Step­ping in­to the pric­ing de­bate, FDA chief Scott Got­tlieb pro­pos­es new re­im­burse­ment idea for an­tibi­otics

Scott Got­tlieb

In an at­tempt to make good on its promise to tack­le the su­per­bug prob­lem, the FDA trot­ted out a new idea to­day that it hopes will ad­dress the re­im­burse­ment catch-22 in­her­ent in the in­dus­try. Their idea? Treat drugs like soft­ware, hav­ing hos­pi­tals buy li­cens­es to an­tibi­otics in­stead of re­im­burs­ing on a per-use ba­sis.

Let’s set aside, for the mo­ment, that pric­ing is typ­i­cal­ly not a top­ic the FDA likes to weigh in on. Af­ter all, drug pric­ing is not un­der FDA’s di­rect purview and would re­quire some in­ter-agency col­lab­o­ra­tion with the likes of CMS. But wor­ries around the pace of in­no­va­tion in an­tibi­otics and oth­er an­timi­cro­bial drugs ap­pear to be dri­ving the FDA to ac­tion.

Brent Ahrens

In the agency’s state­ment Tues­day, FDA com­mis­sion­er Scott Got­tlieb ar­gued that the cur­rent drug re­im­burse­ment mod­el isn’t con­ducive to an­tibi­otics R&D. The more an­tibi­otics a physi­cian pre­scribes, the more mon­ey the drug­mak­er earns. But that’s a prob­lem con­sid­er­ing a grow­ing ef­fort to scale back the use of an­timi­cro­bials.

“When such drugs be­come avail­able, we try to use them spar­ing­ly, lest pathogens be­come over-ex­posed to a new mech­a­nism of at­tack and de­vel­op re­sis­tance to it,” Got­tlieb wrote. “So, providers have im­posed un­der­stand­able re­stric­tions on the use of such drugs. While this rep­re­sents re­spon­si­ble stew­ard­ship, it al­so means that a nov­el an­tibi­ot­ic may have a very lim­it­ed mar­ket. If prod­uct de­vel­op­ers know that they will not be able to re­coup their in­vest­ments, there may be re­duced in­cen­tive to in­vest the sig­nif­i­cant mon­ey need­ed to dis­cov­er and de­vel­op such a drug.”

Brent Ahrens, a Canaan part­ner with a long his­to­ry back­ing an­tibi­otics mak­ers like Iterum and Du­ra­ta, said so-called “ef­fec­tive stew­ard­ship” of these drugs is se­ri­ous­ly af­fect­ing ROI in this field.

“If one were to look at the launch­es of the last sev­er­al an­tibi­otics — or some of the ac­qui­si­tions done — very few have done well over the past 15 years,” Ahrens said. “All of that is re­lat­ed to stew­ard­ship and the price point. The in­cen­tive for us to do this just falls apart.”

Jeff Stein

Un­der the FDA’s new idea for re­im­burse­ment, hos­pi­tals and oth­er care fa­cil­i­ties could be re­im­bursed for li­cens­es to an­timi­cro­bials rather than a per-use ba­sis. With­in this mod­el, the hos­pi­tal sys­tems would pay a fixed li­cens­ing fee for ac­cess to the drug, which would of­fer them the right to use a cer­tain num­ber of an­nu­al dos­es.

“This is sim­i­lar to the way that soft­ware of­ten gets re­im­bursed, where in­sti­tu­tions pay a li­cens­ing fee for a fixed num­ber of in­stal­la­tions,” Got­tlieb’s state­ment reads. “We have been speak­ing with our coun­ter­parts at CMS as to whether such an ap­proach is fea­si­ble, whether it can be for­mu­lat­ed as a demon­stra­tion, and as a demon­stra­tion, whether it would have the in­tend­ed pub­lic health ben­e­fits.”

The FDA hopes that such a mod­el would pro­vide a pre­dictable re­turn on in­vest­ment and rev­enue stream for drug­mak­ers. It would al­so put the in­sti­tu­tions ful­ly in charge of stew­ard­ship of the meds.

Jeff Stein, the CEO and pres­i­dent of clin­i­cal-stage an­tibi­otics mak­er Cidara, tells me it’s en­cour­ag­ing to see the FDA tack­le the prob­lem, but he does won­der if the idea would work for hos­pi­tals.

“The ques­tion is — would hos­pi­tals em­brace it?” Stein said. “Will they be will­ing to pay for a drug up­front for a lim­it­ed num­ber of pa­tients?”

Ahrens said he’s al­so skep­ti­cal about how that would play out.

“Hos­pi­tals are re­luc­tant to pay for any­thing — un­der­stand­ably so — and it’s chal­leng­ing get­ting new prod­ucts in a hos­pi­tal,” Ahrens said. Pay­ing a larg­er sum up­front — when there are low-cost op­tions al­ready avail­able — may be a tough sell to acute care fa­cil­i­ties.

Still, both Ahrens and Stein are hap­py to see the FDA take on the re­im­burse­ment chal­lenge, as both con­sid­er it the biggest is­sue fac­ing the space. In­cen­tive pro­grams like QIDP and oth­ers stem­ming from the GAIN act have helped to fu­el in­no­va­tion in the in­dus­try over the past few years, but if com­pa­nies — and in­vestors — don’t get paid for their ef­forts, the space could slow its ef­forts, they said.

“I’d hate to see a cycli­cal ef­fect,” Ahrens said. “But with­out bet­ter re­im­burse­ment, there just won’t be a lot of new de­vel­op­ment.”

Martin Shkreli [via Getty]

Pris­on­er #87850-053 does not get to add drug de­vel­op­er to his list of cred­its

Just days after Retrophin shed its last ties to founder Martin Shkreli, the biotech is reporting that the lead drug he co-invented flopped in a pivotal trial. Fosmetpantotenate flunked both the primary and key secondary endpoints in a placebo-controlled trial for a rare disease called pantothenate kinase-associated neurodegeneration, or PKAN.

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We­bi­nar: Re­al World End­points — the brave new world com­ing in build­ing fran­chise ther­a­pies

Several biopharma companies have been working on expanding drug labels through the use of real world endpoints, combing through the data to find evidence of a drug’s efficacy for particular indications. But we’ve just begun. Real World Evidence is becoming an important part of every clinical development plan, in the soup-through-nuts approach used in building franchises.

I’ve recruited a panel of 3 top experts in the field — the first in a series of premium webinars — to look at the practical realities governing what can be done today, and where this is headed over the next few years, at the prodding of the FDA.

ZHEN SU — Merck Serono’s Senior Vice President and Global Head of Oncology
ELLIOTT LEVY — Amgen’s Senior Vice President of Global Development
CHRIS BOSHOFF — Pfizer Oncology’s Chief Development Officer

A premium subscription to Endpoints News is required to attend this webinar. Please upgrade to either an Insider or Enterprise plan for access. Already have Endpoints Premium? Please sign-in below. You can contact our Subscriptions team at help@endpointsnews.com with any issues.

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Brian Kaspar. AveXis via Twitter

AveX­is sci­en­tif­ic founder fires back at No­var­tis CEO Vas Narasimhan, 'cat­e­gor­i­cal­ly de­nies any wrong­do­ing'

Brian Kaspar’s head was among the first to roll at Novartis after company execs became aware of the fact that manipulated data had been included in its application for Zolgensma, now the world’s most expensive therapy.

But in his first public response, the scientific founder at AveXis — acquired by Novartis for $8.7 billion — is firing back. And he says that not only was he not involved in any wrongdoing, he’s ready to defend his name as needed.

I reached out to Brian Kaspar after Novartis put out word that he and his brother Allen had been axed in mid-May, two months after the company became aware of the allegations related to manipulated data. His response came back through his attorneys.

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Why would Am­gen want to buy Alex­ion? An­a­lysts call hot­ly ru­mored takeover un­like­ly, but seize the mo­ment

A rumor that Amgen is closing in on buyout deal for Alexion has sparked a guessing game on just what kind of M&A strategy Amgen is pursuing and how much Alexion is worth.

Mizuho analyst Salim Syed first lent credence to the report out of the Spanish news outlet Intereconomía, which said Amgen is bidding as much as $200 per share. While the source may be questionable, “the concept of this happening doesn’t sound too crazy to me,” he wrote.

FDA asks why No­var­tis took two months to launch for­mal in­ter­nal probe, af­ter AveX­is flagged da­ta ma­nip­u­la­tion

And the plot thickens. Novartis $NVS officials are reportedly now scrambling to explain to the FDA why it took them two months to open an internal investigation into data discrepancies for their $2.1 million gene-therapy for spinal muscular dystrophy — the world’s most expensive drug.

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Hal Barron. GSK

GSK's Hal Bar­ron her­alds their sec­ond pos­i­tive piv­otal for cru­cial an­ti-BC­MA ther­a­py, point­ing to a push for quick OKs in a crowd­ed field

Hal Barron has his second positive round of Phase III data in hand for his anti-BCMA antibody drug conjugate belantamab mafodotin (GSK2857916). And GSK’s research chief says the data paves the way for their drive in search of an FDA approval for treating multiple myeloma.

It’s hard to overestimate the importance of this drug for GSK, a cornerstone of Barron’s campaign to make a dramatic impact on the oncology market and provide some long-lost excitement for the pharma giant’s pipeline. They’re putting this BCMA program at the front of that charge — looking to lead a host of rivals all aimed at the same target.

We don’t know what the data are yet, but DREAMM-2 falls on the heels of a promising set of data delivered 5 months ago for DREAMM-1. There investigators noted that complete responses among treatment-resistant patients rose to 15% in the extra year’s worth of data to look over, with a median progression-free survival rate of 12 months, up from 7.9 months reported earlier. The median duration of response was 14.3 months.

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UP­DAT­ED: An em­bold­ened As­traZeneca splurges $95M on a pri­or­i­ty re­view vouch­er. Where do they need the FDA to hus­tle up?

AstraZeneca is in a hurry.

We learned this morning that the pharma giant — not known as a big spender, until recently — forked over $95 million to get its hands on a priority review voucher from Sobi, otherwise known as Swedish Orphan Biovitrum.

That marks another step down on price for a PRV, which allows the holder to slash 4 months off of any FDA review time.

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Bob Smith, Pfizer

Pfiz­er is mak­ing a $500M state­ment to­day: Here’s how you be­come a lead play­er in the boom­ing gene ther­a­py sec­tor

Three years ago, Pfizer anted up $150 million in cash to buy Bamboo Therapeutics in Chapel Hill, NC as it cautiously stuck a toe in the small gene therapy pool of research and development.

Company execs followed up a year later with a $100 million expansion of the manufacturing operations they picked up in that deal for the UNC spinout, which came with $495 million in milestones.

And now they’re really going for it.

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Video: Putting the AI in R&D — with Badhri Srini­vasan, Tony Wood, Rosana Kapeller, Hugo Ceule­mans, Saurabh Sa­ha and Shoibal Dat­ta

During BIO this year, I had a chance to moderate a panel among some of the top tech experts in biopharma on their real-world use of artificial intelligence in R&D. There’s been a lot said about the potential of AI, but I wanted to explore more about what some of the larger players are actually doing with this technology today, and how they see it advancing in the future. It was a fascinating exchange, which you can see here. The transcript has been edited for brevity and clarity. — John Carroll