The broken market for antibiotics, continued

 Not only is the market for new antibiotics broken, companies that explore them are going broke.

Here's a story from the WSJ:

The World Needs New Antibiotics. The Problem Is, No One Can Make Them Profitably.  New drugs to defeat ‘superbug’ bacteria aren’t reaching patients   By Dominique Mosbergen

"The push for antibiotics to fight fast-evolving superbugs is snagging on a broken business model. 

"Six startups have won Food and Drug Administration approval for new antibiotics since 2017. All have filed for bankruptcy, been acquired or are shutting down. About 80% of the 300 scientists who worked at the companies have abandoned antibiotic development, according to Kevin Outterson, executive director of CARB-X, a government-funded group promoting research in the field.  

...

"The reason, the companies say: They couldn’t sell their lifesaving products because the system that produces drugs for cancer and Alzheimer’s disease—which counts on companies selling enough of a new treatment or charging a high enough price to reward investors and make a profit—isn’t working for antibiotics. 

New antibiotics are meant to be used rarely and briefly to defeat the most pernicious infections so bacteria don’t develop resistance to them too quickly. Companies have priced them at 100 times as much as the generic antibiotics doctors have prescribed for decades that cost a few dollars per dose. Most have sold poorly. 

...

"Most large pharmaceutical companies aren’t developing antibiotics. Several have closed or divested antibiotic development programs. “There’s no profitability,” Hyun said. "

The once and future Pasteur Act to incentivize antibiotic discovery and development

It doesn't look like Congress is going to act this year to pass the Pasteur Act.

Here's the NY Times:

Can a Federally Funded ‘Netflix Model’ Fix the Broken Market for Antibiotics? Shortages and drug-resistant germs have renewed attention on a $6 billion proposal in Congress that would reconfigure the way antimicrobial drugs are developed and sold. By Andrew Jacobs

"The broken marketplace for new antimicrobial drugs has stirred debate over a bill, languishing in Congress, that would dramatically reconfigure the way antibiotics are discovered and sold in the United States.

"The $6 billion measure, the Pasteur Act, would upend the conventional model that ties antibiotic profits to sales volume by creating a subscription-like system that would provide pharmaceutical companies an upfront payment in exchange for unlimited access to a drug once it is approved by the Food and Drug Administration.

...

The measure attempts to address the vexing economics of antibiotics: Promising new drugs often gather dust on pharmacy shelves because health providers would rather save them for patients whose infections don’t respond to existing ones. That’s because the more frequently an antibiotic is used, the more quickly it will lose its curative punch as the targeted bacteria develop the ability to survive.

...

"The bill, a decade in the making, has bipartisan support and is widely backed by researchers, health care policy experts and drug company executives. But as momentum for the bill has gained steam, opposition has emerged from a small group of doctors and health care advocates, many of them critics of Big Pharma. They say the bill is a drug-industry giveaway — and unlikely to address the problem of antibiotic resistance.

...

"It can cost a $1 billion or more to bring a new drug to market, but earning back that investment has proved increasingly elusive. Unlike blockbuster medications for chronic conditions like diabetes or high blood pressure, most antibiotics are prescribed for just days or weeks. Many hospitals, unwilling to pay the high prices that accompany new therapies, prefer to rely on cheaper but less effective options, experts say.

A number of antibiotic start-ups have gone bankrupt in recent years, sending a chill through the industry."

*****

Here's some more background from U. Minnesota:

For PASTEUR Act advocates, the finish line is in sight for antibiotic development aid by Chris Dall,   December 6, 2022

"With the clock ticking on Congress to finish its business before the end of the year, groups representing infectious disease and public health professionals and the pharmaceutical industry are trying to push a bill across the finish line that could change the antibiotic development landscape.

"The bill, known as the PASTEUR (Pioneering Antimicrobial Subscriptions to End Upsurging Resistance) Act, would create a subscription-style payment model in which the federal government would pay up front for access to Food and Drug Administration (FDA)-approved antibiotics that target drug-resistant pathogens and meet critical, unmet health needs.

"The aim of the bill, which would delink companies' profits from the volume of antibiotics sold, is to help solve the market challenges that have led many pharmaceutical companies to abandon antibiotic development and contributed to the weak pipeline for new, innovative antibiotics.

"Originally introduced in 2020 and re-introduced in June 2021, the PASTEUR Act, according to advocates, is closer than ever to becoming a reality in the wake of the COVID-19 pandemic and amid growing concern about rising antimicrobial resistance (AMR) rates and the lack of new antibiotics. But time is running out, and the how the bill might fare in the next Congress is unclear."

Preparing for a drug-resistant bacteria pandemic---vaccines and challenge trials

 Axel Ockenfels recently alerted me that "The German National Academy of Sciences Leopoldina has established a working group to analyze the economic causes of the problem of global increase in pathogens resistant to antimicrobial agents, and develop better incentives for developing antibiotics and possible solutions. "

I sent him some quick thoughts, as follows:

"one direction that seems potentially worth exploring is vaccines for bacteria pathogens.  Most of our vaccines are antiviral, but there are some vaccines against bacterial infection, even though we mostly deal with bacteria through post-infection antibiotics.  But antibiotic discovery has lots of problems, both economic and technical. And it appears that vaccine technology has advanced a lot, given the speed with which Covid vaccines were developed.  So I wonder if it wouldn’t make sense to start now to develop vaccines against some of the bacteria that we think might be candidates for developing antibody resistance, so that when those variants show up, we’ll be able to protect lots of people from getting infected by vaccinating them. 

 And challenge trials would be very useful for that, since pre-pandemic it’s hard to do conventional trials of a vaccine against a disease that most people don’t get. Challenge trials wouldn’t necessarily be very hazardous if the relevant bacteria aren’t yet highly antibiotic resistant, since the diseases would be curable… (The assumption here is that a vaccine against say, conventional tetanus, would also be protective against antibiotic-resistant tetanus, which might be true since the evolutionary pressure to evade a new vaccine is likely very different from the long evolutionary path that leads to resistance to an existing antibiotic..)"

********

Earlier posts, on antibiotics here, and vaccine challenge trials.

More on the looming shortage of new antibiotics

 From Medpage Today:

Superbugs Are Getting Stronger— Our defenses are getting weaker  by David Thomas, MS, and Emily Wheeler 

"There are only 64 antibacterial therapeutics currently in clinical development. That's compared to 1,300 treatments in development for various cancers. Over one-third of antibacterial drug candidates target just two bacteria: Clostridioides difficile and Mycobacterium tuberculosis. That leaves only 44 drugs to target all other pathogenic bacteria.

"In other words, the antibacterial pipeline is grievously small. And it's shrinking compared to previous decades. In the last 35 years, just one antibacterial with a novel way to target bacteria has been approved. Comparatively, 18 new antibacterials with novel targets were approved by the FDA between 1940 and 1990.

"Meanwhile, superbugs continue to grow stronger. New research estimates they claimed 1.27 million lives in 2019 -- more than twice the estimated number of annual deaths just 5 years prior.

...

"Every time we use an antimicrobial, the target microbes have a chance to survive and become resistant. So, clinicians prescribe them only when needed. But this sound medical practice makes for poor economic incentives for private companies in a market system.

"Take the experience of the biotech firm Achaogen, which secured FDA approval in 2018 for its novel antibiotic plazomicin (Zemdri), after 15 years of development. The medication treats infections caused by one of the most challenging superbugs, carbapenem-resistant Enterobacteriaceae.

"While important for the overall armamentarium, such novel antimicrobials are used particularly sparingly to prevent dangerous pathogens from developing resistance to our strongest medications. As a result, clinicians hold novel antibiotics like plazomicin in reserve, using them judiciously to preserve effectiveness. That means companies like Achaogen don't sell large quantities of the drugs they develop -- or earn back the capital they invested in the research and development process.

"Achaogen filed for bankruptcy in 2019. In the 3 years since, several other small biotech companies that successfully cleared the clinical pipeline with FDA-approved antibacterials have seen a similar fate.

"The market conditions for antimicrobials are so discouraging that most large biopharmaceutical companies have pulled out of the sector entirely. Small companies discovered over 80% of the antibacterial therapeutics currently in clinical trials.

"These dynamics are causing investors to vacate the antimicrobial sector, too. Venture capital funding for biotech firms focusing on antibacterial research declined over the last decade, while other areas such as oncology rose 700%.

... 

"One solution is the bipartisan, bicameral Pioneering Antimicrobial Subscriptions To End Upsurging Resistance (PASTEUR) Act, which would change the current dose-based payment model for certain antimicrobials. Under PASTEUR, the government would offer developers of the most critically needed antimicrobials between $750 million and $3 billion up front in exchange for access to their medications once they hit the market.

...

"Another bill under consideration is the Developing an Innovative Strategy for Antimicrobial Resistant Microorganisms (DISARM) Act. The legislation would increase Medicare reimbursements for certain antimicrobials"

************

I don't know how I should feel about the fact that proposed legislation is named with clever acronyms (and I'm not sure that DISARM sends the right message...)

Subscription as an advanced market commitment for new antibiotics

 Axel Ockenfels points me to the following discussion of a subscription model for antibiotics: governments would guarantee that they would "subscribe" to new antibiotics, providing payments even though the volume of prescribed doses might be small to prevent bacteria from adapting to it [see this earlier post on  The economics of antibiotics]

This is how to fight antibiotic-resistant superbugs with a simple subscription payment model  by Jeremy Farrar, Director, Wellcome Trust and Mads Krogsgaard Thomsen, Chief Executive Officer, Novo Nordisk Foundation

"A subscription model based on fixed annual payments in return for a sufficient antimicrobial product supply guarantee, de-linked from the volumes sold would offer manufacturers security and financial predictability."

"A few weeks ago, the Lancet published an analysis which concluded that global mortality associated with antimicrobial resistance (AMR) has been greatly underestimated, and that with 3,500 daily deaths being directly related to AMR, it is one of the leading threats to human health worldwide. The analysis covers more than 200 countries and is the most comprehensive study on the consequences of antimicrobial resistance to date." [see earlier post]

...

"Decades of antibiotic overuse and misuse, in people and in animals, has caused the emergence of “superbugs”, strains of bacteria resistant to existing medicine, leaving the world vulnerable and decades of medical progress being undermined.

"At the same time, the world has not seen the introduction of truly novel antibiotics for many years. Regrettably, an unsustainable innovation and payer ecosystem has caused the pipeline of drugs with new targets or mechanisms of action to dry up.

...

"Wellcome Trust and the Novo Nordisk Foundation have both been doing what we can to support vital antibiotic innovation, through our investments in CARB-X, the REPAIR Fund, and the AMR Action Fund. But while our investments have done much to shore up the early-stage pipeline, we now need governments to do their part and ensure that antibiotics can reach global markets – available, accessible, and affordable. With this in mind, we recently commissioned Boston Consulting Group and the World Economic Forum to produce a report with recommendations on how to address these remaining gaps in support for antibiotic R&D. The report provides a roadmap for global leaders to study and adopt.

...

"The resulting recommendation is to apply a subscription payment model as the way forward. Such a payment scheme is already being piloted in the UK and Sweden. The subscription model is based on fixed annual payments for a set period, in return for a sufficient antimicrobial product supply guarantee, and, crucially, de-linked from the volumes sold. Recently, this has been dubbed the ‘Netflix model of antibiotics’ or compared to safeguarding properties by investing in fire extinguishers, hoping that there will never be a need for them.

"The idea is not new, and political leaders have time and again made warm commitments to act to support antibiotic development. But now is the time to turn these into solid action and bring fresh political goodwill to get them implemented. In the US, the world’s largest pharmaceuticals market by some margin, legislators are currently considering such a subscription model. With the support of both political sides, the so-called PASTEUR ACT (The Pioneering Antimicrobial Subscriptions To End Up Surging Resistance) bill has been drawn up, precisely with the aim of creating more attractive conditions for the development of new antibiotics.

"The subscription model is advantageous compared to the current alternatives, as it offers manufacturers security in terms of their revenues as well as certainty in terms of the demand.

Antibiotic discovery and development (from caves, to clinical trials to clinics)

 The development of antibiotics is in the hands of big pharmaceutical companies, which can manage and afford large scale clinical trials of new candidates.

But antibiotics don't have to be discovered in the biochemistry lab. Nature is red in tooth and claw at the microscopic level as well as for larger living beings, and everyone out there has to fight off bacteria. So there are lots of natural anti-bacterial chemicals yet to be discovered (just as penicillin derives from a mold). And so spelunking naturalists have opportunities to find new micro-organisms with their own anti-microbial defenses. But then the particularly difficult economics of antibiotic development come into play.

Here's an old story about that from Popular Science:

Scientists are spelunking for cave gunk to fight superbugs. Deep in caverns around the world, bacteria are laboring to make antibiotics we can discover and use for ourselves. BY KATE BAGGALEY

“You start out with 10,000 candidate chemicals, and 12 years and a billion dollars later you might have one,” Lavoie says. “But you’ve got to have a place to start, so the more you find the better off you are.”

***********

Here's a recent article exploring some of Medicare's opportunities to provide advance market commitments to pharma companies developing antibiotics.

Gandhi N, Schulman KA. New Medicare Technology Add-On Payment Could Be Used As A Market Support Mechanism To Accelerate Antibiotic Innovation. Health Aff (Millwood). 2021 Dec;40(12):1926-1934. doi: 10.1377/hlthaff.2021.00062. PMID: 34871069.

Abstract: Despite growing antibiotic resistance, the clinical drug development pipeline for antibiotics has been sparse largely because of an unsustainable business model. We illustrate three models to accelerate antibiotic development, using Medicare new technology add-on payments as a market support mechanism. The first two models subsidize drug development for Medicare beneficiaries, and the third model applies a payment for every patient with a resistant infection to essentially create a funding pool. We found that the reimbursement required to sustain research and development would range from $637 to $121,365, depending on the payment model and the incidence of the resistant infection in question. With a $300 million public research subsidy, the payment for an antibiotic would drop to between $273 and $10,396 per course. Our market support model could increase the likelihood of attracting private investment for antibiotic development

"To make the economics of the antibiotic market even more challenging, intravenous antibiotics are reimbursed as part of a fixed Medicare Severity Diagnosis-Related Group (MS-DRG) payment under the inpatient prospective payment system of the Centers for Medicare and Medicaid Services (CMS). This model of a fixed payment per patient directly incentivizes hospitals to prescribe older, lower-cost antibiotics over more expensive novel therapies.9 This situation for antibiotic therapies is in stark contrast to the oncology market, where hospitals earn a margin above the list price of outpatient oncology drugs.10 The oncology model accelerates the adoption of novel products, which suggests that manufacturers do respond to financial incentives in the market.

...

"A market support mechanism that is receiving increasing attention is applying existing CMS authority for new technology add-on payments (NTAP) to hospital payment for novel antibiotics and antifungal therapies. Under the NTAP model, hospitals receive a separate payment for administration of designated therapies in addition to the underlying MS-DRG payment. This program was developed to support payment for expensive new medical devices and is intended to be time limited while CMS recalculates the underlying MS-DRG payment to include the cost of the new technology. This technology carve-out model has existed since at least 2001, but new eligibility criteria may make it easier for antibiotics to qualify for it.

...

"In this article we assess the opportunity to evolve the NTAP program into a true market support mechanism (NTAP-MS), assessing how different payment models that build on the NTAP-MS approach affect incentives for antibiotic development."

The future pandemic that has already started making an appearance

I never expected the Covid pandemic: I was expecting a different one, coming not from a virus but from an antibiotic-resistant bacteria.  That one is still in our future, but here's an article that indicates that there are many bacterial candidates that could start something big, and taken together they are already starting to loom on the horizon.

In the Lancet (Available online 19 January 2022, In Press, Corrected Proof):

Global burden of bacterial antimicrobial resistance in 2019: a systematic analysis  By the  Antimicrobial Resistance Collaborators 

"Background: Antimicrobial resistance (AMR) poses a major threat to human health around the world. Previous publications have estimated the effect of AMR on incidence, deaths, hospital length of stay, and health-care costs for specific pathogen–drug combinations in select locations. To our knowledge, this study presents the most comprehensive estimates of AMR burden to date.

...

"Findings: On the basis of our predictive statistical models, there were an estimated 4·95 million (3·62–6·57) deaths associated with bacterial AMR in 2019, including 1·27 million (95% UI 0·911–1·71) deaths attributable to bacterial AMR. At the regional level, we estimated the all-age death rate attributable to resistance to be highest in western sub-Saharan Africa, at 27·3 deaths per 100 000 (20·9–35·3), and lowest in Australasia, at 6·5 deaths (4·3–9·4) per 100 000. Lower respiratory infections accounted for more than 1·5 million deaths associated with resistance in 2019, making it the most burdensome infectious syndrome. The six leading pathogens for deaths associated with resistance (Escherichia coli, followed by Staphylococcus aureus, Klebsiella pneumoniae, Streptococcus pneumoniae, Acinetobacter baumannii, and Pseudomonas aeruginosa) were responsible for 929 000 (660 000–1 270 000) deaths attributable to AMR and 3·57 million (2·62–4·78) deaths associated with AMR in 2019. One pathogen–drug combination, meticillin-resistant S aureus, caused more than 100 000 deaths attributable to AMR in 2019, while six more each caused 50 000–100 000 deaths: multidrug-resistant excluding extensively drug-resistant tuberculosis, third-generation cephalosporin-resistant E coli, carbapenem-resistant A baumannii, fluoroquinolone-resistant E coli, carbapenem-resistant K pneumoniae, and third-generation cephalosporin-resistant K pneumoniae.

"Interpretation: To our knowledge, this study provides the first comprehensive assessment of the global burden of AMR, as well as an evaluation of the availability of data. AMR is a leading cause of death around the world, with the highest burdens in low-resource settings. Understanding the burden of AMR and the leading pathogen–drug combinations contributing to it is crucial to making informed and location-specific policy decisions, particularly about infection prevention and control programmes, access to essential antibiotics, and research and development of new vaccines and antibiotics. There are serious data gaps in many low-income settings, emphasising the need to expand microbiology laboratory capacity and data collection systems to improve our understanding of this important human health threat."

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Earlier:

Wednesday, July 15, 2020

The economics of antibiotics

The economics of antibiotics

Penicillin changed the world, it gave us a weapon against disease causing bacteria. Other antibiotics followed. But then evolution changed bacteria--natural selection in an antibiotic rich environment helped them become drug resistant.  Today, the bacteria are sometimes winning--there are some drug resistant bacteria that seem able to resist all available antibiotics. But drug discovery of antibiotics is slowing. What's going on?

Drugs (including antibiotics) are expensive to develop, test for safety and effectiveness, and bring to market.  Part of the problem is that there isn't likely to be a big market for a new super antibiotic. The reason is that, if it is oversubscribed, it will stop being super--bacteria will become resistant.  So a new super antibiotic would be used sparingly, as a drug of last resort.  That's another way of saying that it wouldn't have big sales.

The NY Times has a story:

Drug Giants Create Fund to Bolster Struggling Antibiotic Start-Ups
"New medicines are desperately needed to treat a growing number of drug-resistant infections, but many companies developing the drugs are short on cash and investments."
By Andrew Jacobs, July 9, 2020

"Twenty of the world’s largest pharmaceutical companies on Thursday announced the creation of a $1 billion fund to buoy financially strapped biotech start-ups that are developing new antibiotics to treat the mounting number of drug-resistant infections responsible for hundreds of thousands of deaths each year.

"The fund, created in partnership with the World Health Organization and financed by drug behemoths that include Roche, Merck, and Johnson & Johnson, will offer a short-term but desperately needed lifeline for some of the three dozen small antibiotic companies, many of them based in the United States, that have been struggling to draw investment amid a collapsing antibiotics industry.
...
"“Antibiotics are the mortar that holds the entire health care system together,” said David A. Ricks, the chief executive of Eli Lilly, who helped spearhead the effort. “We make drugs for diabetes, cancer and immunological conditions, but you couldn’t treat any of them without effective antibiotics.”

"In an interview, Mr. Ricks said he was well aware of the irony that Eli Lilly and many of the other companies contributing to the fund were once the giants of antibiotic development but have long since abandoned the field because of their inability to earn money on the drugs. “We know firsthand how broken the system is,” he said.

"The crisis stems from the peculiar economics and biochemical quirks of drugs that kill bacteria and fungi. The more often antimicrobial drugs are used, the more likely they are to lose their efficacy as pathogens survive and mutate. Efforts to promote antibiotic stewardship mean that new drugs are used as a last resort, limiting the ability of companies to earn back the billions of dollars it can take to create a new product.
...
"Between 1980 and 2009, the Food and Drug Administration approved 61 new antibiotics for systemic use; over the past decade that number has shrunk to 15, and a third of the companies behind those medicines have since gone belly up.  Those backing the fund acknowledge that the effort is largely a stopgap measure. Industry executives and public health experts say that fixing the broken marketplace for antibiotics would require sweeping government intervention to create financial incentives for drug companies, including policy changes that would increase reimbursements for lifesaving drugs kept under lock and key and used only when existing therapies fail."