Are there methods that can be employed to ensure the commercial success of antibiotic biotech? ACSH advisor Dr. David Shlaes has his doubts.
This blog was inspired by a recent conversation with a CEO of a clinical phase antibiotic biotech. Among other things, we pursued a discussion of various strategies that companies developing antibiotics might pursue to avoid post-approval bankruptcy (the “no good deed shall go unpunished” avoidance strategy).
Have a portfolio of antibiotics covering various groups of pathogens – all where there is medical need. This could include an orally available drug active against resistant Gram positives, an oral plus IV drug active against resistant urinary pathogens, an IV only drug active against hospital acquired pneumonia, etc. The problem with this strategy is the existing, (relatively) inexpensive and diverse antibiotic armamentarium combined with the relatively small number of patients with high medical need. Caveat - a large PhRMA that needs additional products for a limited hospital sales force might be interested in such a portfolio - post-launch (e.g. Pfizer and the AZ antibiotics).
Market your antibiotics as drugs for rare diseases and garner a very high price per course of therapy. This strategy will smack into the wall of hospital budgets, the history of antibiotic commercialization globally and the general under-valuation of antibiotics.
What if you offered the possibility of empiric in-hospital IV therapy that included not only all other resistant Gram-negative pathogens (like metallo-B-lactamase producers and Pseudomonas) but also highly resistant Acinetobacter? Would that be enough to provide a return on your investment? I’m not sure given the low numbers of highly resistant Acinetobacter infections encountered by physicians.
How about if you balance your antibiotic portfolio with drugs targeting other diseases? But then what priority would your antibiotic projects garner? Why would you need an antibiotic portfolio at all?
Sorry. These strategies all seem to me like bridges to nowhere. . .
To all you antibiotic biotech CEOs out there, I only see a single strategy that will work. We must provide a market incentive for the approval and commercialization of needed new antibiotics that is of such size that large PhRMA will once again pursue these drugs and the small companies that develop them. I just don’t see any other choice that will incentivize private investment and provide a welcoming environment for antibiotic R&D once again.
Not only that, but I only see a single choice in terms of a country or region that could provide such an incentive – the good old US of A! Europe has the resources as a region with a population of 500 million and a GDP of $19 trillion (in 2019). But it has demonstrated that it does not have the competence to provide a unified strategy across all 27 national authorities. Not only that, but the judgement of the European Medicines Agency has also been brought into question with the decision of two antibiotic biotechs not to market their products in Europe because EMA’s regulatory requirements exceeded the market value of the projects under discussion.
This leaves us with the US with its GDP or $21 trillion. Total spending on healthcare in the US is estimated to be $3.8 trillion (2019 numbers). US government spending on healthcare approaches $2 trillion. So, an incentive approaching $4 billion for up to 2 new and needed antibiotics per year would be a rounding error in our national budget. But, whether we like it or not, something like this is the only way forward to assure that we have an adequate antibiotic pipeline for today and for tomorrow. Without this, antibiotic biotechs are doomed to financial failure sometime in the several years following product launch. As more antibiotic biotechs fail in this manner, the limited investment that still exists for antibiotic R&D will completely disappear.
The AMR Action Fund, now over $1 billion, is dedicated to driving deserving antibiotic projects through late stage, expensive, clinical development to regulatory approval. When the fund was announced, the sponsors warned that their effort was merely a holding strategy and that market incentives would be required to support a sustainable antibiotic pipeline. I can only laud their effort and echo their warning. I don’t see any other viable strategy . . . .