David's New Book

Monday, February 11, 2019

Antibiotics - Play or Pay?

In my last blog I discussed the potential pull incentive proposed in the UK Plan to tackle antimicrobial resistance.  One of the other proposals in the plan was to implement a play or pay policy for companies actively engaged or not in antibiotic research and development. This idea was touted both by Jim O’Neill in the AMR Review and in his recent GARDP blog. I should point out that this is an old idea first proposed (as far as I know) by Dr. Lou Rice at an ICAAC meeting back in 2004.  The idea was not included in the 2004 white paper from the Infectious Diseases Society of America, Bad Bugs No Drugs (no longer available on the IDSA website).  Dr. Rice’s motivation was, in part, related to the marketing of antibiotics by industry that he felt may have helped to foster abuse and, ultimately, increasing resistance.   Play or pay was designed as an incentive for companies to engage or to continue to be engaged in antibiotic discovery and development and as a disincentive for disengagement. The proposal occurred at a time when many large pharmaceutical companies had abandoned the area. 

As is true for all of these attractive-sounding ideas, the devil is in the details. I have never understood exactly how such a policy could be implemented (but I’m happy to be enlightened).  

First, how do we define “company?”I assume that we are targeting large pharmaceutical companies to encourage them to re-engage in antibiotic R&D. I would define them as those with annual revenues of $10 billion or more. Allergan and Celgene would now be included in this group. But, one might ask, what about mid-cap companies like Regeneron, Valeant and others?  I am assuming that small companies would be exempt from play or pay.

Secondly, we must define “research” and “development” and decide if companies must carry out both activities to qualify. My view is that both preclinical and clinical research should be required. What domains must the research include?  Is a therapeutic vaccine effort sufficient? Is research on preventative vaccines or therapies OK? My own opinion is that vaccine research would be excluded from play or pay.  We need new therapeutics such as small molecules, peptides, proteins, antibodies and other similar approaches. Where does research end and development begin? Research could be defined as anything prior to, say, phase II clinical development. That way, phase I trials would be part of discovery research. If companies were allowed to just claim development activities for new therapies, Pfizer would qualify. But if pre-clinical research into new therapeutic approaches were required, Pfizer might not qualify. 

Third, how much should they play or pay?   Obviously, this incentive/disincentive has to be large enough that it works as such. One way to do this would be to require that 10% of a company’s total R&D budget be dedicated to antibacterial research and development. Many large pharmaceutical companies spend around $5-6 billion on R&D. Roche spent much more in 2017 (around $11 billion).  Therefore, the required spend on antibacterial R&D would be between $500 million and $1.1 billion in this scenario. The difference between their actual spend on antibacterial R&D and the 10% number would be the required payment. 

What would happen to any monies that came into the treasury based on this scheme?These funds could be used to support antibacterial research in academia and small companies and could be used to support significant pull incentives for new and needed antibiotics.

Where would the money come from?  Ahhhh! It is virtually certain that these costs would pass right back to consumers regardless of how any play or pay policy is implemented. And this takes us back to square one.  Do we want pharmaceutical consumers to pay or do we want to spread the payments for required antibacterial R&D and pull incentives among all taxpayers?  I vote for the latter.

Thursday, January 31, 2019

The UK Plan

The United Kingdom recently released a 5-year and a 20-year plan for combatting antimicrobial resistance.  These are both worth a careful read – especially if you are interested in efforts on stewardship and research support. (I sent several emails to colleagues within and outside the UK querying them on details on the UK plan, but have had no replies.  The workings of the UK team seem to be shrouded in secrecy.)

Buried in the forward to the 5-year plan is this –

We are leading the way in testing solutions that will address our global failure to incentivise the development of new antimicrobials and alternative treatments. We will test a new model that will de-link the payments made to companies from the volumes of antibiotics sold, basing the payment on a NICE led assessment of the value of the medicines and supporting good stewardship.

There is a great deal in that paragraph – most of which I find opaque. The idea of testing solutions to incentivize the development of new approaches to anti-infective therapies comes from the AMR Review headed by Lord O’Neill and recently reiterated in a blog post by him. The idea is to develop a global consortium to assemble the funding required for such a pull incentive. In their 5-year plan, the UK seems to be saying that they will “test” a model based on “value” of a new medicine to the health care of the nation. The first question is, how can one test an incentive that will surely not be an incentive since it will be unlikely to provide for global value to healthcare. The second question is, how will they determine “value.” And finally, where will the money come from?  If the money comes from an already underfunded NHS, how much money can this possibly be? 

What is “value” in this case?  Is it determined by things like decreased mortality, decreased length of hospital stay, decreased time of disability, increased quality life years,  . . . ? If it is any of these, how will that be determined since this is not usually a robust part of our modern non-inferiority trials that are used to approve antibacterial products? Would we then turn to historical data – either contemporary observational studies, NHS data mining or data from the preantibiotic era? We await further information from the UK in this regard. 

The UK population is around 66 million, the US is about 350 million and Europe is close to 500 million. Saying nothing about Asia and Africa, this makes the UK represent less than 8% of the population of the developed world. Let’s say, for argument’s sake, that the value of a new antibiotic on a global scale is on the order of $2 billion.  Would the UK share then be $160 million? Regardless of how this is calculated, the plan by the UK seems to assure that the pull incentive they alone would provide would not be enough to pull anyone anywhere.  

From a more positive perspective, perhaps their plan is to provide a method to determine value and come up for a number that would hypothetically be the UK share of some global incentive.  Then, their idea is to lead the world to a value based incentive where the cost would be shared among nations or regions. I think this is what they mean by “test.” 

This would be a valuable endeavor, but would probably not provide a significant pull incentive within 2019, which is the time frame many experts believe is critical to saving our antibacterial infrastructure and hence our pipeline of new products from oblivion. 

We all agree that an incentive that provides companies for a reasonable return on their investment in anti-infective therapeutics is an absolute requirement at this point. Such an incentive should, logically, to one extent or another, decrease the reliance of companies on price and sales volume and will thus also support good stewardship for these new products. Given the current urgency, I strongly believe that our default position for 2019 is to provide a market entry reward (prize if you like) to be awarded for the approval of a high priority antibiotic (as defined by CDC or WHO) on the basis of a contractual agreement with the company involved to guarantee access, manufacturing and distribution and to decide on pricing etc. Other approaches, such as the one being undertaken by the UK, will take too much time, but could inform the market entry reward at a later time. 

Tuesday, January 22, 2019

Musings on Penicillin - Can we Learn From History?

Lately, I’ve been thinking about new approaches to antibacterial therapy. But I keep going back to some old family history. It was 1944.  My father was completing his internship year in New York City. That summer, he took on additional work as a physician for a childrens’ camp in Connecticut. My aunt, who suffered from type I diabetes, came to visit.  Her parents thought the fresh air and activity would help. Soon after arriving, she developed a staphylococcal breast abscess. My father tried treating her with sulfonamides, but her condition deteriorated rapidly.  She was hospitalized in Manhattan delirious with positive blood cultures. The family gathered, arriving from Chicago, thinking she would not survive. My father knew that penicillin was available for use in our troops fighting overseas and he had heard that the army would supply the drug for emergency use through public health offices around the country.  He called the public health commissioner for the City of New York and was able to obtain penicillin for my aunt.  With intravenous penicillin, she recovered rapidly. She lived another 25 years before succumbing to cardiovascular disease complicating her diabetes.

 During the bad old days of the FDA meltdown (starting around 2000, accelerating in 2006 and reversed by 2012), we used to speculate whether penicillin could even be developed and approved today. I think that for intravenous penicillin in 1945 the answer is a resounding yes.  But for oral penicillin – the answer is maybe. For oral penicillin, what clinical indication could one study?  The requirements to study very severe skin and soft tissue infections might preclude the use of an oral drug.  Clinical trials in pneumonia might work, though. For streptococcal pharyngitis, the FDA guidance has been withdrawn. Then, imagine if we did not know about the frequency of hypersensitivity reactions to penicillins (as we might not have known in 1944-5).  After marketing penicillin we realize that about 1 in 7000 treated patients develop a serious allergic reaction and death occurs in 1 in 67,000 to 1 in 70,000 treated patients (Idsoe O, Guthe T, Sillcox RR, de Weck AL. Nature and extent of penicillin side-reactions with particular reference to fatalities from anaphylactic shock. Bull World Health Organ 1968; 38: 159–88 – see this link).  What would happen then? I presume that intravenous penicillin approved for serious infections would remain approved with some warning label. But oral penicillin would probably be restricted to the treatment of pneumonia and approval withdrawn for other indications. 

One question I have asked my friends at FDA is – how was penicillin approved in 1945?  I don’t yet have a clear answer.   Apparently this information is very hard to find – especially in the midst of our current government shutdown.  But I believe that we will find that the approval of penicillin was based on published papers including experiences such as I described above.  In that case, this is, in part, like approving a drug based on external controls where all clinicians can agree that the treatment effect is very large.  I also think that this is a principle we should consider today for new therapies that have obvious dramatic ameliorative effects in otherwise deadly circumstances.  Case examples can be found among patients treated for severe, antibiotic-resistant  sepsis with custom-designed bacteriophage cocktails (e.g. Development and Use of Personalized Bacteriophage-Based Therapeutic Cocktails To Treat a Patient with a Disseminated Resistant Acinetobacter baumannii Infection. Schooley RT, Biswas B, Gill JJ, Hernandez-Morales A, Lancaster J, Lessor L, Barr JJ, Reed SL, Rohwer F, Benler S, Segall AM, Taplitz R, Smith DM, Kerr K, Kumaraswamy M, Nizet V, Lin L, McCauley MD, Strathdee SA, Benson CA, Pope RK, Leroux BM, Picel AC, Mateczun AJ, Cilwa KE, Regeimbal JM, Estrella LA, Wolfe DM, Henry MS, Quinones J, Salka S, Bishop-Lilly KA, Young R, Hamilton T. Antimicrob Agents Chemother. 2017 Sep 22;61(10). pii: e00954-17. doi: 10.1128/AAC.00954-17 – see this link).  This case example is complicated by the use of concomitant antibiotics and the emergence of bacteriophage resistance during therapy.  And these sorts of complicating issues may also undermine our belief that the miraculous clinical improvement seen in this case was due to the bacteriophage therapy.  Treatment today is so much more complicated that it was in 1944-5. Nevertheless, those taking care of the patient in this example remain convinced that bacteriophage therapy was in large part responsible for this patient’s survival just as my father was sure that penicillin cured my aunt. 

Another observation from my musings is that whatever the new therapy is that we contemplate, its clinical effect must be dramatic and measurable in a way that convinces clinicians (and regulators) that it is a valuable addition to our treatment paradigm. This remains our challenge. Would it also be a challenge for penicillin if it were to be developed today as one of the first antibiotics? 

(I apologize if it seems like these considerations are circular and go on forever - but I thought I would share anyway). 

Wednesday, December 26, 2018

Antibiotics in 2019?

Antibiotic R&D has had a particularly bad year starting with The Medicines Company who abandoned their antibiotic R&D efforts and sold their antibiotic assets to Melinta late last year right after getting approval for vabomere.  This year both Sanofi and Novartis abandoned their antibiotic R&D efforts and divested their clinical and preclinical assets.  Allergan, holder of the North American rights to ceftaroline, dalbavancin and ceftazidime-avibactam, also announced that they would divest their antibiotic assets. I have not heard that they were successful.  Achaogen has now undergone two efforts at “restructuring” involving virtually eliminating all R&D and has essentially put up the “for sale” sign just after achieving approval for plazomicin. Finally, Melinta abandoned their antibiotic R&D efforts in the face of miserable sales of their recently launched antibiotics including delafloxacin and vabomere. 



For the last decade, we have seen the emergence of biotech as the primary antibiotic discovery and development engine replacing the large pharmaceutical companies that have continued to flee the area. Now, it seems, even biotech has hit the brick wall of the broken antibiotic market. 

Recently, Tetraphase gained approval for eravacycline, a new synthetic tetracycline with activity against resistant pathogens. They have priced the drug such that it will be easier for hospitals to put the drug on their formularies – but their limited label (only for intraabdominal infections) will still limit their sales prospects. Their current market cap is a miserable $58 million. Will Tetraphase achieve a successful launch in the face of all the other antibiotic launch failures? 2019 will provide the answer.

Nabriva recently submitted two NDAs for two antibiotics. IV fosfomycin for urinary tract infection is used throughout the world but was never approved in the US. Nabriva purchased Zavante Therapeutics to obtain this asset and filed an NDA for complicated urinary tract infection this year. Lefamulin was discovered and developed by Nabriva (I was involved in getting lefamulin through early development) and targets community acquired pneumonia. Nabriva’s second NDA this year is for lefamulin. Nabriva’s current market cap is $80 million. Once again, 2019 will be the critical year for this emerging biotech company attempting to launch important new antibiotics. 

What does 2019 have in store for the three large pharmaceutical companies that still maintain antibiotic R&D? This year a new biotech, Prokaryotics, licensed a number of preclinical antibiotic assets from Merck.  What antibiotic discovery activity still remains at Merck?  I am guessing that this is a minimal effort. At the same time, Merck continues to sell the antibiotics it acquired from Cubist, tedizolid and ceftolozane-tazobactam – but sales have been slow at best. Merck continues its development of imipenem-cilastatin-relebactam at a slow pace. Will Merck continue beyond 2019?

The antibiotic R&D effort at GSK has teetered on the edge of the precipice for years. A recent announcement that, with a new CEO, GSK will invest more in oncology and immuno-inflammation while continuing to focus on its top therapy areas: respiratory conditions, HIV and infectious diseases. Announcements like these in the past have not been harbingers of good news for antibiotics researchers. 

Roche, the third large pharmaceutical company still committed to antibiotics R&D, like Novartis, has its main research site in Basel, Switzerland. But most of the antibiotic interest in the company comes from its Genentech subsidiary in California. Will Roche follow the Novartis example in 2019 or will Genetech convince management to persevere?

Without large pharma and their deep pockets, investors are more hesitant to invest in R&D projects. Public-private partnerships like CARB-X and others have, to a certain extent, taken on some of the burden from venture capitalists for antibiotic discovery activity. But even well-funded efforts like CARB-X are likely to come crashing into the sharp rocks of the broken antibiotics market and the lack of big pharma interest. 

Given the events of the last year and the outlook for new antibiotic launches, I believe 2019 will be the most critical year since most of pharma abandoned antibiotics at the turn of the last century. I fear a catastrophic collapse of antibiotic R&D and commercialization in the absence of government efforts to bolster the broken marketplace for these essential medicines. 















Thursday, December 13, 2018

Why is this so hard?

The budget (FY 2017) for the Center for Medicare and Medicaid Services (CMS) was $1 trillion – with a T. In this budget, we pay top price for drugs including $100,00 cancer drugs. CMS would also pay for expensive antibiotics if hospitals would only stock them so they would be available to their physicians and patients. If this is true, why is it so hard to come up with a $2 billion dollar investment as a pull incentive to encourage antibiotic R&D? I don’t get it. 

Of course I see some minor issues here.  An incentive that is given as part of a contract with a pharmaceutical company might seem like a price negotiation – and that is forbidden by law (why???) at CMS. But FDA Commissioner Scott Gottlieb has proposed that CMS simply buy, upfront, a large supply of a new antibiotic fulfilling CDC’s priorities thus guaranteeing a market for any company succeeding in getting such a drug approved. This would work and seems within CMS’s authority.  Would they even need additional budget to cover this given their already existing budget figure? What is stopping this from happening?  I see no evidence of follow-up by CMS.

Other pull incentives would almost certainly require legislation. My current understanding is that the REVAMP bill proposing a transferable exclusivity voucher (conveyance) will not progress because of bipartisan agreement that exclusivity should not be commoditized. This is unfortunate since this would have been a valuable approach – although the bill would have required significant revision to put in place a few guardrails such that we were not spending many billions unnecessarily. 

A simple market entry award providing a payment of up to $2 billion over several years as part of a contractual arrangement with a company achieving approval of a priority antibiotic would work.  In one version of this model, the price the company could charge for the antibiotic would be capped throughout its marketed life.  In a second version (hybrid model) the price cap would be gradually lifted to provide incentive for the company to continue to be active in supporting the new antibiotic but also to encourage the entry of generics at the end of exclusivity for the new drug. I prefer the hybrid model here.  Again, these would require legislation with the HHS being the recipient of the funding. 

Since antibiotic sales are global, the cost of these pull incentives could be offset by similar incentives implemented by other countries. In any legislation or policy the secretary of HHS could be required to track such incentives offered around the world and use those to offset the US contribution.  So we’re talking about figure that will certainly be less than $2 billion per new and desperately needed antibiotic. In FY 2017 the US federal government spent almost $4 trillion (with a T). Discretionary spending was about $1.1 trillion.  So – again – why is this so hard?




Friday, November 30, 2018

Melinta - Are We Getting the Message?

Along with Achaogen, Melinta has now announced a corporate restructuring where they will amputate virtually all of their R&D efforts and may close their New Haven facility.  This is occurring just after they received approval from Europe to market Vabomere (meropenem-vaborbactam) similar to how Achaogen’s reorganization rapidly followed the US approval of their plazomicin. This is becoming a repetitive pattern of success breeding failure in the antibiotic space. 

Expensive development programs followed by disappointing launches are chasing investors from antibiotics.  Over the last year, Melinta’s share price has dropped 85% and their current market capitalization is around $120 million. 

As I have noted previously, when companies and analysts overestimate the potential market for an antibiotic, disappointment when reality is finally confronted is inevitable. This, in my view, contributed to the situation now facing both Achaogen and Melinta.  But the greatest problem facing all antibiotic companies is the utterly broken antibiotic marketplace. 

I feel that 2019 will be a make or break moment for the antibiotic market. Either we will come together to provide solutions to the broken market, or we will see a continuing and catastrophic exit of companies, large and small, and a sharp erosion in investor confidence and therefore in funding for antibiotic commercialization. This situation may have a dramatic effect on the willingness of organizations such as CARB-X, the Wellcome Trust and others to continue investing in antibiotic R&D since there may be no chance for any resulting products to be successfully commercialized and delivered to the patients who need them. 

European data now clearly demonstrate that the burden of antibiotic resistant infection on the population equals the burdens of tuberculosis, influenza and HIV infection combined. 

We must obtain and then (appropriately) use new antibiotics active against resistant infections.  To continue to use ineffective and toxic polymyxins rather than spend the money on available, safe and effective new products is unforgivable (see this).

Once again, I implore everyone to continue the drumbeat on their political representatives to tackle the broken antibiotic market such that we can replenish our woefully inadequate pipeline of products. The US congress will clearly not act before January.  But they may never act unless we can do a better job than we have been doing to make them understand the severity of the problem and the seriousness of the threat we are now facing.  Europe must also act - either as national authorities one by one or, preferably, as Europe.  A little help from Japan, China, Korea and other Asian countries would also be extremely useful.  But we must get this done and 2019 is the year!

Monday, November 12, 2018

Antibiotic Awareness Week - Talk vs. Action?

This is antibiotic awareness week. To mark this week, there has been a great deal of talk and the publication of several important papers and workshops on antibiotics and resistance. At the same time, just after having achieved approval for their new antibiotic, plazomicin, Achaogen has downsized once again essentially jettisoning their R&D effort to focus on commercializing their new product. Why? Because they do not have enough money because investors do not believe their product will be very successful.  And why is that? Just look at the antibiotic marketplace. 

In the US, our National Academies of Sciences, Engineering and Medicine just published a report of their workshop, Understanding the Economics of Microbial Threats. The workshop was held by the Forum on Emerging Infections first established by Josh Lederberg and on which I was honored to serve for seven years. For those of you who have followed this topic or this blog, the workshop report offers little new in terms of the economics of antibiotics and antibiotic resistance.  It does provide an analysis by the workshop group of the National Academies, perhaps our most prestigious scientific body, which reports and supports what many have been saying for many years now.  The antibiotic market is broken and it will take government action on a global scale to fix it.  If we do not act, antibiotic resistance will continue to rise without a sufficient influx of new antibiotics to combat this threat. 

Specifically, the workshop report quotes a RAND study estimating the global cost of resistance by the year 2050 to be anywhere from $13-120 trillion dollars in reduced global GDP depending on various assumptions and discounting variables. This is similar to the $100 trillion dollar estimate from the O’Neill commission in the UK. 

The report acknowledges that pull incentives are essential to providing a means for companies to achieve a return on their R&D investment in new antibiotics. It notes that there is some debate as to which pull incentives would be best.  There seems to be an emerging consensus that pricing adjustments will not be successful (since they have not worked as yet). The preferred incentive may be a transferable exclusivity voucher – but the report does not provide details.  The report suggests that industry and government work together to better define what an appropriate pull incentive would be. My own view is that industry input is important, but must be taken at arm’s length. 


Around the same time the NAS report appeared, the European Centers for Disease Control published a report estimating the disease burden of antibiotic resistance in Europe.  They estimate that resistance is responsible for 33,000 deaths annually in Europe based on modeling.  This is not so different (given our population differences) with the 23,000 deaths in the US according to our CDC.  The ECDC paper also estimates the increase in disability-adjusted life years attributable to resistance showing very impressive increases associated with resistant infection. My own guess is that both US and European estimates are low. It is extremely difficult to gather reliable data in this regard simply because death certificates are rarely granular enough to provide insight into the importance of an antibiotic resistant infection in the demise of any given patient. So these estimates are all based on varying mathematical models. 

In the NAS workshop report, Ramanan Laxminarayan was quoted.  He “also pointed out that the way to think about AMR’s consequences on human health needs to go beyond only focusing on the death tolls from drug-resistant pathogens. He highlighted that AMR deeply affects care-seeking behaviors. He described a scenario in which an elderly patient might forgo a hip replacement surgery because of the higher associated risk of a postoperative infection and has to live with a bad hip for several more years. He reiterated that behavioral adaptations in response to not having access to effective antibiotics or any antibiotics at all are likely to be significant, and he urged the audience to think about these often overlooked ramifications.”

This provides much for us to consider during this antibiotic awareness week. My own takeaway from all this is – blah blah blah!! At this point, we need action. We need to invest in our future and that of our children now – not 10 years or 30 years from now. To those of you in responsible positions of government – you have no excuse to refrain from acting. This threat is too important for us to ignore.