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Antibiotics: Jim O’Neill thinks we need $2B for new drugs

As the list of drug-resistant bacteria grows, a $2-billion fund for research into new antibiotics is needed, according to a report by ex-Goldman Sachs economist Jim O'Neill.

O'Neill – perhaps best known as the man who coined the term BRICs to describe the fast-emerging economies of Brazil, Russia, India and China – warned that the global economic cost of inaction could be as much as $100 trillion.

In another string to his bow, the renowned financier also entered British politics on Thursday, becoming Commercial Secretary in the Treasury for the newly reelected Conservative government.

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In a report published Thursday, he argued that research into antimicrobial resistance should be kickstarted by a global innovation fund worth $2 billion over 5 years.

The fund, to be financed by drug companies, would provide firms with funding for the risky, expensive early stages of drug research.

Overuse of existing antibiotics, both in humans and animals, has helped create the problem of "superbugs" – bacteria resistant to antibiotics.

"No new classes of antibiotics have been created for decades and our current drugs are becoming less effective as resistance increases," O'Neill said in a statement about the report, which is backed by the U.K. government.

"We need to kick-start drug development to make sure the world has the drugs it needs, to treat infections and to enable modern medicine and surgery to continue as we know it."

There are very few big pharma companies carrying out research into new antibiotics, partly because the market isn't very valuable, and partly because there are already plenty of treatments available.

As decisions in drug development are often made decades in advance, and the scale of the problem of drug-resistant bacteria has only emerged in the past few years, the industry is lagging behind.

The consequences of a lack of antibiotics could be extremely serious. Many operations cannot be carried out safely without the drugs.

"Antibiotic resistance is a hugely complex problem with potentially devastating consequences for public health," Patrick Vallance, president of pharmaceuticals R&D at GSK, one of the few companies still conducting antibiotics research, said in a statement.

"We are very encouraged by the ideas set out to modernize the economic model to encourage investment in research and ensure reasonable returns for successful innovation while discouraging unnecessary use of new antibiotics."

In Westminster, O'Neill's new boss, Chancellor of the Exchequer George Osborne, tweeted his "delight" at the appointment.

O'Neill, who is 58-years-old and was born in Manchester in northern England, will help promote regional devolution and rejuvenation the the North.