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CAPITOL PERSPECTIVES Meeting The Antibiotic Pipeline Challenge "For a long time, there have been newspaper stories and that the newer, more effective drugs will be overutilized, covers of magazines that talked about 'The end of anti- and the bacteria will form resistance to these lifesavers. biotics, question mark?' Well, now I would say you can The CDC report Antibiotic Resistance Threats in the U.S. change the title to 'The end of antibiotics, period.' We're 2013 notes that more than two million people are sickhere. We're in the post-antibiotic era. There are patients ened every year with antibiotic resistant infections, with at for whom we have no therapy, and we are literally in a least 23,000 dying as a result. Almost 250,000 people are position of having a patient in a bed who has an infection, hospitalized for Clostridium difficile infections, where the something that five years ago even we could have treated, use of antibiotics was a major factor leading to the illness. but now we can't." Yet in the face of this unmet medical need, pharmaceuThis is the recent scary report from Dr. Arjun Srinivasan, tical manufacturers are bailing out and not meeting the the associate director at the CDC, told to PBS' Frontline. challenge of drug-resistant bacteria. Brad Spellberg, proIt's truly incredible we have reached this point, but it's fessor at UCLA and author of Rising Plague: The Global been validated by many other sources. Threat from Deadly Bacteria and Our Dwindling Arsenal Sally Davies, the chief medical officer for England has to Fight Them, commented, "We have what has been accusaid, "There is a broken market model for rately termed on Capitol Hill a market failure making new antibiotics, so it's an empty pipeof antibiotics. The traditional capitalistic marline," and Dr. Margaret Chan, the directorket has not supported antibiotic trials. It has general of WHO, announced that the "R&D; collapsed." pipeline for new antimicrobials has practically "The market for new antibiotics is very small, run dry. In the absence of urgent corrective the rewards are not there, and so the capital and protective actions, the world is heading is not flowing," commented Paul Stoffels, toward a post-antibiotic era." the head of pharmaceuticals for Johnson & These health leaders are right — multidrugJohnson. "In cancer, people pay $30,000, John McManus, resistant bacteria are killing tens of thousands $50,000, or $80,000 for a drug, but for an The McManus Group of people every day, while major pharmaceuantibiotic it is likely to be only a few hundred jmcmanus@mcmanusgrp.com dollars." tical interests have exited the business. The Infectious Diseases Society of America reports Last year, Congress responded by enacting that the FDA has approved just two antibiotics in the past the GAIN (Generating Antibiotic Incentives Now) Act, two years compared to 16 between 1983 and 1987. And which expedites the approval of antibiotics by providing even these two products were not meant to combat the applications with priority review and additional nonpatent most pressing pathogens, gram-negative bacteria that are exclusivity rights. Yet that legislation does not address the resistant to most existing therapeutics. fundamental economic challenges in marketing and commercializing novel products in this area. FEW FINANCIAL REWARDS = LESS INNOVATION One such challenge is how Medicare reimburses hospitals It's not difficult to speculate why companies such as for antibiotics. Hospitals are reimbursed a predetermined Bristol-Myers Squibb and Pfizer have quit investing in this amount per discharge, based on a patient's diagnosis and sector. Maintenance drugs for chronic conditions that procedures, known as Medicare Severity Diagnosis-Related require months or even years of therapy can result in sub- Groups (DRGs). As new technologies are introduced, stantial returns to a pharmaceutical company. Antibiotics DRGs can be recalibrated to reflect increased costs, but must be used for only a brief duration and on a limited that requires time and significant volume use of that basis, and providers still reserve the most novel products technology — two factors absent from the novel antimifor last-resort-use-only. crobial marketplace. The present DRG system means that Public health advocates, hospitals, and others encour- purchase of such products is a financial loser for hospitals. age a fail-first approach with older medications such as Scott Gottleib, an economist at the American Enterprise vancomycin and penicillin before newer, more powerful Institute and former senior FDA official, has suggestantimicrobial agents are applied. There is a legitimate fear ed focusing on reforming the New Technology Add-on 10 LifeScienceLeader.com December 2013