David's New Book

Monday, August 21, 2017

Pull Incentives - An Open Letter to my Legislators

Dear Readers – please copy this and share it with your own representatives.

Dear Senators Blumenthal and Murphy and Representative Courtney,

I am writing this letter with the express intent to goad you into doing more to prevent the emerging crisis of antibiotic resistance becoming an urgent public health catastrophe.  The most important problem preventing further progress towards ramping up our antibiotic pipeline is the broken marketplace for antibiotics. We have come to view these drugs as cheap and always available – almost like a right to cheap lifesaving medicine. We also like to take new antibiotics and reserve them for only those patients who absolutely need them in order to protect them from emerging resistance.  This is a good plan for the public health, but not so much for the marketplace. The antibiotic market no longer provides for even a reasonable return on investment in R&D for these lifesaving medicines. 

You may argue that the pharmaceutical companies make billions in profits every year and that they have an obligation to pay us back by continuing antibiotic R&D even though they won’t be able to make money in this area. But these companies are there to make a profit for their shareholders. They will follow the money.  There are exceptions. But in 1990, ALL of the large pharmaceutical companies had active antibiotic R&D programs. For those special companies who continue their efforts in antibiotic R&D, given the bleak market prospects, they could abandon their efforts at any time.  Some have even been discussing this possibility. Most companies abandoned the area years ago for a variety of reasons – but the lack of a viable marketplace was an important motivation.

Why can’t the NIH or academic centers take this on?  Because they do not have the resources – but more importantly, they do not have the expertise. It would take many years of investment and education to get our academic research centers ready to take on this task. And even then there are many roadblocks to success here.

Since you have all been involved in discussions around the regulatory changes needed to assure our pipeline of new antibiotics, I don’t need to explain the importance of the problem of antibiotic resistance and its potential threat to our aging population as well as our children and grandchildren. The GAIN Act that forced the FDA to put feasible antibiotic development pathways in place was an important step. The 21st Century Cures Act that established a pathway for antibiotics to be used in limited populations with high medical need was an even more important step and I applaud you for leading this effort.

I don’t need to point out that the O’Neill Commission (as I call it) predicted 10 million deaths worldwide from antimicrobial resistance (including TB and Malaria) by 2050 if current trends continue. The cost to society globally could be as high as $100 trillion in lost GDP.

In this crisis the US, including the state of Connecticut is not spared. Nationally, the rate of highly resistant infections like those caused by highly resistant Gram-negatives called CRE has been rising as shown in the following data collected by Achaogen.

The New England area is not spared as shown in this map.

While antimicrobial stewardship and reduction of the use of antibiotics in agriculture and animal husbandry will help, even appropriate use of antibiotics will continue to select for resistance.  It’s the inevitable result of the formula – “you use it, you lose it” for antibiotics.

Improved regulatory pathways such as those already in place and those being developed by FDA will not be the entire answer either. Why?  Because the marketplace for antibiotics is broken.  Only government can fix this problem.  Without a healthy market, companies, where antibiotic discovery and development expertise reside, will not invest.  They can’t make money here – especially when compared to areas like oncology. We have seen the result of this with the majority of large pharmaceutical companies having abandoned the area starting in 1999.

The push incentives from HHS, the Wellcome Trust and others have been very powerful in helping to fund antibiotic research and development.  But they still will not be enough.  Companies need to see a viable market at the end of their R&D road.

The fix, unfortunately, no matter how it is constructed, will involve spending taxpayer money.  The funds can come from all taxpayers, from consumers of all pharmaceuticals, or from consumers of certain drugs where generic entry might be delayed by a few months. The way this will work will depend on the approach that government chooses. 

Of course, the other way to fix the broken antibiotic market is to wait for the crisis to hit. A good example of this is the global pandemic of methicillin-resistant staphylococcal (MRSA) infection that hit starting around 1982.

 By the late 80s, pharmaceutical companies were increasing their research efforts to come up with new therapies for serious MRSA infections.  They did this because they thought they saw a market opportunity in the growing number of cases of these infections.  But it took a great deal of time for them to get something on the market. The only oral drug for the treatment of these infections, Zyvox, was approved in 1999. Cubicin, discovered in the late 80s or early 90s hit the market in 2003. How long do you want to wait for the industry to get a new therapy to market after the crisis has hit? Luckily, for MRSA we had at least one other efficacious antibiotic we could use.  But in the case of these highly resistant Gram-negative infections, our choices are limited and not very efficacious.  So how long do you want to wait?

The answer is to fix the market now – with government funding. How much would this cost?  The US share (assuming we share the burden with Europe) would probably be something like $1-2 billion per year over the next 10 years. Our share would decrease if China, Japan and other Asian nations would join us. This is a paltry amount of money compared to our national budget.

So what are you waiting for?  Are you waiting for you or one of your loved ones to encounter one of these deadly infections personally?  Are you waiting for a more politically palatable moment to act? Like you, I am not getting any younger.  And I have children and grandchildren I care about. I have worked in hospitals where I have had patients with bacterial infections for which I had little or nothing to offer. Physicians and their patients should never be put in that position. And now, you, not anyone else – but you – are tasked with fixing this. Delay just increases the risk of a situation that none of us wants to imagine.

I am ready, willing, and with a little help, able, to work with you and your staffs to construct legislation that would fix the antibiotic market. It can’t happen without you. Please help!


David Shlaes

Stonington, CT

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 . . . .