In a recent piece for Bloomberg, reporter Robert Langreth paints a harrowing picture of the quickly deteriorating antibiotics market and calls attention to the challenging ecosystem biopharmaceutical innovators and investors are having to deal with – or increasingly, moving away from altogether:
“The business model, the way we reimburse and pay for antibiotics, has just fundamentally crashed,” said Kevin Outterson, a Boston University law professor who has studied market failures in the antibiotics area. The government needs to act in three to six months to improve the reimbursement for hospital antibiotics or the U.S. may lose even more capacity to develop new bacteria-fighting drugs, he said.
If Outterson’s warning sounds alarming, it should. Large biopharmaceutical companies are engaging less in antimicrobial R&D and smaller biotechs face great difficulty securing private investment to support efforts in infectious diseases given this dire market uncertainty. One company has already filed for bankruptcy this year.
In his piece, Langreth highlights several small antimicrobial companies that, just a few years ago, were worth between $1-2 billion (after having spent several hundred million dollars on R&D to get their products approved), and today are either bankrupt or have market caps of under $40 million, illustrating just how challenging the marketplace is for these companies and their investors.
Action is urgently needed to prevent more companies from failing or exiting the antibiotic space. Earlier this month, U.S. Senators Bob Casey (D-PA) and Johnny Isakson (R-GA) introduced the Developing an Innovative Strategy for Antimicrobial Resistant Microorganisms Act of 2019, or the DISARM Act for short, to help advance research and new treatments for drug-resistant infections. As Langreth explains:
“[The] bill introduced in the Senate … would allow the government’s Medicare program for seniors to offer additional reimbursements to hospitals that use certain antibiotics to treat a serious or life-threatening infection. The measure is backed by the Infectious Diseases Society of America, which calls it “urgently needed.”
While the DISARM Act would help address underlying challenges facing the antibiotic market, more dramatic measures, such as a large pull incentive will ultimately be required if we want to ensure the level of innovation in antimicrobial products that will be necessary for the growing unmet needs in the area. Without such action, we face a future where a simple routine surgery could lead to a deadly infection, surrendering many of the advances in medical progress that have been made since the advent of penicillin.
Read the full piece in Bloomberg here.