Wednesday, July 23, 2014

Antibiotics - Misguided and Paralyzed

Back when I wrote my book during 2009-10, I was disappointed and frustrated with the US efforts at antibiotic regulation compared to the rational and advanced view in Europe. Europe made the development of new antibiotics against resistant infections a top priority for their regulatory body – and the EMA (European Medicines Agency) came through. The US had no such stance and it took the frustration of a few leaders in the upper management of the FDA to finally realize that they were driving on the wrong side of the road and taking us into a head-on collision.  Although the results of their “reboot” are not perfect, and there are a number of things I would like to change (particularly their endpoints for trials), I think that as far as regulatory reform goes, we have come a long way since those dark days when I was hammering away at the keyboard.

Our next challenge is to do the best we can to contain resistance and at the same time to be prepared for its inevitable emergence. In facing this challenge, no one, not the US, not Europe, not Asia, no one is anywhere near ready. We have task force after task force working on the problem and mostly coming up with the same old same old. The GAIN act in the US is a great example.  Politicians crow about how they are helping in the fight against resistance while not spending precious taxpayer dollars.  But the GAIN act has not been sufficient to entice large pharmaceutical companies to get back in to the antibiotic R&D effort. And that result was predictable and predicted by yours truly among many others. The best thing about the GAIN act was that it required the FDA to get its act together. But on the business side, it offered only a patent exclusivity extension that was modest at best for antibiotics active against resistant strains.  This benefited only a small number of small companies that had products facing the end of their patent lives when they were introduced to the market.
If we want to restrict the use of antibiotics to avoid the emergence of resistance for as long as possible, the first thing to do is to restrict their use in agriculture.  In spite of statements by the PCAST – I believe this is a no-brainer.  Next - we have to provide a business model that makes sense.  The GAIN act is not going to cut it and the industry has demonstrated that by, for the most part, voting with its feet. Although two companies have re-entered the antibiotics game in recent years (Sanofi and Roche), many more have left. Now we have AstraZeneca threatening to depart as well.

In an article that appeared in the New York Times today, the industry decries the increasing cost of bringing new therapies to market and notes that antibiotics are on the bottom of their priority list because their return on investment is so low.  But it doesn’t have to be that way.  In the same article, the ex-head of R&D at Pfizer, John LaMantina says that firms are pursuing niche diseases and orphan indications where the return is lower but where the costs are much lower. Antibiotics of the future are going to fit in exactly that scenario – they will be niche products that will cost less to develop and will bring in less total dollars, but where the value will be attractive.  If, that is, we can get our societal act together and make sure that happens.

What business models would work and how would this effect taxpayers and governments?  First – we all must realize that there is no free lunch.  Either we spend money on antibiotics that can cure resistant infection, or we pay the price in longer hospital stays, more time on ventilators and in lives lost. My choice is the former- I don’t know about you. 

1.  The traditional pricing model.  This is what Gilead is doing with Solvadi – its new drug for Hepatitis C infection. In this scenario, small numbers of patients with demonstrated infection with a resistant pathogen or with a high risk for such would receive an antibiotic active against the resistant strain and pay up to $30,000 for a course of therapy.  The cost would be covered by health insurance, medicare, Medicaid, government and other payers in the US and by the national health authorities in Europe (good luck there).

2.  Guaranteed government purchases.  Here, governments would guarantee a certain upfront purchase of the antibiotic at the time of approval by the regulatory agencies. The price charged per course of therapy in each country would depend partly on the amount of its advance purchase. This serves to de-link the drug to some extent from the need for the company to spend money on marketing.  Marketing costs about 25-30% of total sales of any antibiotic. Also, the guaranteed purchase, coming right after approval, not only saves marketing spend that is normally especially intense at launch, but also increases the overall value of the antibiotic by decreasing its associated costs.

3.  The wild card patent exclusivity.  This is something I pushed with the Infectious Diseases Society during the preparation of their Bad Bugs No Drugs white paper. In this formulation, a drug company that brought forward a new antibiotic would be allowed to have 6 months to two years of additional patent exclusivity on another drug of their choice.  For example, Pfizer might have been able to have additional time to sell its branded Lipitor that was selling $15 billion per year. When the IDSA tried to lobby this in congress, they met a brick wall.  The generic manufacturers, insurers, and almost everyone else was against it. 

But look – we have to pay somehow.  I offer a few choices for how we might pay – but I am sure there are lots of other choices that I have not considered.

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