David's New Book

Wednesday, July 19, 2017

Antibiotics - Incentives Meet Reality

There are many important developments occurring on the antibiotics front. Progress in regulation, especially by the FDA, continues. Push incentives are gaining even more steam. GARDP recently announced an agreement to pursue a novel therapy for Neisseria gonorrhea infection. But I am staying focused like a laser on the issue of pull incentives because I consider this our greatest and most urgent challenge.

Recent data suggests that recently approved antibiotics are not earning anything like the kind of revenues that new products in other domains such as neuroscience (multiple sclerosis, Alzheimer’s) or oncology currently garner. $80 million per year seems good for these new antibiotics. According to the Boston Consulting Group's report for the GUARD initiative, for recent antibiotic launches, the net present value projected over 10 years is estimated at minus $500 to minus $100 million.  This compares to minus $450 million to plus $8.2 billion for recently launched oncology products. Obviously, for antibiotics, this makes no commercial sense. 

DRIVE AB, an effort funded by the Innovative Medicines Initiative – an effort jointly funded by the European Commission and the European pharmaceutical industry, just published a commentary in Lancet Infectious Diseases (subscription required – why??!! – sorry) where they provide a hint as to what will be appearing in their final report.  The final report is expected sometime around September this year. The commentary, published a week ago, is in the form of an open letter to the G20, whose meeting recently ended. They suggest a market entry award that is fully or partially “de-linked” (from marketing requirements) in the amount of $500 million to $2 billion paid out over 5 years would be a sufficient pull incentive.  The range exists because they would deduct any research and development funding the company had received for the product prior to launch.  There could also be deductions (or rewards) depending on the innovativeness of the new compound or how well it fits into current medical need priorities.  They promise that their full report will provide a rationale for this. I’m not sure that anything less than $1B will work under any circumstances – but that’s just me.

In their open letter, DRIVE AB asks the G20 to establish market entry reward trial programs or pilots to better understand how different models would work on implementation.  I’m at a loss to see how one could set up a “pilot.”  I think you would have to fully fund several different programs to see which one would attract the most or best candidates or which one would best motivate the industry to remain in or restart antibiotic research. But we await Drive AB’s final report here.

The G20’s response on pull incentives (page 8)? - 
Concurrently, in collaboration with relevant experts including from the OECD and the WHO, we will further examine practical market incentive options.

It seems like the G20 will fall back on the “we need more studies” response that was enshrined in the plan recently released by the European Commission (see my last blog). I guess that was predictable.

But here is the problem. Given the persistent market failure as documented by sluggish sales of new antibiotics that are active against resistant pathogens, pharmaceutical companies that are still active in antibiotic research are surely having second thoughts. We may see more departures. Investors, seeing this market failure, are going to become more reticent again after a recent resurgence of interest fueled by optimism regarding both push and pull incentives. 

We need to act now.  Not in ten years.  Lets not wait for another global pandemic such as the one we experienced with MRSA. Please. I ask all of you to write your representatives in government.  In Europe – this means your parliamentarians, your executives, your health authorities, and anyone else you can imagine. In the US – talk to your representatives, your senators, Tom Price at HHS. Let’s get the Infectious Diseases Society even more active than they already are. Let’s start publishing our own open letters that speak to the urgency of this issue.

We need to start drowning our governments with our sense of urgency here before we fall further into the abyss.

Saturday, July 1, 2017

Antibiotics - Europe Leads with a Mixed Message

The European Commission just released a plan for fighting antimicrobial drug resistance. I expected a great deal from Europe given their leadership on the regulatory front and in antimicrobial stewardship efforts.  They have also funded DRIVE-AB that has been studying pull incentives among other approaches to stemming drug resistance. I am guessing that this plan originates partly from DRIVE-ABs efforts.

There is much to like in the plan and I encourage everyone to read it.  Its less than 30 pages and has big print! 

The EU has a great deal to say on infection control and antimicrobial stewardship – all good.

To support the development of novel vaccines, therapeutics and diagnostics, the Commission will,

·      support research into the development of new antimicrobials and alternative products for humans and animals as well as the repurposing of old antimicrobials or the development of new combination therapies;
·      support SMEs (small and medium enterprises) in their R&D efforts towards innovative and/or alternative therapeutic approaches for the treatment or prevention of bacterial infections, together with the EMA;
·      facilitate sharing of antimicrobial research data among relevant stakeholders to guide future antimicrobial medicinal product discovery and development;
·      support the establishment of a European-wide sustainable clinical research network, which should speed up clinical studies on medicinal products, lower their costs, and improve coordination of clinical research;
·      support research and innovation to promote the use of digital technologies supporting the development of new therapeutics and alternatives.

I am most enthusiastic about the funding of R&D for new antimicrobials and the proposed clinical trials network.

In the section on incentives, the Commission proposes to,

analyse EU regulatory tools and incentives – in particular orphan and paediatric legislation– to use them for novel antimicrobials and innovative alternative medicinal products (e.g. vaccines, antibacterial, antifungal, antiviral agents) that currently do not generate sufficientreturns on investment;

Providing key new antimicrobials an orphan drug designation may (or may not) help provide the economic incentive that is needed.  See my previous blog on this.

But, I must admit that I am deeply disappointed with the EU’s treatment of pull incentives.

The Commission will support research into the development of new economic models, exploring and analyzing incentives to boost the development of new therapeutics, alternatives, vaccines and diagnostics.

If we have any more research on models I’m going to explode! DRIVE-AB just finished their research.  The Office of Health Economics has released a number of reports as has the London School of Economics.  This is a way of saying that Europe, as a unified group of nations, is unwilling to commit the resources required to provide the incentives that have already been recommended by others. I suppose it is also possible that the Commission was unable to choose among the various different models for incentives that have already been thoroughly researched and discussed.  This report therefore throws the responsibility for any action on pull incentives back to the various national authorities in Europe.  And it provides those national authorities with an excuse to further delay.  Rome, Nero anyone?

On pull incentives that we so desperately need to fill our lackluster antibacterial pipeline we now have a dearth of leadership.  The US has retreated to Neverland.  Europe is stuck in more bureaucracy. Until there is an outcry by citizens and legislators both in the US and Europe, this is where we will remain.  Are we going to wait for even more widespread more serious drug resistance problem to arise? Will we need an even larger epidemic than those we have already suffered? What will it take to get governments to act?

On the more optimistic side, my spies in Washington tell me that there is an understanding among legislators that something needs to be done. There are apparently two problems that stand in our way.  The first is the political concern around controlling drug prices. How can we propose a pull incentive and claim that it will reduce drug prices? The second is, apparently, that there is disagreement among various stakeholders (read pharmaceutical companies) as to the size of the incentive they think will be required (read – the amount of money they would like). Come on, guys!  Lets get real!

I know that there are a large number of very smart people working on this. But the clock is ticking . . . . Stay tuned.

Wednesday, June 21, 2017

Antibiotics - The Antismoking Campaign!

There is a great deal going on in the antibacterial field. There are several developments on the regulatory front, the science (PK/PD) front and push incentives keep on coming.  I have been neglecting my blog not because all of this activity is not worthy of publicity and celebration, but because I worry that unless we deal with the elephant in the room, it will all be for naught.

Elephant = Pull Incentives!

While I am more optimistic about the chances of pull incentives being implemented in Europe, without participation by the US, this won’t be enough even if it happens. According the recent OHE report, Europe’s share of any global pull incentive should be proportional to their level of antibiotic market participation – 30-40%. I am not sure how they calculated this number, but this is consistent with what I know about the antibiotic market as of 2014. A division along these lines will require participation by Asian countries outside Japan, including China, Taiwan, Korea etc., as well as Japan and the US, Canada, South America etc. to make up a full incentive. I view the chances of negotiating a deal as complex as this within the next two years or so as somewhere between zero and nil. The easiest approach would be to have Europe and the US (and China???) share the incentive and the easiest way to do that is with a transferable market exclusivity approach (with appropriate “guard rails”) as suggested in my last blog.

There is always the market entry award approach, but coming up with the amount of cash required to provide for ten such awards over ten years (~$20 billion) seems like a hard slog.  This will be especially hard if we have to rely on European national authorities rather than the European Commission. Also, I’m not sure I see the US congress being willing to participate in such an effort in spite of some optimism from my more politically connected colleagues. We can forget about participation in lobbying by PhRMA since they will be so worried about a backlash by the pharmaceutical company “loving” public that they will be paralyzed.
I think we need in an anti-smoking campaign targeting the market failure for antibiotics and its consequences. This might have to be accomplished without industry funding.  We need non-profit groups to get even more involved here then they have ever been and we need to get those who have not yet been involved on board.  The Infectious Diseases Society needs to really put its foot to the floorboard here.  Both the Pew and the Wellcome Trusts are heavily involved in the fight against antibiotic resistance.  We need them to gear up their pubic education efforts to mobilize funding to solve the market failure problem.  What about other non-profit professional societies like the   American Thoracic Society, various oncology-focused non-profits, AARP an others? Clearly, with no new antibiotics, ultimately, those with debilitating and immunocompromising conditions will be paying the price. We need educational ads shown on major networks during prime time including and especially Fox. We need both NPR and conservative talk shows. We need to highlight the efforts of representatives who support the idea of pull incentives while asking viewers to communicate their support to their own congresspersons. I don’t know much about social media – but I’m sure there is a way to leverage that as well. Finally, how about crowd-funding? I know that there are lots of folks out there who know how to do this and who just need motivation and focus. 

LETS DO THIS NOW!!!! I’m not getting any younger . . . .

Saturday, May 27, 2017

Antibiotic Incentives - Old is New

The Office of Health Economics just released a report on incentives to stimulate antibiotic research and development( I was unable to connect to their website to provide you a link to the report - but you may have better luck at ohe.org).  They focused on pull incentives in particular, and they focused on what would work in Europe while noting that the European contribution to any incentive should align with Europe’s contribution to the antibiotic marketplace in general. The report is very well done and well considered.  I recommend a careful read of this work.

At the same time, John Shimkus (R-IL) and Gene Green (D-TX) have introduced legislation in the House of Representatives
Sub-Committee on Energy Commerce and Health that proposes a 1 year transferable exclusivity extension as a pull incentive for antibiotic research and development. This is an idea that first came up in the Infectious Diseases Society’s original Bad Bugs No Drugs White Paper in 2004 and the IDSA still supports the idea today.  In this plan, a company the successfully achieve approval of a needed new antibiotic would receive an extension of their exclusivity (one year in this case) for a product of their choice. This could either be used by the company bringing the antibiotic forward or sold to another company.

Back in 2004, those of us working on the IDSA white paper were convinced that this would work as an incentive.  Investors also indicated they supported it. The idea was declared DOA in congress because of fears that it would raise drug prices and delay the entry of cheaper generic drugs to the marketplace.  According to Barret Thornhill of the Antimicrobial Innovation Alliance, the Democrats are once again digging in their heels with the same objections.  But look, Democrats (I’m one of you, by the way), someone will have to pay for a pull incentive somehow.  The choice is direct taxpayer dollars, a tax on drug companies that would be passed through to consumers anyway or a delay in generic entry. In the best of all possible worlds, I would prefer using tax dollars since this money is at least obtained relatively progressively or less regressively. (My latest understanding from Barrett is that the legislation seems dead - there is not even a working link to the proposed bill anymore.  Thanks, Democrats.)

In the OHE report, the concept of restricting rewards or scaling rewards based on the importance of the new antibiotic to society is raised. Bringing another anti-staphylococcal drug that is only available in intravenous form and that is not superior to other such drugs should probably get less of a reward than a product shown to be active against highly resistant Gram-negative pathogens. Another idea that has been discussed for transferable exclusivity rewards is providing a revenue cap.  For example, if 10 years ago such a reward had been available for a needed new antibiotic, and Pfizer had brought such a product to market, it could have gained  $15 billion dollar reward with a one year exclusivity extension for its lipid-lowering statin Lipitor. Clearly this is way beyond the reward that is thought of as necessary ~$2 billion. None of this exists in the current proposed legislation by Shimkus and Green.

Another question that I continue to consider is – Whom are we incentivizing? Do we want companies that have left antibiotic R&D and who no longer have a sales force capable of handling a new antibiotic to get back into the area?  Such companies might be Abbvie, Bristol-Myers Squibb, Lilly, and others. It seems unlikely that any incentive would drag them back.

What about companies that recently departed the area but are having second thoughts like J&J? Then there is Pfizer that seems committed to antibiotics as an add-on for their hospital sales force but, as far as I know, has not yet committed to re-establishing their antibiotic discovery research effort (an email to Pfizer went unanswered).

What about small companies and Biotech?  Here I think the transferable exclusivity extension is the most efficient award being discussed today either in Europe or the US.  Think about a biotech that is discovering and developing antibiotics like Entasis or Achaogen. The potential for them to be able to sell an exclusivity extension to a large pharma or even to use this possibility to leverage a buyout for their investors would be enormous. Investors were enthusiastic about this idea in the past – I see no reason for them to have changed their minds.  None of the other pull incentives that are being discussed have such a clear and immediate advantage for biotech and its investors as far as I can tell.

What can you do?  Write your congressional representatives and senators and tell them you support transferable exclusivity as an incentive to fix the broken antibiotic marketplace and reboot antibiotic research and development.