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GAIN Act: A Great First Step

October 11, 2013
With over 2 million infections - and 23,000 deaths - caused by antibiotic resistant bacteria each year in the US, everyone agrees there is an urgent need to find new, effective antibiotic therapies. One measure designed to spur such development is the Generating Antibiotics Incentives Now (GAIN) Act, signed into law last year. Given the growing threat posed by resistant bacteria, we decided to hold a workshop with leading experts about what effect the GAIN Act might have to incentivize antibiotic development.

BIO hosted a workshop at the 12th Annual BIO Investor Forum, moderated by BIO’s own Dr. Cartier Esham, featuring five expert panelists:

  • Steve Conafay, JD, Principal, The Conafay Group

  • Michael J. Eichberg, PhD, Senior Director, Alliance Management, Achaogen

  • Thomas Kapsner, CEO, Morphochem AG

  • Brad Spellberg, MD, Investigator, LA BioMed

  • Eugene Sun, MD, Executive Vice President, Research & Development, Rib-X Pharmaceuticals

Their consensus? The GAIN Act is a great first step, but more steps must still be taken to encourage antibiotic development.

The GAIN Act is a “pull” incentive, providing a payout at the end of the development process with five years of guaranteed market exclusivity and priority FDA review for antibiotics that target qualifying pathogens. The value of this incentive can vary greatly depending on how much patent life is left on a medicine when it receives approval, because market exclusivity is separate from the IP protections granted by a patent. During the market exclusivity period, the FDA will not approve another version of the same drug, even if a drug’s patent life is expired. Conversely, if a drug still has five or more years of strong patent protections in place, the market exclusivity provided by GAIN will not be of much additional value.

The panelists agreed that there are three main areas in which development incentives can be improved:

  • “Push” incentives, such as R&D tax credits to help cover the costs of clinical trials, making R&D investments less risky

  • Regulatory reform to streamline and make more predictable the approval process

  • Reimbursement and pricing reform from CMS and other payers to better recognize the enormous clinical value that innovative antibiotics can provide to patients

Dr. Sun argued that industry needs to make the case that an antibiotic can be every bit as clinically beneficial as a treatment for melanoma. Cancer drugs are highly valued – and reimbursed – but antibiotics have come to be taken for granted in recent decades . That’s an attitude we can no longer afford.

The panelists also agreed that one of the most important things the GAIN Act has done is smooth the way for more work to be done by Congress and helping to educate members about steps that can be taken to address reimbursement reform in Medicare and Medicaid.

While the GAIN Act has been very positive, it’s clear that more needs to be done to incentivize antibiotic development.