One possible solution would be to split the world into regions, with different front-line and reserve anti-biotics in each region.  In other words, antibiotic A would be front-line in North America and B,C &amp; D would be held in reserve for resistant cases, while B would be front-line in South America, C in Europe, D in South Asia, etc.  New anti-biotics would be allocated a new front-line territory by splitting existing territories. So when antibiotic X is developed, then e.g. North America is split in to East (uses A) and West (uses X), providing a market for X. This solution also has the advantage that it shrinks the population which is using each antibiotic regularly, increasing its useful lifetime.<p>Of course, this solution ignores issues of varying toxicity and side effects (not every antibiotic is equally appropriate for front-line use) and anti-trust issues.  If an ordered schedule for reserve antibiotics was used, the same principle would apply, just one step farther up the reserve schedule.  So, if no one wants to use your antibiotic because it is very harsh, but if your antibiotic is first choice among the harsh reserve antibiotics in some region, it will at least get used some, perhaps enough to pay for development.  Anti-trust issues could be dealt with by splitting the regions along jurisdictional lines, or by international agreements.  Because this proposal is pro-competition (because new entrants are granted new territories) it also may suffer less regulatory ire than most collusion agreements.