Legal, BioPharma

Can we warp-speed antibiotic development? 

Advocates, industry leaders and legislators have come to a consensus about the scope and urgency of the crisis related to inadequate development of antibiotics. They are calling for legislative fixes to protect public health.

While doctors scramble to understand the viral illness Covid-19, bacteria pose no small threat, especially given increasing antibiotic resistance and prevalence of superbugs. 

Medical centers rely on antibiotics to treat everything from post-surgical infection to Covid-related pneumonia that sends patients into septic shock. At the same time, overtaxed physicians are unable to practice the antibiotic stewardship that was bringing down resistance before the Covid pandemic.

Now, advocates, industry leaders and legislators have come to a consensus about the scope and urgency of the crisis. They have been working together to address it under wide-ranging federal guidance issued in March 2015, titled the “U.S. National Action Plan for Combating Antibiotic-Resistant Bacteria.” 

The National Academies of Science, Engineering and Medicine recently held its third meeting to assess federal progress under that guidance, taking place in open session online from January 5-8.

According to experts, misaligned market incentives related to development of antibiotics mean that necessary pharmacological innovations are deemed irrational investments. That means the burden is on the government to invest in these initiatives for the sake of public health. 

“Antibiotics are the fire extinguishers of medicine: we don’t want to use them all the time but are happy we have them,” Chief Medical Officer of F2G Ltd. Dr. John Rex told meeting attendees.

He continued by quoting his colleague, Boston University law professor Kevin Outterson: “We currently pay for them as if we were paying the fire department on a per-fire basis. We need to invest in the department to be ready for the fire, when it comes.”

Given that a congressional charter from 1863 gives them the authority to advise the federal government on scientific and technical matters, the Academies’ report on these proceedings will have influence over the government’s next steps on antimicrobial resistance — and whether proposed fixes make it into future Covid relief packages.

Creating Incentives

Rex and Outterson are part of a broad team of legislators, academics, doctors, patient advocates, industry leaders and policy researchers banding together in an unprecedented united front to create both “push” (investment) and “pull” (purchase) incentives for innovation to fight antimicrobial resistance.

This coalition agrees that the “push” for research and development of new drugs is well-addressed through current initiatives that provide grants to qualifying companies. Early-stage and phase one investigations receive support from CARB-X, a nonprofit R&D accelerator that Outterson founded, and Novo’s REPAIR Impact Fund. The recently formed AMR Action Fund recently promised $1 billion in support through phases two and three and “support the collapsing antibiotic pipeline.”

However, reimbursement is an uphill battle for those developing antibiotics. Despite recent action by the Centers for Medicare and Medicaid Services (CMS) to correct repayment issues that render existing legislation more a hindrance, multiple speakers argued to the Academies on Tuesday and Wednesday that much more must be done.

Market failures in the healthcare system prevent companies from innovating around antimicrobial resistance, because investment is linked with volume, not societal and clinical benefit.

The constellation of actors fighting antimicrobial resistance seek support for two legislative fixes: the DISARM (Developing an Innovative Strategy for Antimicrobial Resistant Microorganisms)  Act and the PASTEUR (Pioneering Antimicrobial Subscriptions to End Upsurging Resistance) Act. Together, the two support higher reimbursement rates and bulk purchasing of novel antibiotics. 

The DISARM Act — introduced by Sens. Johnny Isakson (R-Ga.) and Robert Casey (D-Pa.) in June 2019 — seeks to increase hospital reimbursement for antibiotics. It enables Medicare — America’s single largest reimburser — to offer add-on payments to hospitals that use a qualifying antibiotic to treat a serious or life-threatening infection. 

It also removes the reimbursement challenges created by the diagnosis-related group (DRG) reimbursement classification system, which sets a fixed, bundled Medicare payment for in-patient services. Given this bundling, there is incentive for the hospital to use the least expensive antibiotic available because they will not be reimbursed above a ceiling set for treatment of the primary diagnosis.

“Take the example of the patient with a heart attack, who gets an infection during open heart surgery,” said Kevin Krause, vice president of clinical sciences and development operations for AN2 Therapeutics, in a phone interview. “Antibiotics the hospital gives them to address the infection are reimbursed as an expense under the hospital’s budget for congestive heart failure.”

Krause went on to explain that this same issue hinders reimbursement for appropriate microbial testing to assess what a patient is infected with, so they can be matched with the appropriate antibiotic. “Coincidentally,” he said, “these costs are also bundled in the microbiology laboratory, so we’re hitting two places in the hospital from a reimbursement perspective.”

However, given the fact that hospital reimbursement for drugs is done on the basis of per patient per day — and that hospitals often give patients less than a full 10-day run of an expensive antibiotic where possible — Krause said it is impossible to know whether DISARM would be enough to support a healthy antibiotic development market. This is where, advocates say, the PASTEUR Act comes in.

A ‘Safety Issue’ 

U.S. Sens. Michael Bennet (D-Colo.) and Todd Young (R-Ind.) introduced the PASTEUR Act on on September 30 to encourage innovative drug development targeting the most threatening infections, improve the appropriate use of antibiotics, and ensure the United States would have enough of our most-needed antibiotics on-hand at all times.

“We are living through the worst pandemic in a century, and infectious disease experts are sounding the alarm that drug-resistant bacteria will lead to another public health crisis,” Bennet said upon introduction of the bill. 

Rex calls the bill’s pull incentive a “Netflix model,” wherein the U.S. government subscribes to have the right to obtain those antibiotics funded through it that receive FDA approval and pays the subscription rate whether they use it or not. This lessens the risk of developing high-cost antibiotics.

According to Outterson, this is also good public health. “What this means is that there won’t be any pressure to sell a lot of the antibiotic; it’s OK if we hold it in reserve, which is good stewardship and is exactly what doctors want to do.”

The two bills are “complements to each other, not rival ideas,” Outterson said. “PASTEUR will only apply to the small number of antibiotics, really exceptionally high quality ones, and DISARM covers the rest of them. So you can think of DISARM as a modest boost to the revenue of all antibiotics and PASTEUR being a rocket fuel to the very best ones.”

This has significant implications for in-house counsel at hospitals. 

“The danger for counsel is that a hospital could be using older, more dangerous antibiotics instead of the newer ones because of complicated billing rules and incentives that are pushing against the new ones,” Outterson said. “At the very least, it’s a patient safety issue.”