Policy Analysis: Promoting Development of New drugs to Antimicrobial Resistant (AMR) Pathogens

Antimicrobial resistance is one of the most complex global health challenges today. The world has long ignored warnings that antibiotics and other medicines are losing their effectiveness after decades of overuse and misuse in human medicine, animal health and agriculture. Common illnesses like pneumonia, postoperative infections, diarrheal and sexually transmitted diseases, as well as the world’s largest infectious disease killers – tuberculosis (TB), HIV and malaria – are increasingly becoming untreatable because of the emergence and spread of drug resistance. Worsening antimicrobial resistance could have serious public health, economic and social implications. Rep. Jan Schakowsky (D-IL) and other democrats introduced legislation aimed at controlling drug prices, providing a prize for the introduction of a new antibiotic to market that provides activity against resistant infections or other key lifesaving characteristics.

Strengths of prize approach to incentivizing R&D for drugs to treat AMR infections

    1)  Enable greater participation from new companies

• Drug companies need a profit incentive in order to invest five to ten years of research and at least a half billion dollars into developing a new antibiotic. Hopefully, this act will encourage further research and development of these drugs, which are desperately needed to combat the antibiotic-resistant and lethal organisms that are wreaking havoc in our hospitals today.
  
• We need new antibiotics to fight infections caused by resistant bacteria. But the marketplace, the structure of the pharmaceutical industry, regulatory agencies, and difficult science are conspiring to deny us the products we need. Hence, the prize fund will encourage the development of more effective antibiotics for serious infections which have undergone resistance to the current treatment and will provide a strong endorsement of one-time payments to reward successful development of new AMR therapeutics.

     2)  Encourage participation by large pharmaceutical companies.

• Many companies in the pharma industry have abandoned antibiotic research to focus on more profitable chronic diseases such as cancer and diabetes. Larger companies seek to mitigate this risk by divesting from basic research and investing in products in late-stage clinical trials. This would help to get them back into antibiotic R&D which is the need of the hour.
  
• "Antibiotic resistance is growing, and we are fast running out of treatment options," says the WHO's assistant director-general for health Systems and innovation Dr Marie-Paule Kieny, who told reporters that the antibiotic pipeline is "practically dry. The incentivizing idea would provide a new tool to ensure that R&D responds to urgent public health needs."(1)

Limitations of incentivizing R&D for drugs to treat AMR infections

•  In Title III of the bill, the prize is defined as $2B to come from the 2018 budget and to be available for 10 years. How and from where would the country raise such a high amount from? Increase the tax? Increase the insurance cost? What about people who are healthy are not going to be the users of any of these newly developed antibiotics? The common man would be at loss if the government comes up with such proposals for raising such an enormous amount.
  
• The bill also mentions that the company has to set a “reasonable price” for the product and must at the same time give up exclusivity rights.  How does that work? Setting a maximum value for the drug thus would limit the level of R&D into the drug. And also, if they no longer control the patent on the product and they are immediately beset by generics, there is no motivation to spend money on marketing. At that point, they’re in commodity mode where their greatest expense is manufacturing and distribution.
  
• Another key gap in this proposal: sustainability of this sufficiently high amount every year for incentivizing companies and matching the pace with the growing antibiotic resistance.
  
• There are no provisions encouraging appropriate use and marketing of new antibiotics to prevent antibiotic resistance to these new antibiotics. In focusing primarily on antibiotic development, it fails to adequately address the responsible use of antibiotics. Regardless of whether it incentivizes antibiotic development, it will be for naught if no stewardship protocols are implemented to stem antibiotic resistance to newly developed antibiotics. The proposed remedy—new antibiotic development—could therefore exacerbate the very problem it was enacted to address.

Dearth/Shortage of R&D for AMR conditions

AMR destroys the fruit of prior research, making it necessary to constantly innovate to avoid falling back into a pre-antibiotic era. But investment is declining in antibiotics, driven by competition from older antibiotics, the cost and uncertainty of the development process, and limited reimbursement incentives. The research and development (R&D) pipeline for new antimicrobial therapies has been drying up due to:

Low revenues, Scientific Challenges and High Uncertainty:

• Limited public and private funding for basic microbiology research.
  
• The amount of time necessary to put a drug on the market, relatively high cost and difficulty of developing antimicrobials and demonstrating their effectiveness. Drug development in many clinical areas is expensive and risky; estimated costs across all areas range up to $1.2-$2.6 billion for novel drugs, and it takes roughly 8-10 years for market approval from initial IND filing, with an overall success rate of 10% (3).
  
• Failure of current payment systems to recognize public health benefits, pressures for appropriate stewardship, and the insufficient implementation of new diagnostics to aid identification of the right drug for the right patient at the right time all result in low revenues for antimicrobial developers, resulting in many companies leaving the antimicrobial R&D space.
  
• Small and medium companies struggle with securing funds from investors, and large manufacturers with a diversified pipeline struggle to justify investing R&D dollars in an area with an unpredictable and low return compared to other opportunities.
  
• Substantial development costs and uncertainty causes low financial rewards for bringing priority antimicrobials to market, and the potential benefits to society.

Traditional regulatory and market incentives do not work for antibiotics in today’s world

• Antibiotics do not generate as much revenue as other pharmaceuticals because they (1) are only used for short time periods, typically 7–14 days (not like the long-term therapies that help bring in revenues for companies); (2) are priced low to keep the public health free of communicable diseases; (3) overuse leads to resistance, and hence, are out of the market. This comes as no surprise considering that, “compared to the revenues generated from sales of ‘blockbuster’ high blood pressure or cholesterol medications that patients take for many years or even a lifetime, the returns from antibiotics are low.
  
• Antibiotic research and development is notoriously risky and unpredictable, some pharmaceutical companies may be incentivized to act only when they are sure they will be able to recoup all of their expenses in the marketplace. Further still, because there are some generic antibiotics that are still effective against many bacterial infections, physicians often relegate newly developed antibiotics to a second or later line of defense against these pathogens.
• In recent years, new antibiotics have struggled to reach the market due to difficulties in demonstrating efficacy or they have had unacceptable side effects. In addition, in order to gain a license, new antibacterial will have to demonstrate they are not inferior to existing drugs where the comparator is available generically. “This makes establishing a market share difficult.”

      Criteria for defining a new drug as worthy of receiving the prize: 

      Meaningful incentives should be heavily weighted to the most urgent threats and therapies with the greatest added benefits. Prize Incentive approach could look into ranking antibiotic resistant organisms to direct future research and development by requiring detailed identification and integration of extensive information that defines the burden of antimicrobial resistance. Some of the factors which could help identify drug as worthy of the prize are:Resistance reported to all current drugs recommended for empirical monotherapy. E.g.: gonorrhea, a sexually transmitted disease contracted by more than 100 million people a year: used to be easily treatable but has now developed superbug strains that are drug-resistant and is spreading unchecked.

• Based on the number of patients that would benefit from the new drug.Prioritization of pathogens according to the severity of the infection it threats: critical, high, medium. The effectiveness of the remaining available treatments for the infection is still being debated.
  
• Whether the qualifying product treats, or has the potential to treat, a serious or life-threatening bacterial infection for which no other treatment is currently available or for which there is a high threat of resistance to existing treatments. Limited treatment options nearing resistance soon.
  
• Immensely high capacity to spread within the hospital and to colonize environmental surfaces.
  
• The transmissibility of the bacterial infection the qualifying product would treat, and barriers to prevention of that infection.

Funding of the prize:

Tax to be imposed on antibiotics used on animals: 

Governments often use taxes that target particular products, to raise revenue. In broad terms, it is possible that the case for a tax on animal use of antibiotics will look more compelling than one for human use. Pros: Resistance is enhanced by the use of antibiotics to promote animal growth and prevent disease in crowded factories and farm. The idea here is that increasing the cost of antibiotics for animal use may discourage unnecessary use and encourage better animal stewardship practices., without compromising animal health or food security. Cons: And any such tax would almost certainly raise food prices. In addition to this, how would the regulators distinguish between a farmer feeding livestock daily with low levels of antibiotics to prevent disease or to promote growth?

‘Pay or play’ tax on pharmaceutical firms that do not invest in antibiotic R&D: 

Given the reliance of so many procedures and treatments on
 the availability of effective antibiotics, it makes sense that the pharmaceutical industry as a whole could help contribute to
 the development of new treatments. It is therefore recommended to incorporate the option that companies can either ‘pay’ the charge, or demonstrate that they are investing the equivalent amount or more into
 R&D relevant to AMR. Such a system, called a
‘pay or play’ funding scheme, would give companies a strong incentive to resume, strengthen or start antimicrobial discovery projects (Pros). Combined with improved commercial rewards such as market entry rewards for example, this option has the potential to radically strengthen talent and stimulate R&D activities in the field. Cons: consideration should be given to the viability of the mechanism to ensure that it could be established in a way which is practical, fair and effective. The willingness, desire and readiness of doing R&D on its own compared to forced mandatory play/pay tax would definitely not be the same.

Tax on public and private insurers: 

Pros: Tax subsidies for private health insurance continue to cause increased demand for health services, which in turn result in higher prices, over insurance, excess demand for medical care, overuse causing AMR, and to rapid expenditure growth in the medical care sector. Taxing them would take care of this problem(4). Insurers would pay the companies a certain amount per-member and per-month to ensure that all their members have access to the new antibiotic, and hence, they would be encouraged to promote prudent use of the drug so that it remains effective. Cons: High premiums, high deductibles as the insurance company would not be able to shoulder this tax burden and pass it down at the consumers level.

The patent and market exclusivity rights to be kept with the pharmaceutical company:

Following reasons support pharmaceutical company in terms of keeping their patents and exclusivity rights:   

• Drug companies invest five to ten years of dedicated hard work into research and at least a billion dollars into developing a new antibiotic and all development risk is borne by developer.
  
• Developer can recoup R&D costs that may not have been covered by the incentive prize money.
  
• Monopoly prices can reduce inappropriate use of antibiotics compared to generics by keeping it only for severe infections, and thus prevent further AMR.
  
• A persistent patent could place the responsibility of an antibiotic’s long-term sustainability with developer which would help delay AMR due to over production and hence overuse.

The hope would be to stimulate the R&D of new antibiotics by pharmaceutical companies due to the fact that current polices have been largely inadequate. The arms race is, and will always be, an on-going battle with bacteria that are continuously evolving due to selective pressure to develop resistance to the antibiotic du jour. We can only hope to stay ahead with our pursuit of new antibiotics. Staying ahead of resistant bacteria will take all our know-how, natural products, semi-synthetic chemistry and creativity in de novo drug design.

Reference:

• http://www.who.int/mediacentre/news/releases/2017/bacteria-antibiotics-needed/en/

• https://healthpolicy.duke.edu/sites/default/files/atoms/files/valuebased_strategies_for_encouraging_new_development_of_antimicrobial_drugs.pdf 
  
• https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4191128/
  
• https://www.ncbi.nlm.nih.gov/pubmed/10282727