Friday, March 30, 2018

J&J, Antibiotic Resistance and Pull Incentives

 Before getting into the topic of today’s blog, I wanted to wish everyone a happy Passover and Easter. I hope that our thoughts of renewal this weekend will extend to the impending antibiotic resistance crisis.

Today I spoke with Dr. Adrian Thomas, an Australian physician, who is now the Vice President of Global Public Health for Johnson & Johnson.  As you may know, J&J has performed yeoman work in the area of tuberculosis and, more recently, Ebola. The company has a major investment in medical devices especially around surgery.  They recognize the implications of antimicrobial resistance for their device business.  Surgical implantation of devices in orthopedics, both electively and emergently, and, in the future, from the use of robotics in surgery are areas clearly at risk from emerging antimicrobial resistance.

As I did during my interview with Pfizer, I tried to get Dr. Thomas to provide me with a specific incentive or even a specific monetary amount as to what J&J would expect from a pull incentive in order to invest either in antibiotic discovery research or in the development of a late stage asset.  The reply I received was not what I expected.  Dr. Thomas pointed out that J&J is a science-driven company.  Therefore, that any opportunity they might explore would depend on whether they had the scientific expertise to maximize the opportunity. (I wonder if J&J still has the internal scientific expertise to evaluate antibiotic assets).  Only when that criterion was satisfied would commercial considerations come into the picture. He also noted that the requirement for the size of a pull incentive might be quite different depending on the specific product and its spectrum of activity. The most difficult of the products might be those where the smallest numbers of patients would be treated.  Therefore, one would be developing a product that would, essentially, be used only very sparingly.

I also asked what kind of pull incentive would be preferred by J&J.  Once again, he responded saying that it would depend on the specific product and that this is a complicated topic.  He pointed out that different pull incentives might be required in different markets globally. Dr. Thomas provided an example of a priority review voucher that they received upon approval of their TB drug in 2012.  They used this voucher to accelerate approval of a drug to treat psoriasis – a particularly competitive area. For them, this was an important pull incentive. This pull incentive was then ploughed back into public health related research according to Dr. Thomas.

In discussing pull incentives generally, Dr. Thomas pointed out the importance that J&J would place on innovation in the award of such incentives. He also pointed out than any such incentive, according to J&J, should be accompanied by appropriate guardrails.  But when I asked what they would look like, he demurred suggesting again that such questions could only be answered on a case-by-case basis. There is no specific answer here from J&J, he said. The other need he emphasizes is that companies need to be able to recoup premium pricing on drugs that are rarely used.  (Recent launches have not been encouraging in this regard - my thought here).

Dr. Thomas also expressed some skepticism around the regulatory process that might be adapted for approval of rarely used antimicrobials targeting resistant pathogens. He noted that the pivotal trials for their TB drug took 3-5 years to complete.

Finally, Dr. Thomas noted the concern that I think all of us share.  In the absence of defined pathways not only for approval, but more importantly, to success in the marketplace, investors are hesitating.  My recent conversations with key investors in this space confirm that this is a real concern. Dr. Thomas noted that there is a dearth of potential partners for drugs acting against resistant pathogens (partners that would interest J&J, I presume he means).  


In summary, like other large pharmaceutical companies such as Pfizer, J&J believes that pull incentives as well as premium pricing are a necessary part of fixing the broken market for antibiotics targeting resistant pathogens.  Dr. Thomas would not provide details on preferred pull incentives or the amount of compensation that would be required.  He maintains that it all starts with the science and with J&J’s internal expertise and that commercial needs would have to follow on a case-by-case basis. That said, he noted that J&J was pleased with the priority review voucher they received for their TB drug.

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