Wednesday, July 15, 2020

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."

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