Pathogen-Specific Antibiotics - Business Models

I just returned from giving a talk to microbiologists on the issues surrounding the clinical development of antibiotics with activity against specific pathogens – that is – the opposite of so-called broad-spectrum drugs. I used as an example an antibiotic that targets Pseudomonas aeruginosa, Polyphor’s POL 7080.  

Microbiologists play an important role in constraining the use of antibiotics in both the hospital and community settings.  They are interested in the development of antibiotics that are more specific and therefore less likely to engender antibiotic resistance as collateral damage.  What I mean is – when treating someone for a Pseudomonas infection with a carbapenem antibiotic, you may select for resistance in Klebsiella since the carbapenem kills indiscriminately.  At least with a drug that targets only Pseudomonas, you only have to worry about selecting resistance in Pseudomonas.

I pointed out that, at least today, from a regulatory point of view, we still don’t know how to run a feasible trial that will result in marketing approval for such a drug. While I am confident that this problem will ultimately get solved, I am not so sure about the business model for such a drug.

The problem for this sort of antibiotic is that it will be used, at best, only sparingly. From the stewardship point of view – this is the ideal situation. But, if the company marketing the product has to depend on sales volume, it will be even more difficult to provide a return on investment for this sort of antibiotic compared to a broad-spectrum agent that can more easily be used on an empiric basis. Since companies are not in the business of providing for the public health in some sort of charitable way, why would they spend their limited resources on developing this sort of product? We, as a society, need to provide a business model that will work.

In Europe, where most countries already have a form of socialized medicine, the models being discussed all include some sort of market entry reward. In all these models, when a company gets approval to market an antibiotic that meets pre-determined criteria, they receive a payment of some sort.  How this payment is distributed is the basis of the debate on which model to use. Regardless of the model, the payment would be such that it would provide a return on investment for the company. While such a model was about to be put into use, I understand that everything is now on hold awaiting a better understanding of what Brexit will mean for payers in Europe. 

Here in the US, the model that seems to be preferred by people discussing this issue is the so-called patent voucher. In this system, a company that successfully brings a needed antibiotic to market would be rewarded with an additional period of exclusivity on the product of its choice from its portfolio of marketed products.  If, for example, the company were Gilead, it might choose extra time of exclusivity for one of its multi-billion dollar Hepatitis C drugs. This would guarantee a return on investment for the new antibiotic even if it were only used for a small number of patients every year.  The last time this model was discussed by the lobbying group from the Infectious Diseases Society back in 2004-5, the model was dead on arrival in congress partly because of the blowback from both consumers and the generics industry.  How this model will fare under a Trump administration is impossible to predict – but past experience on the Hill is not encouraging.

Some companies, like Merck, have already staked out a position here. Merck seems to want to be able to charge an appropriately high price and have that price be covered by various payers globally.  Merck and other large pharmaceutical companies might or might not be encouraged by the experience of Allergan and ceftazidime-avibactam in the US. Ceftazidime-avibactam or Avycaz was approved in the US in 2015 based on phase II data.  This antibiotic is the only alternative to the toxic and poorly efficacious colistin/polymyxin for the treatment of certain highly resistant Gram-negative infections. These infections remain, happily, relatively uncommon in the US. The label it received from the FDA restricted it to use only when other alternatives were not thought to be available.  The price was set at $12,000 per course of therapy – but payers actually provided something like $8500. This makes it the most expensive antibiotic ever marketed globally. Analysts predicted $300 million peak annual sales for the drug.  The first half of 2016 Aycaz had only $22 million in sales with the second quarter coming in at $13 million. Based on second quarter data and accounting for growth, this year could have seen $60 million.  Two events have altered this landscape.  First, the label for Avycaz has changed and was expanded now that they have an approved sNDA based on their phase III data. How this will affect the price is not yet known.  Secondly, Allergan has experienced manufacturing problems from the GSK supplier that will slow down sales in the latter half of this year.

My own opinion is that we need something beyond price and that Allergan’s experience makes a strong argument for that view. Allergan will now struggle for several years to achieve the analysts’ peak annual sales forecast of $300 million if it ever does so. And this level of sales, albeit it is only in North America, may not be enough for many companies in any case. Other pharmaceutical companies will be watching this closely and they may not be encouraged.  But we need more large companies to join the fight against antimicrobial resistance through the research and development of new antibiotics active against resistant pathogens. The experience of Allergan coupled with continued dithering on the Hill does not bode well for our goal of bringing more large companies into the field.

FDA Needs a Few Good People - But Can't Hire Them

A recent article in the Washington Post caught my eye.  The FDA apparently has over 700 vacancies in its drug evaluation group. This lack of resource is holding up drug reviews. According to the piece, Dr. Janet Woodcock complains that qualified candidates would much rather work in industry because the salaries are so much higher.  But she also goes on to explain the draconian hiring process at the FDA where all potential conflicts of interest must be reviewed and rectified before the person is hired.  And this says nothing about the lengthy federal candidate review process.

I agree with Josh Sharfstein who says the problem is not just the salary.  It’s the rest of the process.  To be hired, one has to divest all stocks or other investments in companies that might pose a conflict of interest – as in virtually all pharmaceutical companies. This probably excludes most folks with the kind of experience the FDA actually needs in its reviewers.  That is, people who have worked in industry designing and carrying out clinical trials designed to get drugs approved by the FDA. Given the devastation that’s been occurring because of pharmaceutical company consolidation, there are lots of experienced folks out there who might be interested in working for the FDA.  But who wants to go through the process, divest all of one’s pharmaceutical company stock and then wait three months for news as to whether one can be hired or not?

What is the FDA doing now?  They use contractors.  I admit that I don’t know what regulations there are for conflict of interest for contractors – but I expect they are not as draconian as those for full time employees.

And then there are folks like me.  I’m retired.  I wanted to work at the FDA on a voluntary basis – expecting that they would pay my expenses – but no salary.  I strongly believe that we need the FDA and we need it to be effective and efficient – something that the antibiotics group has not been until recently. In retrospect, the particular role I wanted to play is probably superfluous at this point since the antibiotics group is now functioning much better than it was at the time – albeit more slowly than I would like. But in my discussions with them, they noted that I would have to be a contractor and they would have to pay me. Hmmm . . ..  .As it turned out, they didn’t avail themselves of my services – probably because they thought they had things covered internally at that point (and they seem not to have been wrong).  But I’m not sure that I would have met their conflict of interest criteria either as a contractor or even as a volunteer given my experience in the pharmaceutical industry.

So who do they hire? The most likely candidates would be those coming from academia. They probably have little experience in the areas where the FDA needs expertise – so they get trained while working at FDA. The same problem exists for the FDA advisory boards where there is dearth of industry experience and key recommendations frequently lack the insight that previous industry-based trial experience can provide. It turns out that the academics on the advisory boards are probably just as conflicted as industry folks might be. The young clinical reviewers that might be hired from academia will not be at the same level of experience as those on advisory boards and hence would be free of those conflicts.  But they would also be free of experience.  Is that a good thing?  I’m not convinced that it is.

 So, while I think that increasing salaries for new hires at the FDA is a good thing, it is not nearly enough to crack this problem.  The FDA has to reinvent itself in a way that allows it to take advantage of the experience and gray hair that is now abundantly available in the world outside the federal government. Given the paranoia about conflict of interest, I expect that this won’t happen tomorrow.  But we need to at least start the conversation before this opportunity simply goes away with age and evolution to other interests.

Low Expectations

I don’t know about you, but for me, this is the season of low expectations.  My brother-in-law constantly reminds me to keep my expectations low and my standards high. In this US campaign season, I find that it is increasingly hard to avoid feeling blue by continually lowering those expectations.

A good example is the result of the UN General Assembly.  The opportunity to actually do something concrete about the emerging crisis of antibiotic resistance in the absence of a robust pipeline of new antibiotics was an exciting one. But as often happens when multiple players with competing interests get together to try and accomplish something, we now play a waiting game. Although what to expect at the end of the wait is not really clear.  Recently, Allan Coukell of the Pew Charitable Trust wrote a summary of the UNGA statement. 193 countries signed a political statement that is extremely vague and does not include any commitment for financial resources to spur innovation. 13 pharmaceutical companies signed a separate statement where exploring new ways for the public and private sector to collaborate to spur innovation was a goal. The divide between industry and government seems clear.  The UNGA expects to revisit the issue in two years.

 

What we need now is some way to assure antibiotic developers that they will achieve a return on their investment. There are a number of ways this could be funded.  First, the savings on health care provided by having the means to treat infections will be enormous – it just requires a capital investment in our future.  Second, if more immediate funding is required, we could charge a very small tax on current pharmaceutical sales that would be dedicated to an antibiotic market fund. This tax would be applied to all pharmaceuticals without exception – but would need to be pennies or less on the dollar.

A nagging worry for me is whether, at this point in time, even if we identify a financial mechanism to assure a return on investment, pharmaceutical companies will be interested enough to return to antibiotic research. I have been asking the folks at DRIVE AB to investigate this – but have heard nothing as yet. I recently heard that Merck was skeptical of the market entry rewards that we have been discussing.  They may be more interested in pricing and reimbursement as the preferred market mechanism.  That will likely remain the way forward in the US in any case.

We need to train our antibiotic hunters of the future before we lose all our expertise to the ravages of time and the current lack of funding for antibiotic research.

And we need to continue working on new regulatory pathways for antibiotic development – especially for pathogen-specific products.

We need to raise the prices of key generic antibiotics like penicillin to avoid drug shortages.

Beyond all this, we need to improve our surveillance globally, control the use of antibiotics in agriculture, and improve our stewardship of antibiotic use in humans. But even with these steps, we will have a constant need for new, effective antibiotics and for that we need to correct our current problem of the market failure for antibiotic discovery.

I find that I am unable to lower my expectations sufficiently to avoid this current state of depression around the state of progress in global antibiotic policies that is afflicting me. A sure cure would be the commitment of at least a few national authorities to the market entry rewards that Astra-Zeneca was negotiating before their antibiotics business was sold to Pfizer. But, alas, I fear that all this is now on hold.

Holding our Breath

The crisis of antibiotic resistance and our failure to produce a robust pipeline of new antibiotics to combat the problem is not going away. And we’re not doing what we need to do.  We are all just holding our breaths, sticking our heads in the sand and pretending the problem will go away before we have to go to the hospital and face the crisis in a very personal way.

The CDC just published a report in JAMA looking at antibiotic use in US hospitals. The study only looks at the years 2006-2012. They found that about 55% of all hospitalized patients received at least one dose of an antibiotic during their stay.  If my memory serves, when I was in practice in the 1980s and 90s, 75-80% of patients were treated with antibiotics – so at least things have improved since then.  But the 55% number has been stable during the years of this current study.  But what changed over time was the use of certain antibiotics.   Carbapenems, B-lactam-B-lactamase inhibitor combinations, and tetracyclines (I presume tigecycline) saw increased use by 30-40% during the years of study.  Certain other classes, like the fluoroquinolones for example, saw a decrease in use over the years of study. This suggests that physicians are increasingly worried about resistance and are treating their patients as if resistance was already a problem in their hospitals – and they may well be correct. 

On the bright side, we had a historic first this year with a statement from the UN General Assembly on the threat of antibiotic resistance to global health and the global economy.  But on the downside, the statement contained no serious targets and no funding.

The US just saw its first debate between the major party candidates.  We heard about Miss Universe, taxes, ripoffs and many other important topics but not a single word on antibiotic resistance.  This total disregard has been the story of the US presidential campaign so far.

The US congress just passed a funding bill that included $1 billion for efforts to fight the Zika virus – probably too little too late.  But on the problem of antibiotic resistance, perhaps the greatest emerging health crisis we have ever faced, we got bupkus.

In Europe we look to the United Kingdom for leadership in dealing with the antibiotic resistance crisis. Dame Sally Davies, David Cameron, George Osborne, Jim O'Neill, the Wellcome Trust have all been key leaders in the fight to actually get something done before we end up in an era where simple surgery and modern cancer chemotherapy could be life-threatening because of complicating antibiotic resistant infections. What happened there?  Brexit – that’s what happened. Cameron and Osborne are gone. Dame Sally and the Wellcome are still there – but where?

The most frustrating part of this is that fixing the problem is not rocket science.  Its not like sending humans to Mars. OK – the science of discovering new antibiotics is not easy.  But, as I have stated in many previous blogs (1, 2, 3) and as the O’Neill Commission has repeatedly pointed out, we can do this.  We have already come a long way in fixing our broken regulatory system (mainly a US problem). We need to invest (yes, as in money!!!) in antibiotics to shore up our failing free market system.  We need to invest in training our antibiotic hunters of the future. We need to get smarter in our scientific approaches.

What is missing?  What is holding us back? There is clearly an absence of public awareness of the seriousness of the emerging problem. We may not see a surge in public concern until the crisis is already upon us in full force. Those in positions of public responsibility must act responsibly and with foresight.  If they don’t, our children, our grandchildren and we ourselves will pay a price too terrible to contemplate.