Can we make the antibiotic market great again?
The standard for-profit model in drug development is straightforward. Spend millions, even billions, to develop a medicine from scratch. The return on investment (and ideally a tidy profit) comes via volume and/or price, depending on the disease. But the string of big pharma exits and slew of biotech bankruptcies indicate that the model is sorely flawed when it comes to antibiotics.
The industry players contributing to the arsenal of antimicrobials are fast dwindling, and the pipeline for new antibiotics is embarrassingly sparse, the WHO has warned. Drugmakers are enticed by greener pastures, compared to the long, arduous and expensive path to antibiotic approval that offers little financial gain as treatments are typically priced cheaply, and often lose potency over time as microbes grow resistant to them.
Meanwhile, doctors — often confined by hospital budgets — prefer to use older, cheaper antibiotics in their first response, reserving fresh, more targeted alternatives for acute cases.
Lance PriceDoctors should prescribe as few antibiotics as possible, except in the cases where they can really help — but biopharma companies need many patients treated to recoup their investment.
“They’re selling more of the drugs, they’re recouping at cost, but they’re also then driving up resistance to that drug,” noted Lance Price, founding director of George Washington University’s Antibiotic Resistance Action Center (ARAC), in an interview with Endpoints News.
The current framework, which largely relies on for-profit drugmakers, is therefore partly to blame for the looming superbug crisis, he said. “So if we develop new drugs, and we just put them into the same system, we know where we’re going to end up right?”
“I think we really have to take a systematic approach and just revamp the whole thing.”
A PUBLIC OPTION?
Drug-resistant infections are fast becoming the norm. Extravagant antibiotic use has resulted in the tsunami of multi-drug resistant bacteria. The WHO estimates drug-resistant bacterial, viral and fungal infections already kill 700,000 people each year. Unless action is taken, the avalanche of antimicrobial resistance (AMR) could cause 10 million deaths annually by 2050, according to the World Bank.
“If we reach that point, then we’re going to start shelling out tons of money, right?” Price, who also serves as a professor at the George Washington University’s Milken Institute School of Public Health, exclaimed. “We’re going to hit a kind of desperation, we’re going to start writing giant checks…”
“So rather than waiting till that point — why don’t we just model what happens at that point, how much it’s going to cost…and say, all right, why don’t we take a fraction of that and let’s create a whole new system for developing new drugs and make them a public good,” he suggested. “I would imagine it would come out to be cheaper that way.”
Johannes FruehaufThere may be some merit to that idea, but that means governments will be responsible for funding, noted Johannes Fruehauf, doctor, co-founder of Mission BioCapital, a seed-stage life sciences investment fund, and the Biolabs network, an incubator for US-based biotech startups.
“I actually doubt that will have the political will,” he said. “Until we have made it very clear to the everyday man how big a risk this is for him and his family — I think that’s currently not clear — I don’t think there will be enough political support for a massive effort.”
Isaac Stoner, chief of Octagon Therapeutics — a company that pivoted away from antibiotic development to autoimmune disease after encountering the pitfalls of the ‘broken’ antibiotic market, echoed his skepticism.
“When you see large, bloated, public organizations come together and try and solve the problem like that. It’s not always the most efficient way to do it,” he said. “I fundamentally believe that treating very sick people and saving lives should be good business on its own without government intervention.”
But good business it is not. Big pharma has largely retreated from antibiotics, only a handful remain in the space — including Merck and GSK — down from more than twenty in the 1980s. For one of the biggest threats to global health, the lion’s share of antibiotic development is taking place in a handful of labs of small biopharma companies as a majority of their larger counterparts focus on more lucrative endeavors.
Ted SchroederA host of small antibiotic companies that have managed to get their drugs approved haven’t had much luck staying afloat either. In recent years, antibiotic developers — including Achaogen, Tetraphase, and Melinta — have seen their value go up in smoke as feeble sales frustrated growth.
“Right now, if we don’t do something to support the small companies that have the innovative products, we run a real risk of not only companies going bankrupt — but losing the antibiotic development expertise that’s resonant within those companies, because the scientists tend to move on and do other things,” Novartis spinoff Nabriva chief Ted Schroeder told Endpoints.
LEGISLATION
In the United States, incentives are already in place to push drugmakers to develop antibiotics, such as funding support through the Biomedical Advanced Research and Development Authority (BARDA) and regulatory reforms such as the Limited Population Pathway for Antibacterial and Antifungal Drugs (LPAD) — but the industry is clamoring for the passage of “pull incentives,” or policy measures to increase the value of a marketed antibiotic by rewarding drugmakers only after their antibiotic is approved.
Seema VermaExisting incentives, “while well-intentioned…appear to have been insufficient, as they focused exclusively on bolstering the development pipeline without removing the blockage created by issues with payment,” CMS administrator Seema Verma conceded last August.
Former FDA commissioner Scott Gottlieb, in 2018, suggested a “licensing model” in which acute care institutions that prescribe antimicrobial medicines pay a fixed licensing fee for access to these drugs, granting them the right to use a certain number of annual doses.
Last year, the CMS unveiled a proposal to restructure the payment apparatus to rescue existing antibiotic manufacturers, by classifying drug resistance in a way that would compel higher payments to hospitals treating patients with antimicrobial resistance, and crafting a pathway for doctors to prescribe appropriate new antibiotics without disrupting hospital budgets. Under the current system, hospitals bundle together the costs of all the services for a given diagnosis, which tends to incentivize hospitals to prescribe cheaper, generic antibiotics that are not engineered to tackle drug-resistant infections.
The bipartisan DISARM (Developing an Innovative Strategy for Antimicrobial Resistant Microorganisms) legislation also has widespread support from the industry and other stakeholders. The bill is designed to compel reimbursement by Medicare of antibiotics that treat stubborn infections away from the bundled payment system, within which all antibiotics currently reside. “I think ultimately, that’s the best solution,” Nabriva’s Schroeder said.
Meanwhile, across the Atlantic, the United Kingdom also unveiled a key step in 2019 to resuscitate antimicrobial development by wooing manufacturers with the incentive of a ‘subscription’ style payment: the drugs will be paid for, even if they’re just stored in reserves. In 2018, a European public-private consortium also recommended instituting a market entry reward of $1 billion per antibiotic globally to resuscitate the antibiotic pipeline.
Aleks EngelThese are examples of initiatives that reward drug makers not by the volume of goods sold, but for the value they bring, which is needed; along with an injection of private funds, said Aleks Engels, director of the REPAIR impact fund.
The fund, which has invested $48 million in 8 companies so far, was created by the investment arm of Novo Nordisk’s Novo Holdings in 2018 to fund developers focused on targeting drug-resistant pathogens.
“If there is a payment of some sort, for actually getting all the way to the end delivering novel antibiotics to the public — and if that incentive is sufficiently certain and sufficiently large — then the marketplace would go back to functioning,” he said.
But Octagon’s Stoner was not convinced. These steps, while incrementally positive, don’t quite solve the issue at hand, he said.
“What we need is for there to be a market where you can go you can make your investment back plus a multiple,” he emphasized. “It might take another decade for sanity to be restored. And we’re not going to wait around for that — we quite simply can’t.”
PUZZLING PRICING
A study published in 2018 found that antibiotic resistance added $1,383 to the cost of treating a patient with a bacterial infection in the United States, which amounts to a national cost of $2.2 billion annually on the basis of the number of infections reported in 2014. Still, the US healthcare system is used to paying very little for antibiotics.
Bacterial infections can result in the loss of limbs, even brain function. “If a drug can cure that, the drug should be paid (for),” said Fruehauf, who also co-founded LabCentral, the non-profit co-working lab/incubator in Kendall Square. “If you compare that to surgical intervention or other long term care, it’s tens of thousands of dollars in the US…if you can achieve the same with a drug or two, then it ought to be acceptable that the drug is priced high.”
Isaac StonerIn 2015, when Octagon’s Stoner first met his co-founders, he thought the first $50,000 antibiotic would be soon a reality, given the rise in drug resistance rates.
When you look at rare or genetic diseases, payers deal with prices like $350,000 $850,000, Stoner said. “Why can’t we get $100,000 for an antibiotic?”
“Why is saving someone from an aggressive metastatic cancer somehow worth more than saving someone from an aggressive multidrug-resistant bacteria? I don’t understand that.”
If antibiotics were priced in line with their therapeutic value, doctors and hospitals will be forced to become more responsible prescribers, he suggested.
“This is the last resort drug…that’s going to save the patient, and is expensive enough that I’m going to think twice before throwing it around willy-nilly,” he said. “I think that is the solution, we need to see two more zeros added to the current reimbursement paradigm.”
Increasing US drug prices — even life-saving medicines — in the current pricing environment, where patients, policymakers, and politicians are up in arms against the pace and magnitude of price hikes is likely a fool’s errand. The pharmaceutical industry already holds the crown for the least favored sector by Americans, falling behind the federal government itself.
Meanwhile, lawmakers on either side of the aisle are working on legislation to lower US drug prices, but so far nobody can agree on just how to make the US health care system great again. The industry, which has long thrived in a laissez-faire pricing environment in the United States, has vehemently argued that government intervention will stifle innovation.
“It’s politically untenable — arguing right now in favor of pricing increases…quite sadly, that could do it.” Stoner said. “If I ruled the world, I would just say, okay, you know, we’re going to have novel antibiotics now reimbursed at the cost that an inpatient ICU stay costs.”
PRECISION ANTIBIOTICS
The accidental discovery of penicillin, the world’s first antibiotic, by Scottish researcher Alexander Fleming opened the floodgates in 1928, inspiring the golden age of antibiotic discovery, in which half the antibiotics in popular use today were discovered. That heady pace of discovery has since thawed — since the 1980s, there have been no new class of antibiotics approved.
Joan Butterton“The bacterial genome — it’s very small,” Joan Butterton, associate VP of clinical research, infectious diseases at Merck, told Endpoints
“So there’s only a certain number of targets that we can potentially go after — and all the easy ones have been taken. And a lot of what we do with trying to develop new drugs is come up with molecules that just work better.”
Meanwhile, the liberal use of broad-spectrum antibiotics — precipitated by the lack of time-sensitive diagnostics — can ravage the patient’s microbiome, eradicating the toxic bacteria in tandem with the healthy gatekeepers of the gut that play a vital role in pathogen resistance, nutrient acquisition and modulating the immune system.
So some antibiotic developers have taken inspiration from advances in oncology. The emergence of precision cancer drugs, tailored to fit the nuts and bolts of the patient and their strain of disease, ushered in a fresh era in the treatment of the deadly illness. Precision antibiotics — engineered to maim or kill specific bacteria — are envisioned as the next frontier in the battle against superbugs.
Manos PerrosDecades ago, the introduction of Novartis’ Gleevec thrust the targeted approach into gear and transformed the treatment of cancer. That is how the antibiotic space is evolving, Manos Perros, chief of AstraZeneca spinoff Entasis, told Endpoints.
“So we don’t see ourselves as a better chemotherapy company or the equivalent,” he said. “We see ourselves as the next CAR-T company (in the field of antibiotics) that is now looking at patient populations where the medical need is great.”
One of the Massachusetts-based company’s lead therapies is in late-stage development for a hospital pathogen called Acinetobacter, which is multi-drug resistant and is associated with high mortality rates. Akin to the CAR-T therapies, which carry premium prices for their ability to treat a subset of patients with certain forms of cancer where standard therapies haven’t kept the disease at bay, Entasis is hoping to address the 30,000 to 50,000 US patients that do not respond to standard antibiotics.
In order to do that, the company has employed a pharmacoeconomic approach in its Phase III design, where the experimental drug will be tested head-to-head against a comparator in the number of days the patient stays in the ICU or is bound to a ventilator.
Eric Kimble“We need to be able to price this drug…where we would be able to justify the return on the investment that we’ve made in this program,” Entasis’ chief commercial officer Eric Kimble argued. If the Entasis drug reigns supreme on these metrics, he said, “we can easily quantify the cost savings to an institution.”
UK-based Summit Therapeutics, whose lead program is targeting the stubborn C. diff infection, is taking the precision approach one step further.
Most recently launched antibiotics have been improved versions of regimens with existing mechanisms of action using the non-inferiority trial design, which bacteria will find a way to subvert sooner rather than later, chief Glyn Edwards told Endpoints.
Glyn Edwards“The antibiotic space has not been great… but we think we can make great again,” he said, by choosing to develop products for indications where the efficacy of standard antibiotics is wanting, and working on proving superiority in clinical trials (and not just non-inferiority) where possible and using health-economic calculations to demonstrate savings achieved by lower recurrence rate.
“I don’t think that’s any different from any other therapeutic area,” he said, asserting that if the data shows the antibiotic is better than existing treatments and reduces the rate of recurrence, doctors and hospitals will be willing to pay a premium price.
“If you can show that the hospital healthcare system will save money…even if the acquisition costs are higher, then that’s a very attractive market,” he said.
Summit’s experimental C. diff therapy, which Summit says kills specific bacteria by thwarting cell division, is in late-stage development.
“I think it’s wrong to just look at the recent product launches, and then throw your hands in the air and say you can’t make money out of this,” Edwards added. “If you do have a good product, and you show it is a better product, and it’s an area of high unmet need, and there are lots of patients — you can make a lot of money from it.”
But testing for superiority in antibiotic trials is no walk in the park. “It’s one of those things that academics like to focus on,” Schroeder of Nabriva told Endpoints.
The guidance from the FDA is to generally conduct non-inferiority trials, he said; “that is a regulatory artifact.”
But given the need to eliminate patients who are resistant to the comparator drug, it’s very difficult to do superiority trials, he argued. “The practical reality of doing drug development doesn’t usually allow for a superiority design when you have to drop patients out, because they’re likely to be non-responders based on their microbiological profile.”
“So you’re kind of stacking the deck against superiority, just because it would be unethical to treat someone with an antibiotic for an organism that was showing resistance.”
But whether precision antibiotic developers are able to find ways to prove superiority takes a backseat to the plaguing issue of diagnostics, which can take days to identify the offending pathogen. When a patient presents with symptoms of infectious disease, doctors don’t have weeks or days to decide what therapy to use.
The technology engineered to improve diagnosis timelines already exists, Entasis’ Perros said.
“If you get the kinds of drugs that would benefit from that diagnosis, there is no commercial driver for a company to develop the technology into a commercial product, and vice versa…its a chicken and egg situation,” he suggested. “But over the last couple of years that vicious cycle has been broken — there are commercial products on the market, and we’ve been working with a (diagnostic) company to run our Phase III trial.”
