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#BIOCEO19: We’re Out of Time to Address the Dire Market Failures in Antimicrobial Resistance

Daniel Seaton
February 12, 2019

Here’s a statistic you might not have known: an estimated 700,000 people die each year due to the growing number of infections resistant to treatment. Known as antimicrobial resistance (AMR), this “silent killer” and looming public health threat has severe social and economic consequences that could have a lasting impact on families, individuals and communities across the globe.

Even more worrying, challenges in the commercial market for antibiotics and other products to address AMR threaten to derail the momentum of the sector, not only drying up the pipeline of AMR products, but even risking a loss of patient access to existing therapies as small manufacturers struggle just to break even in keeping their products on the market.

How best to address those commercial challenges was the topic of a spirited panel on day two of the 2019 BIO CEO and Investor Conference, Removing Commercialization Barriers for New Antimicrobial Drugs. Moderated by Dr. Gregory Frank, director of infectious disease policy at BIO, the panel included a diverse group of leaders in the AMR space:

  • Heather Behanna, Board Member, Entasis Therapeutics
  • Ciara Kennedy, PhD, President and CEO, Amplyx Pharmaceuticals, Inc.
  • Kevin Outterson, Professor and N. Neal Pike Scholar in Health and Disability Law, Boston University and Executive Director, CARB-X
  • Manos Perros, CEO, Entasis Therapeutics
  • John Johnson, CEO, Melinta Therapeutics, Inc. 

Melinta Therapeutic’s John Johnson discussed the challenges his company “We’re launching two products as we speak, we have a third product that is in year 3, so we have a front row seat at some of the challenges. And certainly neither launch curve was what the company expected, and the costs of commercialization frankly are very high… what we had to do, we announced in November not only a reduction in force, but also that in order for us to be able to proceed forward, we had to exit discovery. So we are in the process of closing our discovery facility down… If a company like us... out there in the market today driving revenue has to exit discovery, what does that mean for others down the line? It’s not good.”


He also contrasted the difficulty of gaining access to hospital formularies today compared to several decades ago, when it was a relatively simple matter for physicians to simply order whichever antibiotic was most clinically appropriate. Today, it can be an extremely complex and lengthy process to get onto a hospital formulary, often taking up to six months. And even when that hurdle has been cleared, it can often take up to a year for a hospital to get the antibiotic into their Computerized Physician Order Entry (CPOE) system.

He also theorized that hospital concerns surrounding stewardship can often really be a code-word for cost-containment, a concern that was echoed by CARB-X’s Kevin Outterson, who noted:

“One way to characterize the problem is to say that we’re paying for antibiotics like we’re paying for bedpans. It’s totally inappropriate. If a hospital gets $15,000 for a bundled case (a DRG), and they have a choice between a $100 antibiotic or a $10,000 new antibiotic, [if they choose the newer product] the hospital will be guaranteed to lose money on that patient and maybe a half-dozen others… if you look at American hospitals today, there’s far too high utilization of a very dangerous old drug, Colistin. And when you talk to infectious disease doctors, none of them will defend the use of Colistin, and yet it’s being used in American hospitals. I’d suggest it might be being used because of the cost pressure.”

The panel was in broad agreement that a two-pronged approach to addressing the commercial challenges in the space will be needed: a short-term immediate remedy or set of remedies, such as removing AMR products from bundled hospital DRGs and allowing hospitals to bill for them separately at a price more commensurate with their value. That would be the approach of the DISARM Act, sponsored by Senator Bob Casey (D-PA). Another approach, recently suggested by FDA Commissioner Scott Gottlieb, would be to move to a subscription model whereby hospitals or health plans pay a flat subscription fee for AMR products, which they may then use as needed for any patients for whom it is clinically indicated.

While those fixes may help stabilize the AMR market in the near term and prevent more companies and investors from leaving the space (or going out of business, leaving patients without access to innovative new antibiotics which cannot presently be manufactured at a break-even point), the panel agreed that “pull” incentives, such as a market-entry cash reward or a transferable exclusivity voucher (which the company could sell or apply to another product, extending that product’s time on the market before facing generic competition), given to companies which receive FDA approval for qualifying AMR products.

The panel was also in broad agreement that it’s important for the AMR stakeholder community to “sing from the same songbook” when it comes to telling policymakers what needs to be done to fix the present market failures. An important step in that effort took place last week, when a diverse set of stakeholders, including BIO, sent to key Senate Committee leaders a letter urging swift action to enact a package of incentives that would sustainably reinvigorate the pipeline of antibiotics while ensuring patient access and appropriate stewardship.

The full letter may be viewed here.