29 July 2020

Article by Ed Currie

On 9 July 2020, there was welcome news on the antimicrobial resistance (AMR) front, with the announcement of $1 billion funding by the AMR Action Fund (link here) to bring 2-4 new antibiotics to market this decade to tackle multi-drug resistant (MDR) bacteria.
While applauding this new initiative, tranScrip is concerned that this does not solve the problem of what happens to those new drugs. We would echo the words of John Rex in his AMR Solutions newsletter following the announcement (link here), “…at present the most likely outcome for an approved product is bankruptcy for the developer and limited or no access to the drug for all of us.”
One solution being proposed is the creation of sales-delinked innovation rewards (“Pull incentives”) for antibiotic developers. A possible downside of this approach is distortion of the way that Pharma companies traditionally get recompensed for innovation.
The problem is that serious infections due to MDR bacteria have become niched by (correct) antibiotic stewardship to become rare diseases, while the regulatory and pricing frameworks for antibiotics have not changed to reflect this.

Stewardship was put in place to try to control the increase in MDR pathogens and the rise of resistance to the newer agents by not exposing bacteria unnecessarily to them. Correct stewardship should allow very early use of newer agents if they are required. However, these newer agents will in practice rarely be used, leaving manufacturers with all the development costs of bringing a new drug to market, but minimal sales.
We already have mechanisms in place for rewarding companies for effective innovation in rare diseases in other therapeutic areas – orphan drug designation (ODD) and the ability to price for rare conditions. This has stimulated huge innovation and no shortage of pharmaceutical companies eager to be involved, with overall sales levels that stimulate further investment.
The possible use of ODD for antibiotics has been discussed for some time. This short article from 2016 outlines some of the considerations.
Regarding rare disease pricing, we already have a few infectious disease examples: within cystic fibrosis (CF), itself a rare condition, inhaled formulations of amikacin, tobramycin and aztreonam are priced in excess of $3’000/month; and for hepatitis C, Sovaldi and similar treatments are even more expensive (but seen as cost effective due to their ability to cure the infection). However, to date, new antibiotics developed to tackle drug-resistant bacteria are not able to be priced (due to a pricing precedent set by a generic marketplace) to reflect the rarity of their use.
Another point in favour of super-premium pricing for MDR-busting antibiotics is that, unlike the majority of oncology drugs that have modest effects on long-term outcomes, antibiotics have the potential to cure patients in days/weeks. Anyone who has lost a friend or relative due to a drug-resistant infection can appreciate this. This means that, except in a few cases like cystic fibrosis, antibiotics are not lifetime treatments. Pricing therefore needs to reflect this shorter treatment “window” for antibiotics to work their magic.
One further complication is the well-established HEOR phenomenon that as a society we place the greatest value (rightly or not) on end-of-life treatment. That is why we (through healthcare payors) are prepared to extend the life of a lung cancer patient by 6 months at a significant cost but are not ready to save a life of someone with pneumonia, even for a fraction of that cost. Pricing antibiotics at much higher levels because of their ability to save lives might still lead to them being shelved and unused, unless we see a shift in the way we, as society, see their value. 
Thus, the optimal approach might be a combination of sales-delinked rewards, at least in the short-term, together with the designation of antibiotics for MDR infections as orphan drugs with pricing high enough to incentivize developers, with concerted efforts to address the perception challenge.
We would love to hear your comments on this. Do you agree/disagree? What do you think is the best approach to tackling AMR?