O'Neill's Latest - Antibiotics in Neverland

The latest installment of Jim O’Neill’s report for the UK government on securing a future for antibiotics has just appeared.  Like the other chapters of the report, there is much to like here.  But when it comes down to the key next step – money – his shot is wild.

Entitled, “Securing New Drugs for Future Generations,” it suggests three interventions to get us across the goal.  (1) Create a more predictable market for new antibiotics. (2) Provide focused funding for early research into new antibiotics. (3) Create centralized platforms for the efficient clinical development of antibiotics targeting resistant pathogens.  There is nothing new in any of these proposals – but its good to get confirmation from a task force with the stature of this one. In fact, we are already doing (2) and (3) – jut not enough and not very well.  Partly, this is a problem of training, something O’Neill does not discuss. What we are not doing at all is (1).

O’Neill suggests a global buyer provide somewhere in the range of $1-3 billion as an upfront payment for an appropriate new antibiotic.  The global buyer, by such a purchase, would immediately provide a significant return on investment to the company that developed the antibiotic.  The buyer would then distribute the drug according to demand and need and would monitor usage. Such a payment would immediately de-link marketing from sales or use of the antibiotic since the buyer would be the distributor. The obvious problem with this is to try and designate such a global buyer who could actually coordinate distribution and use on a global scale. The only entities I know who come close to this are pharmaceutical companies and they are not so good on the stewardship side of things. Governments are notoriously useless here to say nothing of WHO or the UN or the EU.

A hybrid approach includes an upfront payment that reimburses costs of development including prior failures – still in the $1-3 billion range – but that allows the company to sell and make its profit in that way.  But here, the price would remain low since the company no longer has to make up its research investment.  The de-linkage and stewardship components would not be the same, but would be much easier to manage since sales pressures would be lower.

O’Neill, for the most part, dismisses high prices as a way forward.  My own belief is that his other proposals are simply not implementable on this planet today.  Therefore, a model including high prices in some markets (US, I’m talking about you!) is inevitable.  Further, a global buyer is off the table.  Funds from governments where individual markets then work out their own distribution systems - probably involving the pharmaceutical company - is a much more realistic way forward. 

The report also includes a proposal on funding early research and here O’Neill takes a page from the Innovative Medicines Initiative in Europe and suggests that the pharmaceutical industry fund these efforts. Well . . . .I think maybe too much beverage from the northern reaches of the UK was available when the committee was thinking about this one.  There is a dearth of funding for research largely because the pharmaceutical industry has abandoned the area.  Why we think those companies who have abandoned antibiotics will now fund research in the area is beyond me.  Of course, if large, upfront payments become a reality, this might happen – but not before.

The final portion of the report is dedicated to centralizing the clinical development of antibiotics using centers designed to provide patients to participate in such trials.  There is also the requirement that regulatory requirements for trials be harmonized.  This, currently, is mostly the case for the US and EU – even though trial endpoints differ in the two jurisdictions.  But this issue is relatively easily handled through the use of two different statistical analysis plans, one for the EU and one for the US.  Its outside of these jurisdictions where things are getting stickier these days and O’Neill’s report does not go into those issues.

So, while I think that the report is a good one in terms of the monetary figures proposed, in terms of practical implementation, we seem to still be in Neverland. Sorry, Jim, but the UK is actually going to have to put up real money, as will its European (for now) colleagues.  I think the US will remain the land of high prices.

Jim O'Neill for the UK and Antibiotics!

The Prime Minister of the United Kingdom, David Cameron established a commission chaired by Jim O’Neill, an accomplished economist, to lead a review of the antibiotic-resistance crisis and to make recommendations on what to do about it by mid-2016. The commission, with help and sponsorship from the Wellcome Trust and the British Government has already published three reports.  The first was a rather exaggerated view (my opinion) of the world if resistance had become so widespread that antibiotics no longer worked.  The economic consequences of such a catastrophe were estimated in the$100 trillion range globally. Of course, this provides a wide range for the economics of proposed solutions to come later . . .

The second report – the most interesting in my view – is a survey of folks carrying out research and development of antibiotics. The commission asked small, medium sized and large pharma companies and non-profits a number of questions. Barriers to investment in antibiotic R&D were those described in my book – Antibiotics the Perfect Storm.  The most important was one of return on investment where 30% of products from the 1990s failed to provide such. Next was the scientific difficulty of discovering new products. Third was the regulatory risk where the FDA was the most often cited problem but 55% cited Europe as well.  The respondents were encouraged by recent actions at these regulatory agencies but most felt they could go farther.

The most likely drivers of research according to the respondents are early grant funding (e.g. IMI and BARDA), higher prices and better hospital reimbursement.  I was surprised to see longer patent life at number 4 but I attribute this to the smaller companies and non-profits in the survey.  I was also surprised to see that patent vouchers was not a popular solution anymore.  This must be because pharma companies are rapidly running out of the double digit billion dollar blockbusters they had when patent vouchers swere first proposed back in the early 2000s. (A patent voucher would allow you to get extra years of exclusivity on a high earning product in return for introducing an antibiotic active against resistant pathogens to the market).

 

The first report to deal with proposed solutions is number three on O’Neill’s list of released reports. To me, one of the most important observations contained in this report is the paltry funding of antimicrobial resistance work by the NIH in the US.  Figures from the UK’s MCR are not presented (hmmmmm). One of the suggestions is a global innovation fund to supplement the obviously inadequate availability of funds from existing sources (NIH, MCR, IMI, BARDA, etc.).

The other issue O’Neill notes is related to attracting researchers into the field of antibioics and resistance research.  He suggests the establishment of centers (centres) of excellence to carry out this work.  In my view, this will only be practical if it includes training in antibiotic discovery and development with everything from preclinical to manufacturing to formulations to clinical development.  This is a tall order and it better happen soon because we are losing trained experts by the second.

All in all, the O’Neill effort will supplement  and in some ways surpass the US PCAST report in its detail and recommendations.  But, given Prime Minister Cameron's drive to austerity, we may end up with the same admonition at the end of it all.  Show me the money!!

Antibiotics - the Virtuous Cycle

I just returned from two days of DRIVE AB meetings in Amsterdam.  I am so excited that I couldn’t wait to get something in writing for the blog.

Two weeks ago, the O’Neill Commission (officially the Antimicrobial Resistance Review) released its final report.  If you haven’t read it – do it now! The report makes a number of very specific, key recommendations all of which make common sense.  They all fall under two general rubrics -

1.     Reduce the demand for antibiotics.

2.     Increase the supply of new antimicrobials active against resistant microorganisms.

These two are clearly conflicting – the paradox of the antibiotic market in a nutshell.  A new antibiotic hits the market and physicians don’t want to use it for fear of selecting for resistance too quickly. But this is what we must somehow achieve.

DRIVE AB is an effort to combat antibiotic resistance funded by the European Commission, the Innovative Medicines Initiative and EFPIA, the European version of PHRMA in the US.  DRIVE AB is founded on three principles – Access, Sustainability and Innovation. You can immediately see the similarity between the DRIVE AB goals and the O’Neill Commission report.  I look at DRIVE AB as the group that will provide more specific recommendations to various national and supranational authorities on how to implement the recommendations of the O’Neill Commission.

To me, the most exciting aspect of the DRIVE AB effort revolves around providing post-market incentives to pull companies into antibiotic R&D –a key recommendation of the O’Neill Commission.  Some have termed this de-linking with the idea that these incentive payments should alleviate the marketing pressure on the company to increase sales volumes and therefore to provoke a more rapid emergence of resistance. A significant upfront payment would address this need and resolve the paradox.  

Again – according to the O’Neill Commission - The reward would be given only based on societal priorities shaped by key medical needs. The CDC list of key resistance threats is a good starting point for these priorities. Payments should be free from political risk. The size of the reward should be linked to the value of the product to society (or to a given country). The payment would come soon after regulatory approval, but need not come all at once. Control for manufacturing, distribution, post-market research all should remain in the hands of the developer.

The DRIVE AB group discussed several models for such post-market rewards of which I would like to highlight just two. The first is called an insurance type reward. (See Rex & Outterson) John Rex’s favourite way to explain this is to compare the payment required to our need for fire extinguishers and for firemen. We buy the extinguishers and place them strategically in our homes and businesses and we pay the salaries of our firemen and firewomen even though, happily, most of us never actually have a fire. Paying for an antibiotic that we don’t actually need today, but that we might desperately need tomorrow is similar – its insurance. In the example we discussed, a collar and cap model is used for insurance payments. A government of payer provides a developer with an annual payment up to some specific volume of courses of therapy. If this volume is exceeded (the collar), the payer must provide additional payments on a per course basis.  This volume though, is capped.  If the cap volume is exceeded, the payer would pay some discounted price for additional courses of therapy. From my understanding, some variation of this is likely to occur in a couple of EU countries as soon as this fall for antibiotics recently approved in Europe.

The other model we discussed is the market entry model. In this model, the developer is paid one or more payments upfront. As in the insurance license model, the developer has a number of obligations by contract including those relating to good stewardship.

The model I personally prefer is similar to the insurance license model but where the upfront payment is on the order of say $1B given over the first 3-4 years post-approval. But where the developer is still allowed to sell units at some capped price.  This price would be enough to encourage good stewardship at the level of the user and the company would still have to abide by their good stewardship contract with the payer. I envision that the cap would increase after the first 3-4 years such that by the end of the exclusivity period, all sales would be based on whatever price the developer was charging.  This provides several advantages.  It keeps the developer’s skin in the game – its motivating.  It provides for a potential upside beyond the initial payment – also very motivating. And it would encourage generic manufacturers to enter the market after the period of exclusivity has expired.  The key would be to make sure that principles of stewardship and responsible end user education are maintained while actual selling the product.

The reality is that for any innovative product education will be required.  That would probably occur via some sort of medical liaison group from the developer, but would not involve “sales” representatives.

Our discussion made clear that no one model would work for any one product for all regions and no one model would fit all products for any region.  We need a choice of different post-market incentives such that various regions can choose the one that best suits their needs.

One exciting result of these incentives is the virtuous cycle. Large pharmaceutical companies like Pfizer and J&J might be motivated enough to get back into antibiotic R&D. This means that there would be more private capital to invest in academic and biotech R&D – completing a virtuous cycle leading to an even more robust antibiotic pipeline for the future.

As John Rex noted several times during the meeting – such a meeting could not have occurred even one or two years ago.  Yet here we are – at the beginning of what could be a new world.

The Threat to FDA

As many of you know, I have had my “disagreements” with the FDA over the years.  But I have never questioned the fact that without the FDA, we would all be in a world of trouble. Just look at what’s happening with supplements and you’ll begin to understand what I’m talking about.

The very beginnings of the FDA were in the patent office in 1848. So-called “patented medicines” were being sold throughout the US as cures for whatever. A number of high-profile poisonings from tainted products had occurred including several affecting soldiers in the army. The patent office was given the task of identifying potential poisons among products being sold to the armed forces. In 1862, this effort was transferred to the newly created department of agriculture.  There, responsibility for the safety of food was also added. Chemical additives to preserve food included a number of poisons as well. These inspections fell to the department of chemistry within the department of agriculture.  By the end of the 19^th century, over half of all newspaper advertisements were for nostrums claiming to cure everything from cancer to rheumatism. One chemist, M.J. Bailey, reported,"More than one half of the most important chemical and medicinal preparations … come to us so much adulterated, or otherwise deteriorated, as to render them not only worthless as a medicine, but often dangerous."  Europe started embargoes against American drugs and food. 

In 1905 Sinclair’s The Jungle was published.  The conditions described in slaughterhouses were so disgusting that Teddy Roosevelt decided to send inspectors to Chicago.  They found what Sinclair had described. The first food and drugs act was passed in 1906.

After passage of the law, the maker of Cuforhedake Brane-fude – claiming that this product provded certain and harmless relief and contained no poisons whatsoever – was charged under the new law for selling a product with acetanilide – a known poison that was responsible for at least 22 deaths. The product had brought in $2 million. The drugmaker was fined $700, changed the label and went on making the product for years.

The most famous case occurred in the 1930s when one of the new sulfa antibiotics was sold tainted with polyethylene glycol. Over 100 people died, many of them children.  But the company had broken no law. The label was not “misleading.” This, more than anything else, led to the passage of the Food Drug and Cosmetics Act of 1938. Proof of drug safety would be required before a drug could be marketed. But the 1938 law said that companies had to submit data showing safety and the FDA had 90 days to object before the drug would be marketed.

Then came thalidomide and thalidomide babies.  That led to passage of the Kefauver-Harris Amendment of 1962 – signed by JFK. This law required the demonstration of both safety and efficacy setting basic standards for what evidence could be considered. While the FDA has progressed since 1962, this law remains the basis of everything they do.

Today, some want to turn the clock back to 1938.  In particular, Jim O’Neill (no relation to the Jim O’Neill who led the UK’s Antimicrobial Resistance task force) wants to have drugs approved once they have shown to be “safe” and then have some sort of rolling approval where there would be an obligation to show efficacy. Not only would this be a terrible step back into a sad and destructive history, but it is completely irrational.  The concept of safety can only be understood in the context of benefit.  If the benefit outweighs the risk, a product can be considered safe even if there are some potential liabilities.  This has been our entire approach to the treatment of cancer and other serious diseases for decades. O’Neill is apparently under consideration for Commissioner of the FDA.  Are you kidding?  He is not a physician nor is he a scientist.  He is a Managing Director at Peter Thiel’s Mithril Capital Management.

Although to achieve what O’Neill would like, laws would have to be changed and probably the majority of people at the FDA would simply walk out if this were to occur. So, it seems unlikely that he would succeed in this particular quest.  But someone like him could do a great deal of damage.  Why would we ever want to go through the early 1900s of drug regulation again? Please – let’s not go there.