral launch.

What’s next?

YALI is a cost-efficient and effective way to invest in Africa’s future, especially as it concerns deepening trade and commerce with the region, strengthening democratic institutions and empowering civil society. If the next administration continues to invest in the program, YALI could become an enduring legacy program of the Obama administration much like the African Growth and Opportunity Act (AGOA) and the President’s Emergency Program on AIDS Relief (PEPFAR) are, respectively, for the Clinton and Bush administrations. Over time, YALI inevitably would contribute to a new generation of transformative African leadership and deeper ties between the U.S. and Africa in a way that few other programs do.