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."