Thursday, July 18, 2019
I have a modest proposal that comes from my recent discussions with Brad Spellberg, Lew Barrett and John Rex. I am grateful to all three of these experts for their thoughts on this topic.
To successfully commercialize a new antibiotic, the drug must be shown in clinical trials and via microbiology and PK/PD data to provide advantages that fill a medical need. An obvious example would be if someone markets an oral antibacterial active against MDR pathogens that works clinically in complicated urinary tract infection. The “educational” activities (marketing) required to convince physicians and pharmacists that any new agent should be available to physicians via their hospital formulary or that insurance companies should cover the cost of a new drug in community pharmacies, requires a substantial investment by the company. For a hospital product, I have heard cost estimates from $8 million for a single-indication drug to $30 million for one with multiple approved clinical indications. For a community-based product, this cost could be much greater given the number of physicians, pharmacies and insurance plans one would have to inform.
A number of small companies have drugs in the pipeline in phase 2 or later development. They will all be severely challenged to meet the costs of launch if these drugs are actually approved for the marketplace. A substantial number could face bankruptcy just like Achaogen.
My proposal is that the various societies that promulgate authoritative clinical guidelines intervene either at the time of approval or simply on an annual basis to disseminate key educational information and very focused real-time clinical guidance as to how the new drug should be used. Every guideline has a table summarizing recommended therapies for the clinical indication under consideration. It is this table that could be targeted for modification. By focusing on just the therapeutic recommendations portion of the guideline, the task for societies should be less burdensome that a review of the entire guideline. These societies might include the IDSA, ATS, BSAC, the Society of Infectious Diseases Pharmacists and others. I am not sure how much this would affect initial expenses associated with launch, but it should accelerate uptake of deserving therapies.
To achieve this, sponsors would need to provide a full package of clinical trial, PK/PD and clinical microbiology data to the societies in a timely manner. I suggest that this would occur after the regulatory interactions that lead to approval. In this way, regulatory feedback can also be included in the information provided to the societies. Sponsors should also provide a preliminary price estimate to the societies. The societies would then modify (or not) the table of therapeutic recommendations in clinical guidelines for physicians. The societies would, of course, be free to provide additional details in guidelines that might expand on the table or even limit the use of the new drug based on their view of cost, side effects, toxicity and benefits compared to products already available. Of key importance would be to place the new product in the context of older therapies. (I have colistin and polymyxin firmly in my sights here). The sponsors would not pay the societies for this work. But, of course, sponsors would be free to disseminate any modified guidelines resulting from the societies’ work.
The societies, especially the ID pharmacists, should also consider making recommendations regarding off-label use. These should be based on clinical (if any), microbiological and pharmacodynamic and pharmacokinetic data.
An example would be guidelines including a treatment recommendation table. This guideline should have been promulgated within a year after the approval of ceftazidime-avibactam. It might have discouraged the use of colistin or polymyxin for the treatment of resistant Gram-negative infections and encouraged the use of the newer, albeit more expensive, agent for cUTI, cIAI, and nosocomial pneumonia when resistant pathogens susceptible to ceftazidime-avibactam were suspected or documented.
I think that we can all agree that timely modification of guidelines from experts would go a long way towards modifying the treatment paradigms utilized by physicians. If you have any doubt about this, look at the effect of a recent guideline change on the use of fidamoxcin in the treatment of C. difficile. Its shameful that it took eight years to get to this guideline change. Our expert societies simply have to do a better job of keeping up with the changing therapeutic environment as resistance evolves. Such action would, in a modest way, provide an additional pull incentive for sponsors and investors.
Tuesday, July 16, 2019
You noted that a subscription payment system such as the one recently proposed by the UK for purchases of low-volume use antibiotics would not work. I noted that these are used by an increasing number of states in the US to purchase drugs of Hepatitis C and HIV treatment of prisoners and Medicaid recipients. The idea here is to get more treatments at a lower price per treatment via the subscription contract. Pharma at least does not lose money because they sell more drug (at a lower price per treatment) and the users win because they can treat more patients than they might otherwise treat with these expensive therapies. Why do you think this will not work?
HIV and HCV drugs are extremely profitable for companies. Antibiotics are not. The purpose of the subscription model for profitable drugs is to save money, period. That is why Medicaid programs are interested in it for HIV and HCV drugs (note that this is not Medicare, but Medicaid). For Medicaid, the alternative is rationing. And rationing drugs that are used to prevent the spread of contagious diseases is not deemed optimal from a public health perception. The purpose of subscription models in these cases is never to increase revenue to the companies—they’re already making killing on these drugs. The purpose is to contain costs.
For antibiotics, the situation is vastly different. Companies want a subscription model to increase revenue for antibiotics. Government views a subscription model as a means to control costs. Those two goals are contradictory and I see no way to reconcile them. For antibiotics, I see no path forward there. Also, the UK is far better positioned to operationalize a subscription model since the government is the healthcare payor and operator. Not so in the US.
Finally, an advantage of the subscription model for HIV in particular (and arguably for HCV is well) is to enhance uptake of the drugs for public health purposes by psychologically delinking usage from the cost. We want all HIV patients on medications so they stop spreading the virus to others—it’s a public health need. That’s why HIV drugs are historically carved out of managed care MediCal capitated costs in California, for example. The situation for antibiotics is very different. We do not want to encourage rampant use of antibiotics, we want to control their use. Psychologically delinking cost from use has the potential to encourage inappropriate antibiotic use that is contradictory to good antibiotic stewardship practices.
Those advocating for a subscription model for antibiotics may not understand well the practice of medicine in this case.
Can you explain how a non-profit antibiotic discovery and development organization would work – all the way to commercialization? I assume that there will be no large pharma or even small pharma partners for eventual products. Therefore, would the non-profit, to be evergreen, have to earn enough money from sales to support itself?
What we described in the NEJM article was an idea where non profit institutes would be set up with a mission to discover and develop new antibiotics. For example, a group of perhaps 15-20 FTEs with expertise in antibiotic discovery, microbiology, med-chem, and translational and clinical development research would be full time within the institute. Those FTEs would be funded off of a sizable endowment, which generates sufficient interest to sustain the FTEs without eating into the principle.
DS - You need at least 30 FTEs here including biologists, chemists and management.
Brad - I defer to you, with the exception of pointing out that much work can be contracted out to boutique firms with expertise in specific areas.
The research work would be funded principally by existing push incentives, i.e., grants and contracts from government, non-profit, and foundational funding agencies and organizations. With existing pull incentives and funding opportunities, it is possible to go from discovery to completion of phase III clinical trials without spending any internal R&D dollars, all funded by external funding organizations. Future revenue generated from licensing deals or sales would be fed back into the endowment to grow it, and could also be used to support the R&D.
Yes, the idea is that the organization could take a drug from discovery to marketing without requiring a for-profit partner. But, they certainly could partner with for-profit companies if there were companies interested in specific products.
I actually am interested in a very carefully targeted transferrable market exclusivity extension to be used in a limited way (capped in dollar value or time) to encourage late stage deals with for profit companies. More important than the for profit participation to me is the potential for redirecting some of the revenues generated by the incentive to found or sustain non profits. To me, this is a potential win-win.
DS - If you re willing to have a transferable exclusivity voucher, do we still need non-profits?
Brad -Yes, for two reasons. The targeted exclusivity voucher will encourage late stage acquisitions not up front discovery. Someone needs to do the discovery work, and I trust non profits more than for profits based on recent track record. Second, the transferrable extension would undoubtedly be time limited. It is unlikely to be sustainable politically past a few uses, and that is assuming we can get it done in the first place
Finally, I should point out that GARD-P is an existing non profit that is taking a slightly different approach than the one I’ve laid out. From what I’ve been told by Dr. Piddock from GARD-P, they are initiating a discovery process by leveraging partners who can do discovery screens, as well as running more mature clinical development programs in partnership with for profit companies. That model make sense too. There doesn’t have to be only 1 way for non profits to work. The more non profits working, with the more diverse models, perhaps the better off things are.
We discussed the need, at the time of launch, for educational efforts (some call this marketing) to teach clinicians about the utility, specificity and toxicities of recently approved antibiotics. These efforts cost money. I have estimates of $8-30 million for this effort for a hospital product depending on its label. Community products would be more costly to market. How will your non-profit deal with this?
I think we need a totally different way to license and market antibiotics. I frankly don’t think antibiotics should be marketed really, in a traditional sense. We need a requirement, baked into regulation or law, that newly approved antibiotics can onlybe prescribed by physicians or pharmacists who have undergone specialized training in Infectious Diseases and antimicrobial stewardship. Only oncologists can prescribe chemotherapy. Only rheumatologists and GI docs prescribe the latest “blah-blah-blamumab” for their target diseases. And those drugs are not shared societal trusts. Only experts in ID should be entrusted with the power of antibiotics to sustain their power to cure for as long as possible, and avoid wasting them.
Specialty societies should be highly motivated to assist with this. I have been hugely disappointed with IDSA, for example, which hasn’t done anything to actually promote the value of ID specialists. If those who have completed ID fellowships (for MDs) or residencies (for PharmDs) are the only ones who can prescribe these drugs, it will help drive up the societal value of these specialists in way that far exceeds whatever has been attempted to date. One would then expect that the specialty societies would take the lead in working with entities bringing a new antibiotic to market to develop and disseminate educational materials around the prescription of these drugs. Let’s not leave it to corporate marketing. Let’s have clinical and scientific experts develop those materials and share them via societal networks among those specialized in this field.
DS – Even ID docs need education. In fact, unless things have drastically changed, ID specialists get very little clinical microbiology training these days and may not be well equipped to understand the microbiology and PK/PD that support antibiotic dosing and decision making without additional guidance. I agree that the ID Society could do a much better job of helping here.
One concern is about access. Small hospitals and rural hospitals may not have ID specialists, whether MD or pharmacists. But, with the availability of tele-medicine, and the Joint Commission/CMS requirement around having a stewardship program, there is no reason they can’t all access such specialists. If only such specialists can prescribe these drugs, they will absolutely find a way to get access to those specialists.
This is a win-win-win-win proposition. The public has specially trained experts in charge of prescribing the most power life-saving drugs we have, who are far better positioned to protect and save this shared societal trust than other prescribers would be—a win for patients and public health. The specialists would find their reimbursement and value rise, improving recruitability of new physicians and PharmDs into the field in the long run—a win for the physicians/PharmDs. The specialty societies would find their importance and necessity greatly enhanced, and will have created a brand new source of revenue, which is the creation and distribution of educational materials around use of new antibiotics—a win for them. Non-profits would win because they would find the cost of launching a new drug hugely less—a win for them.
You seem to think that a “pull” incentive that provides a large reward to PhRMA will not occur because it is politically unpalatable. I agree – that is my perception as well - at least for now. But what is your model, how long will it take to implement and provide products and what can we do between now and then?
Let’s be clear here. I am in favor of one, very carefully targeted, and limited pull incentive (as described above), both to encourage late stage for profit participation, and also a source of revenue to feed back into non profits to ensure their sustainability.
DS – see previous response re: vouchers above.
As far as how long will it take for non profits to participate, we have a pipeline with 42 drugs in it currently, at multiple stages of development. If we had a rich donor or government seed a non profit, I see no reason why it could not be up and running within 1 year, and could take on discovery work but also could begin participating in developing molecules that are already in development.
As mentioned, GARD-P is an existing non profit that is already doing this work. So, I don’t think setting up non profits would delay things much. They could take over existing programs such that they don’t start truly from scratch.
DS – I have actually carried out scenarios on this. It will take 2-3 years to get an organization established on paper, obtain funding, and then get everyone hired and installed in a laboratory. It may take more to actually in-license a product since decent in-licensing candidates are very rare on the ground these days. And it will take even more time to discover, develop and introduce a new product to the market. We’re looking at a 10-20 year timeline here.
recent paper (requires subscription or registration) from the New England Journal on the establishment of non-profit entities to carry out the discovery and development of new antibiotics. We recently had a far-ranging discussion on his vision of the future that I wanted to share. To do so, Brad agreed to provide written answers to a set of questions derived from our conversation. This will be a 2-part blog.
To start, you take issue with many “alarmists,” myself included, who think that resistance is approaching a state of crisis. Recent particular examples include nice NY Times articles by Matt Richtel on antibiotics for UTI and on the emergence of Candida auris as a highly resistant fungal pathogen. (I’ll provide links). What is your view of the resistance “crisis?”
We need to be honest with ourselves and with the public. The situation today is hugely better than it was 15 years ago, when you and Bob Moellering first alerted people to the crisis. At that time, MRSA was exploding into communities and we had few new MRSA drugs available, and had not yet learned to reuse old drugs to treat S. aureus. In addition, we had no new Gram negative drugs—Pseudomonas, CRE, and Acinetobacter were huge concerns, with rising incidences and rising rates of resistance. We hadn’t had a new TB drug in half a century. In 2004, only 6 new antibiotics were in the pipeline, and in the ensuing decade, FDA approvals fell by >90% from peak.
Things are very, very different now. Today, 42 antibiotics are in the pipeline, and FDA approvals have tripled in the last 7 years. Today, MRSA is a non-issue for new drug development. We have at least 30 drugs on the market to treat MRSA. Today, CRE is no longer an issue with respect to inadequate antibiotics, with 4 drugs approved to treat CRE, and numerous more in development including in late stages. Today, Pseudomonas resistance rates have stabilized, and have had a new pseudomonal agent (ceftolozane) FDA approved, and others in late development. Today, Acinetobacter rates have stabilized, and we have several Acinetobacter drugs in late development. Today we have had 1 new TB drug approved, and several others in advanced development. Our situation with antibiotic availability to combat resistance is better today than it has been in 20 years.
That’s not to say that we don’t still have problems. We certainly do need new oral agents to treat Gram negative bacteria. But those patients have IV options. And many of us have already adapted to using oral Fosfomycin to temporize the problem.
Candida aurisis almost always echinocandin susceptible and the case numbers are small.
My view is that we have a window of opportunity here to thoughtfully redesign how we discover and develop new antibiotics in a much more sustainable way. We should stop pushing a bunch of me-too drugs to market, and a bunch of redundant drugs to market (4 CRE drugs approved, may more still in development). Pounding the table to demand that taxpayer dollars be pumped into pharma profits is not the solution. It is neither necessary, nor acceptable to the public, and it frankly ignores much higher priority needs that the public has with respect to spending its money to support healthy people, families, and communities—such as housing, combatting homelessness and substance abuse, mental illness, and other means of counter-acting social determinants of ill health.
Why do you think that new pull incentives to promote increased profit for companies is not a good solution to the problem? Why do you believe non-profits are a better option?
Those who are insisting that the public subsidize profits for pharma are deeply out of touch with what most of the public, and even most physicians in practice, feel and think. The US is running trillion dollar deficits, and is already $22 trillion in debt. Our debt to GDP ratio is the greatest it has been since World War II—no joke, see graph below.
This debt is driven by several factors, but by far the biggest expenditure is healthcare, and that expenditure is projected to markedly increase in the coming 30 years (see 2ndgraph below). Our healthcare costs now constitute a national security crisis: they are eating so much of our federal budget that there threatens to be insufficient funds for infrastructure, safety net, and military, as well as other discretionary projects. To pretend that we can just continue pouring money into pharma companies to help them make more profit in an era of huge deficits and debt is irresponsible.
Furthermore, the public has an exceedingly negative view of the pharmaceutical industry, and overwhelmingly believes it is not only too profitable already, but that it has too much influence in politics (numerous large surveys have demonstrated this in the last several years). To think that the public will stand for public money being pumped into profits for pharma is deeply out of touch with what Americans say is important to them, what they want, etc. Those advocating for this approach are operating in an echo chamber—they are reinforcing their own message by talking only to the small group of people who agree with them, and tuning out the thoughts and feelings of those who don’t.
Finally, I would say, those working in the for-profit sector are supposed to be capitalists. What kind of capitalism is it where one says, we believe in the profit motive, but when things get hard, we expect the taxpayers to cough up public money to pour into profits? I’m actually proposing that we listen to the capital markets. The capital markets have spoken here. They have said, we won’t make profits in this space.
We have existing push incentives (which should be much better targeted towards unmet need) that enable companies to do their R&D with little cost or risk. Should we also pay company profits on the backend? If the public is fronting the R&D costs on the front end, and paying the profit on the back end, what is the company needed for?
To me, the non-profit motive is the natural response to what the capital markets are telling us. The public will front the R&D cost, and reduce the risk. But don’t ask it to pay profits on the back end too.
DS – but this is exactly what you will propose in the next blog.
I don’t view it that way. I talk about a limited, focused market exclusivity extension, one of the primary points of which is to raise funds for non profits. To me, this is a tool to get the non-profits going more than it is a tool to retain for profits in the space.