Pull Incentives and AMR - Is Europe up to the Task?

 I have been saying for years that for a pull incentive to actually function as an incentive, it must be large enough to motivate investors and large pharma to get back into antibiotic R&D. This will take a $2 (to $4) billion commitment for each priority drug approved regardless of how this goal is achieved. This could be a market entry reward, a transferable patent exclusivity reward (still my favorite), an antibiotic susceptibility bonus, a subscription payment regardless of use, etc. 

 

Years ago, DRIVE-AB, a European effort looking at potential incentives for antibiotic R&D suggested that countries “pilot” various models.  In fact, several countries are now doing just that.  France has had a DRG carve out for certain hospital antibiotics for years.  Germany just introduced such a carve out last year.  Has this increased the market for antibiotics in either country?  I don’t think so. Sweden is piloting a subscription model – but the money committed is not publicly available.  The UK (no longer part of Europe) is also piloting a subscription model committing up to  £10 million per year for up to 10 years per product.  It is claimed that this will constitute the UK’s fair share of the overall antibiotic market in terms of their commitment to a subscription type pull incentive. Of course – that is only meaningful if many other countries join since the UK accounts for something like 3% of the total market. But what does “pilot” mean exactly.  What is the endpoint?  How will we judge success or failure? Is success defined by the sponsor somehow in terms of market increase? And how would that be defined?  Is success defined by the national authority in terms of value of therapy?  What if the country has very few resistant infections like Sweden?  How will they define “value?” I admit that, at the time, sitting in the DRIVE-AB conference room in the Netherlands, I did not understand this concept – and I still don’t.

The other issue is that each country picks different antibiotics for its incentive. That just dilutes the market and makes no sense. 

In my view, the goal of a pull incentive is to provide a significant return on investment for companies who pursue antibiotic R&D and succeed. This, in turn, will motivate investors to invest in the area. No matter how I look at this problem, it seems like the only way that such a large pull incentive will come to pass is if a region or country takes a leadership position and provides an incentive that will work globally.  Once that occurs, we can work to bring other countries on board.  But until then, I think we are stuck in incentive purgatory. The Table below shows the 2017 (pre-Brexit, pre-Covid) GDPs of Western countries and Europe including the UK, Sweden and Germany. Clearly either Europe as Europe or the US are the best positioned to offer such an incentive just based on the size of their respective economies. 

 

 

GDP by country

 

Country/Region 2017 (Trillion USD) USA                19.5 Europe (pre Brexit) 13.0 UK                          2.6 Sweden                  0.5 Germany                  3.7

 

This brings me to a discussion of the possibility that Europe will take on this task. And every time I think about this, I go back to Flora Lewis’ book, Europe, A Tapestry of Nations. And there is no better example of the contemporary issues facing Europe’s ability to bring together its national authorities than their botched approach to providing covid vaccine for their population.  This problem has been analyzed in detail by Politico Europe and their analysis should be a wake-up call to all in Europe as to the continuing shortcomings of the alliance. According to the article, Europe was late coming to the table.  They even supplanted an alliance of four national authorities who had already begun negotiations for vaccines for their countries to restart negotiations for Europe. This resulted in further delay.  Then they negotiated a price well below what the US, Israel and others were paying – which may have dropped them further down the priority list for vaccine suppliers.  This is to say nothing of their clear preference for Europe-based vaccine companies like Sanofi that ultimately were unable to provide any supply in time. Then there were delays in approvals based on delayed applications to the European regulatory authority by sponsors (a frequent event since the US is a bigger market).  Even though Europe was quicker to approve than the US once having received the submissions, the delay based on delayed submssions was still present. Then there was continued bickering among the diverse national authorities in Europe.  Hungary, for example, recently approved and is administering Russia’s Sputnik and China’s Sinopharm vaccines. 

The recent experience of biotech attempting to market their new antibiotics in Europe is also cause for serious concern.  In at least two cases, the European regulators insisted on post-market commitments that would have been more costly than the total potential market in the region. Neither drug was ultimately marketed in the region. 

All this makes me less than optimistic about Europe’s ability to get a true pull incentive for antibiotic R&D together in any reasonable time frame. So – that brings us back to the US. The United States, in my view, is the only country capable of pulling this off. We have the PASTEUR Act on the table – which I think would work (given clarification around a number of questions). I think it is there where we need to focus our efforts. 

 

 

Covid vaccines compared to AMR

 

I never dreamed this would be possible. Of course, so many things are possible today that I thought were impossible that I’m almost embarrassed to admit it (but I have no pride). Twenty-five years ago I thought that an immunologic approach to cancer would never work because cancer cells are, after all, self. My excuse is that I am neither an immunologist nor an oncologist and many of my oncologist friends agreed with me. But to think that one could go from the SARS-COV-2 viral nucleic acid sequence to a marketed vaccine in less than a year – I’m sorry – but that was science fiction, Star Wars, warp speed. Plus – mRNA instead of a killed virus or protein or conjugate antigen?  mRNA – the epitome of instability? Come on!

 

Beyond the technology though, there was the desire, based on a lethal danger to the population posed by a pandemic virus, to get to this goal of a vaccine that is safe and effective and that can be distributed in record time. To accomplish this required an enormous investment in manufacturing – at risk. This investment came either from government (us taxpayers), from private industry (large and small) or from both.  And, at the end, governments are paying for the final product – although some vaccines are being sold at cost (not for profit). This plan required a strong will, a strength of steel, and an organization and expertise that we have rarely seen anywhere before. It’s almost enough to give one confidence in government again – since without government intervention, this could not have happened.  The plan also should make us stand in awe and gratitude for the extraordinary efforts of the pharmaceutical industry and their scientists and clinicians and their partners and stakeholders without whom this would never have happened. The industry should no longer be viewed as evil incarnate!

 

Compare and contrast. Antibiotic resistant infections have been killing people since the dawn of the antibiotic era. According to the CDC, the use of seat belts saved 13,000 lives in 2009. Compared to the 460,000 Americans killed by covid in this past year, 13,000 seems like a small number.  Does that mean we should forget about wearing seat belts? Again, according to the CDC, antibiotic resistant infections and C. difficile kill 48,000 Americans every year. And most of us think this is a significant underestimate. Should we now relax since this number is almost 10- fold lower than the covid losses to date? Should any sense of urgency to save these lives be somehow lessened because of covid?  Or should we rather look at this lesson from covid and apply it to lethal antibiotic resistant infections? How would we do that?

 

First, although a vaccine approach to the prevention of resistant bacterial infections is a great idea, and one that has worked for a few selected bacterial infections, I don’t think that we are at the same place with this problem as we were for certain viruses and mRNA technology. We will need other approaches focusing on therapy. It takes us 10-20 years to go from an idea to a new antibiotic.  We could shorten that time by doing more at risk as we did for covid. We could also do a better job of delaying the increase in resistance by doing a better job of restricting antibiotic use to cases where it is really necessary both in humans, plants, fish and other animals. But because even appropriate antibiotic use will ultimately lead to resistance, we still must find new approaches to the treatment of resistant infections.  My personal opinion is that this will most likely involve new antibiotics or new inhibitors of resistance (like B-lactamase inhibitors). But right now, our pipeline is in a disastrous state and any companies still working in the space are facing economic oblivion. One risk we must take is the use of financial incentives to make up for the broken marketplace that is driving investors out of the antibacterial space. Compared to the cost of warp speed for covid at $18 billion, the fix for the antibiotic marketplace would probably be more like $2 billion per new product.  If we awarded one or two new products per year, we’re talking $20 billion over five years maximum.  In any case, I don’t think our current pipeline would get us to 10 approved products in five years at least in terms of our key priorities.  So, new antibiotics for resistant infections – a fire sale! Why can’t we see this?

 

Let’s talk about Europe for just a minute.  Will Europe and its disparate national authorities have learned the lesson of pricing for new products from its experience with covid vaccines?  Will they have learned that their regulatory approach leaves something to be desired when it comes to considerations of feasibility in their demands for new data? Will Europe be left behind again as they have been for covid vaccines if (my lips to God’s ear) the US establishes a market incentive for new antibacterial products? 

 

We need to learn from this pandemic and apply these lessons to our approach to fighting antibiotic resistant infections – and we need to do it urgently!

 

 

 

 

AMR - a Holistic Approach

 

A very important report on the state of antibiotic use and resistance globally has just been release by The Center for Disease Dynamics, Economics & Policy (CDDEP).  Before delving into this topic, I want to explain my long absence from my blog.  I have been ill but am rapidly recovering and am now ready to continue thinking and writing about AMR. 

 

 The report focuses on the relationship between antibiotic use and resistance with a tool that provides an index or score for a given country.  A number of countries are included as examples in a digital dashboard. This tool and dashboard will be helpful for national and international agencies to evaluate and develop policies to address problems of resistance.  The report also notes that among some LMICs, there is a clear issue of access such that patients suffer and die from simple lack of antimicrobial therapy or vaccines more than from resistant infections. A webinar by CDDEP with Ramanan Laxminarayan and Dame Sally Davies and others discussing the report is also available. 

 

While I cannot agree more wholeheartedly that a greater understanding of the “you use it, you lose it” law of antimicrobial resistance is important, it is not the whole story.  As implied, even carefully monitored and appropriate use of antibiotics will still select for resistant variants within microbial populations. There are many examples of this from our experience in hospitals with strong antimicrobial stewardship policies, even given the fact that these hospitals exist within a larger global community. What this means is that, even if we alter our policies and focus our antimicrobial use in animals and in humans to only what is needed, we will still face the problem of resistance.  It is likely that under those circumstances resistance will evolve and grow more slowly – but it is still going to be inevitable. 

 

Therefore, in a holistic approach to resistance, we have to anticipate resistance even to our last line antibiotics. This means that our current antibiotics will yield to resistance over time and that we will need new antibiotics (or possibly other approaches) to deal with these resistant infections. And today, we are nowhere near ready for that eventuality given the perilous state of our antimicrobial pipeline. 

 

Our pipeline depends on the ability of sponsors (for profit or not) to discover, develop, manufacture and distribute new, effective drugs for the treatment of resistant infections. While there is more and more support for discovery and early development, and even some new support for late-stage development, without an ability to manufacture and distribute these putative new products globally, the entire endeavor collapses like a house of cards. And that is exactly what has been happening over the last decade. The clear evidence for this is in the bankruptcy of multiple small companies who engaged in the commercialization of new antibiotics active against resistant infections. To compound this, a number of sponsors have been unable to market their new antibiotics in Europe given burdensome and expensive regulatory requirements or inadequate national pricing proposals. Even if, as some argue, that these products deserved their fate, private investment in antibiotics is getting more and more difficult. 

 

Recent economic analyses by John Rex and Kevin Krause at a meeting of the National Academies (see links here) shed some light on the costs of commercialization – and they are considerable. The problem is that we know what we must do to address the problem.  We have to pay! While some countries (e.g. UK) are trying this by an effort to “pay their share” – this is clearly insufficient by itself. Either we need a more global approach, or some country or region must take a leadership position and provide much more than their “share.” I’m looking at you US and EU! 

 

Without addressing this other end of the AMR problem, our inadequate pipeline, stewardship will only delay the inevitable. 

 

 

 

 

The Pasteur Act - A View from Industry

Chris Burns

 

Evan Loh

We will continue our discussion of the Pasteur Act as proposed by Senators Bennet and Young. Today I discuss the bill with two biotech CEOs, Chris Burns of Venatorx and Evan Loh of Paratek. Venatorx has a new antibiotic in phase 3 trials and Paratek won approval of their Nuzyra in 2018. Both expressed their appreciation to the Senators for bringing Pasteur forward. 

 

To remind you, a summary of the bill is here and the full bill (as it stands) is here.  As I noted in the last blog, the Pasteur Act proposes a subscription plan not dissimilar to what is being implemented in the UK and Sweden.  The plan will purchase a specified number of doses (or the rights to such) at some price over a multi-year period.  The total commitment proposed over up to 10 years is not less than $750 million and not more than $3 billion! The proposal only covers federally funded programs such as Medicare, Medicaid, VA, etc. There is a statement that encourages HHS to encourage participation by private payers . . .The bill is planned to assure sponsors that they will have guaranteed income in the absence of marketing – a delinkage between sales volume and revenues.

 

Everyone agrees with Chris Burns that waiting for market forces to increase investment and antibiotic R&D is futile. Both CEOs agreed (as do I) that Pasteur does not provide enough specifics for industry to judge how it will affect commercialization of their new antibiotics. They both offered a number of key questions and concerns. 

 

Pasteur does not address the need for hospitals to place the new drugs on formulary and to stock at least a small number of doses. Recognizing that the majority of US hospitals are under 200 beds and that these hospitals are often in dire financial straits, the payment required to stock drug may be too much of a burden. (The same would be true for the DISARM Act by the way). 

 

Chris Burns noted that since the entire subscription contract is with the sponsor, the list of pharmaceutical middlemen with their various price mark-ups is not affected. Evan Loh noted that in DISARM, by contrast, pricing is defined by the drug’s Average Sale Price or ASP. 

 

Chris Burns is looking for more clarity as to whether the subscription is for an actual number of courses of therapy (per year or per award period) or is more for a guarantee that the drug will be commercially and federally available in the distribution chain. He believes it is the latter. In that case, he accepts that if the government makes the annual subscription payments, it wants a “credit” back when it effectively pays a second time through normal distribution (e.g. through Medicare or Medicaid reimbursement).

 

He also pointed out that DISARM might work better IF one can achieve reasonable peak year sales because of the proposed reimbursement. He also notes that DISARM will work better (obviously) for those sponsors whose products might not qualify for the Pasteur subscription based on the proposed committee or panel to make these choices. Evan Loh suggested that this committee plan was, in fact, too opaque and would prefer that all QIDP products approved over the last five years be offered such a subscription automatically. I agree with both CEOs that the panel who makes this decision as to which products are deserving is too vague and will not encourage investors.  We need a much more transparent process such as designating top CDC and/or WHO priorities that are already well defined as criteria which might obviate the need for a panel.  FDA could make this determination. 

 

Evan Loh, as one might guess, strongly prefers DISARM.  His company has carried out interviews with key pharmacists who suggest that a promise of reimbursement would lead to a clear increase in positive formulary decisions for Nuzyra. 

 

Evan views Pasteur as complementary to DISARM depending on eligibility and process. The bill proposes transition measures that might be attractive but more clarity required.  For example, according to Evan, Pasteur should provide for a transition contract for all recent QIDPs in the range of $250 million. This will immediately help save small biotechs from bankruptcy at the moment of commercialization.  Evan suggests excluding big pharma (that we would need to define) from these transition grants. He further suggests that there be a post-acceptance review at some point such as is proposed in DISARM.  Above all, Pasteur must avoid the creation of impossible hurdles. It is clear to both CEOs that investors still lack confidence and it is not clear to them that either of these Acts, should they become law, will provide that confidence until data shows that they can provide for successful commercialization of needed new antibiotics.

 

I asked both CEOs about alternatives to DISARM and Pasteur. Both agreed that contracts for addition to the US strategic stockpile would be viable IF there were enough funds to make a large purchase comparable to the sums anticipated by Pasteur – something that does not appear to be the case currently. 

 

I specifically proposed a Hybrid Market Entry Award of ~$2 billion provided over the first five years post approval of a new antibiotic addressing CDC’s high priority pathogens. In this case the sponsor would be limited to charging a low (to be defined) price during those first five years. After that period, the sponsor would be allowed to gradually increase the price over the life of exclusivity of the product. The idea would be to provide a motivation for generic manufacturers to enter the marketplace after the end of branded exclusivity. Chris Burns thought that this would work much better than Pasteur, but noted that it is much less politically palatable. Evan Loh was skeptical that a sponsor would be able to increase prices enough to achieve the stated goal. 

 

Evan suggested a small, initial government investment that would be enough to get the sponsor to profitability after 2-3 years.  At that point the government could charge the sponsor a royalty such that the originating fund could become evergreen. Personally, I am skeptical that this would work in the absence of many more patients with resistant infections.

 

Conclusions:  There are too many questions around key aspects of Pasteur for industry to have confidence that it would work as intended according to both the CEOs I interviewed. However, both CEOs look forward to more development of the concept.

 

 

I am grateful to both Evan Loh and Chris Burns for spending the time with me to help clarify industry concerns around recently proposed government aid for the suffering antibiotic R&D community. 

Introducing the Pasteur Act for AMR

 

WARNING - This is long!

 

Today, I discuss the Pasteur Act, a new bill proposed in the US Senate by senators Bennet and Young, with Ryan Cirz. You can find a summary of the bill here and the full bill (as it stands) here. The Pasteur Act proposes a subscription plan not dissimilar to what is being implemented in the UK and Sweden.  The plan will purchase a specified number of doses (or the rights to such) at some price over a multi-year period.  The total commitment proposed over up to 10 years is not less than $750 million and not more than $3 billion! The proposal only covers federally funded programs such as Medicare, Medicaid, VA, etc. There is a statement that encourages HHS to encourage participation by private payers . . .The bill is planned to assure sponsors that they will have guaranteed income in the absence of marketing – a delinkage between sales volume and revenues. But, will it actually work that way?

 

Ryan Cirz:  We have a math problem in the field.  Revenues are limited by price x volume.  Durations of therapy are generally short, so volume is ~ number of patients.  Either price or number of patients must go up for products to be sustainable in the marketplace.

 

Enabling higher pricing is the focus of the DISARM act (an Act I believe is needed to make the PASTEUR act function properly and drive optimum behavior).  The low number of patients can be solved two ways:  just wait until there are more patients, or artificially bolster the economics by ‘buying’ access to more drug than you need at that moment in time – the latter is what I perceive PASTEUR as attempting to do. 

 

I’m sure some readers are thinking ‘if there aren’t that many patients, maybe there’s no need and we shouldn’t spend taxpayer money on this!’ – hey, maybe that’s correct.  I will say 37 years ago we decided <200,000 patients/year didn’t make a market, but we didn’t want to leave those patients without treatments – hence the Orphan Drug Act.  Here we are talking about a current market size where there are only 10,000 or 50,000 patients – and antibiotics cure people fast (unlike most orphan drugs) – so it’s no wonder the market is breaking.

 

If you are in the camp that you’d rather just wait until there are sufficient patients for the market to solve itself, it’s important to remember the vast majority of patients’ experience with an antibiotic is during its much longer lifespan as an inexpensive generic.  If you want those generics to exist in the future, there must be a way to reward the innovator companies (more importantly, their investors) during the short, branded years after launch – then 10-15 years later, when the market is big, society gets cheap access ad libitum.

 

There are other examples of this in the US.  One is the State of Louisiana’s subscription for HCV therapeutics for their Medicaid population. In that case, Louisiana guarantees a purchase of a specific number of doses of these drugs at a negotiated price (lower than the usual retail price). The company is guaranteed revenues upfront. The State saves money over the number of patients treated and – therefore – can treat more patients.  This is a win-win for taxpayers, patients and Louisiana.

 

1.     The subscription is for government payers only.  While this is a large number of very key payers (VA, Medicare, Medicaid etc), it does not include private insurers. The bill encourages HHS to encourage private payers to participate, but how will this work exactly in your opinion?

Full disclosure:  I have no idea how this will work – related though - I prefer a system with a de-linked incentive and a natural competitive market. My fear is, without some sort of competitive market, there will be regression to minimum standards to be eligible for a subscription contract.  There are infinite parameters that can be dialed when designing and developing a drug and without market forces, the pressure to strive for the very best you can achieve will be absent.  So I’m open-minded as we start to really experiment and get specific with these pieces of legislation but hoping we have a stabilized base of revenue from a PASTEUR-type system and perhaps leave the private payer market separate so there’s reason to compete to make the very best product – even within the subscription tiers – TBD as things unfold

 

2.     If I am a hospital pharmacist, when I order an antibiotic covered by Pasteur, will I need to pay the upfront price to stock the drug before being reimbursed by a payer one patient at a time?  I don’t know the answer to this and neither does Ryan (apparently). But I suspect that hospitals will have to pay upfront to stock the new drug.

 

3.    If I am a sponsor, will I need to work to get my product on the formulary (assuming I have to pay to stock the drug)? How much will this interfere with the presumed delinkage of the model?

 This is a great question because it costs a lot of money to support formulary review.  Pharmacists often depend on the sponsor to generate additional data beyond what’s in the approval package – sometimes even assembling the information for the hospitals.

DS here – In my view, Pasteur will have to have a contractual mechanism obligating sponsors to support formulary decisions in hospitals.

4.     If I am HHS, how will I determine how many doses to order and how do you see price negotiations progressing?

This is an open question I have – and where I could see things breaking down if there isn’t a normal competitive market to supplement the subscription.  The only super clear number to me is there will be an annual payment and the totals for all payments will range from $750M - $3B.  Also, revenues from federally insured will be subtracted, but at what unit price?  The only information is a price floor, which I assume is there to avoid enticing use over expensive generics like carbapenems. 

If there is a set number of doses that must be available, that imputes a price per course.  If the number of doses that must be available is determined based on disease prevalence, then could that entice people to go for the rarest condition as long as it qualifies for the highest reward? – why? - if I only have to supply super small numbers – I don’t have to worry about cost of goods, re-stocking, or frequent pharmacovigilance reporting…

It would be important to see just a bit more detail on the proposed mechanics here.  For a number of scenarios I can picture, having some component of a normal competitive market may help counteract some behaviors I could see going awry in a subscription-only incentive world.

6.  If I am a sponsor, how will this effect my development, post-approval development and marketing plans?

If PASTEUR passed tomorrow, for me at least - I’d say no change right away to the pipeline focus.  It will take quite a bit of time to spin up the committees and see how the different tiers are defined.  There’s even some funding to bridge that initial period – Pandemic stockpile purchases and contracts that could provide post-market development support.

 We need to see how this committee values different attributes – of course we can all predict the types of things that would drive value of an award.  HABP/VABP label > cUTI/cIAI; including non-fermenters is a higher value tier. (From DS – an oral cUTI drug active against high priority pathogens would also be1st tier I would think).  But nuances around narrow vs. broad spectrum (do I just need 1 non-fermenter or many?), what discounts apply to the almost infinite spectrum of safety considerations, and my fear novel mode of action, and not novel spectrum of activity will be the definition of novel could swing the incentive structure quite dramatically.

 So I’d do what I’ve always done – keep a diverse pipeline of assets at different stages of maturity so you can pivot as the rules change.  Perhaps some pipeline programs that clearly have no hope in the current reimbursement environment (say a narrow-spectrum inpatient only program) you might push a little further along at risk if legislation passes – but otherwise no immediate change until we see how value is defined.

 Post-approval plans – it seems obvious that one of the goals of PASTEUR would be to provide some incentive for label expansion.  While it’s not explicitly stated, there is language around ‘upgrading’ your subscription tier at a later date.  So for example if I come up with a drug active against CRE/CRAB/CRPA and initially develop it in cUTI, say that gets me the middle tier – but if I get a HABP/VABP indication later, I get the higher tier.  I do like that it creates incentives to keep studying the drug post approval – I know physicians want this.  It will be interesting to see if that could incentivize any adverse behaviors – for example delays to market:  HABP/VABP labels typically come several years after initial approval – so is it better to delay approval 5 years for 5 more years of top tier payments or get my 5 years of cUTI payments and then take 5 of the top tier?

 Again in the immediate term, it looks like there will be PBS-style contracts to bridge those companies that are nearing approval now – so I’d focus on making sure I’m in position for those as the idea is they’d cover the post-approval costs and purchase some drug to bolster initial revenues while we sort the rest of this out!

 

AMR and Europe - What Happened?

 Like many of you, I recently received a notification from John Rex and Kevin Outterson regarding the fact that many recently approved antibiotics will not be marketed in Europe. At first glance, I assumed that these products were simply unable to obtain a price that would provide for a return on investment leading the companies to abandon the European marketplace. But, based on the information provided by Rex and Outterson, its more complicated and more discouraging than that.

 

To go back in time, during the struggles at the FDA starting around 2000, Europe almost seemed like a haven of regulatory bliss for antibiotic developers.  Many of you will remember how antibiotics almost always were approved in Europe one or more years after their approval in the US during the last part of the last century. We viewed Europe as slow, cumbersome and driven by inconsistent and often academic concerns. But these perceived faults were clearly overcome when Europe became a regulatory haven as an alternative to an FDA that had lost its way. 

 

During my consulting years, that covered the worst of the FDA antibiotic crisis, I often advised my clients to work through European regulators primarily and put the FDA aside or at least on a lower priority in terms of trying to negotiate clinical trial designs that could lead to approval. My clients, perhaps correctly, noted that they would have a difficult time obtaining a return on their investment without the US market and as such, the FDA became a key hurdle for them to overcome. Unfortunately, years were lost in that struggle as were several of my clients. 

 

Then, in 2012, the FDA awoke from their state of hibernation realizing that the antibiotic pipeline had all but disappeared under their regulatory restrictions – especially for antibiotics targeting pneumonia and other serious infections. They quickly established new regulatory pathways that are more efficient and rapid for new antibiotics addressing resistant infections. 

 

And here we are in 2020.  Our antibiotic pipeline remains in shambles mainly due to a lack of a sufficient marketplace. But we must remember that “sufficient” depends on costs to get there and stay there. And costs, often, still depend greatly on the regulators. 

 

Nabriva will not market Lefamulin in Europe partly because it is unable to find a commercial partner to drive sales.  But more ominous in their recent SEC filing is the statement that they may not be able to continue to survive at all given marketing restrictions associated with covid plus outstanding obligations and debt. 

 

Plazomicin has been withdrawn from Europe apparently because the costs of the pediatric trials required in Europe “exceed all estimates of potential sales” in the region. 

 

Eravacycline is the victim of the financial difficulties of its parent company, Tetraphase, its limited indication and its relatively poor advantages compared to competing products. 

 

Paratek's omadacycline was withdrawn from consideration in Europe because the EMA insisted on a second trial in community-acquired pneumonia. Omadacycline was approved in the US based on two successful trials in skin infection and a single trial in pneumonia consistent with FDA guidelines for approval in both indications. FDA approved omadacycline for both indications but requested a second pneumonia study as a post-approval obligation. 

 

In the case of both omadacycline and plazomicin, the regulators have doomed the products for the European market. Some may argue that these products do not deserve to be marketed given the availability of other agents.  In fact, for omadacycline, that almost seems to be what the EMA is saying. On the other hand, the regulatory hurdles to the marketplace in Europe now become yet another nail in the coffin of new antibiotic investment in research and development. After placing so much hope in European regulators, I find I am profoundly disappointed in their actions. 

Too Little is not Enough

 

Those of you who joined the recent AMR conference or who receive John Rex’s very useful emails or who follow his website AMR Solutions will doubtless know that there have been recent advances in reimbursement programs in Europe for antibiotics. With all of the deepest respect for John and for Kevin Outterson in this regard, no one should believe that these tiny baby steps represent significant progress in the effort to fix the antibiotic marketplace. 

 

Germany, for example, recently allowed “reserve” antibiotics special exclusion from their general hospital diagnosis related reimbursement so the antibiotics can be reimbursed at a higher level. John and Kevin explain that this is a reversal from their previous stance that required new antibiotics to be reimbursed at levels similar to generic drugs unless they had shown superiority in clinical trials – something that can occur only rarely for antibiotics. They point out that France also has a DRG carve-out for antibiotics and that the US is contemplating one in the form of the DISARM Act currently before congress (as it has been for eons it seems). (Currently the US has a partial carve-out available through their NTAP program that I’m not sure anyone uses). Kevin and John note that Sweden has announced which antibiotics will benefit from their pilot study of a subscription payment model similar to what is contemplated by the UK. 

 

Is this all good news? I pose this question to myself and to you my readers. Some of this seems like national health authorities are motivated to do something to correct the antibiotic market but don’t want to do more than their country’s “fair share.”  This is similar to the DRIVE AB estimate of Europe’s “share” or “obligation” within the context of a global effort to provide a pull incentive for antibiotic R&D. But the major fallacy with all of these approaches is that there is no global effort to establish an appropriate pull incentive for antibiotic R&D. If the major economies of Europe, like Sweden and the UK, want to base a subscription model just on the need within their own population, we will ever get anywhere. Europe has to be Europe and provide for the needs of all its members from richest to poorest. 

 

And where does the US fit in all this?  Nowhere! Even DISARM, that is so enthusiastically supported by almost every antibiotic biotech I know will not, in my humble opinion, be nearly enough of a pull incentive. It is just another baby step limited by the rather small population who require targeted or even empiric therapy with new antibiotics active against resistant pathogens. 

 

DRG carve-outs and subscription models limited to today's needs of various national populations will not provide the kind of pull incentives we need unless all countries participate. To expect that they will is, at best, naïve and at worst, irresponsible. 

 

These approaches are hamstrung by the population at risk for resistant infections today. We need an approach today that looks forward to tomorrow.  None of these achieves that goal. We need incentives today that project our needs 10 years from now. We need to see this as an investment in the future, not a make-up payback for today. 

 

The optimists see the glass as half full. I see a desert with no water in sight. The optimists say this is progress.  We weren’t even contemplating DRG carve outs and subscription models or any pull incentive 10 years ago, they say.  True.  Ten years ago, the US did not even have a clear path for the clinical development of needed new antibiotics because the FDA was lost. Ten years ago, we were all focused on the FDA. 

 

So, you ask – what IS enough? We need a country or a region to take a leadership role and come up with a pull incentive for the world – for all of us. Otherwise, by the time a significant pull incentive comes from everyone’s desire to pay only their “fair share” we will have lost most or all of the antibiotic companies that remain.  We will be without protection when the resistance pandemic arrives. 

 

Too little is not enough!