How pharma economics is holding back antibiotic development


Dick Jenkins and other ‘angel’ investors have committed more than £20million to developing an experimental drug to fight life-threatening infections. But they ran into a big hurdle: a need for even more money.

“We took it over about 10 years ago, with the aim of developing it through phase 1 testing [in healthy volunteers], then sell it to someone with deeper pockets,” says Jenkins. “Alas to say, there was no market to pass it on to.”

Researchers at MGB Biopharma, the company Jenkins helped back, believe the drug, called MGB-BP-3, has the potential to treat certain ‘Gram-positive’ antibiotic-resistant infections. However, it will take at least an additional £50million to fund further testing in patients before regulatory approval can be sought to sell the drug.

MGB-BP-3 is one of many potential treatments to combat the growing pattern of antimicrobial resistance (AMR), in which infections become resistant to existing drugs. Recent estimates suggest that these infections kill more than 1.3 million people a year worldwide. And the history of medicine highlights the need for new financial mechanisms to support innovation in the field.

With additional crowdfunding and some grants, the team managed to expand support for phase 2 testing to a small number of patients. But new money is needed to continue the work and swell the thin pipeline of new antibiotics needed to replace those that become useless.

“We got caught,” Jenkins says. “We recognized that we had a life-saving product, but the real problem we discovered was that no one would take them, because there is no economic market at the end of the process. We’ve been through the Nasdaq and the venture capital world. The message is: there is not enough money in the sale of antibiotics to justify this level of investment. »

His experience is far from unique. Few start-ups and small biotech companies are active in developing antibiotics, and many larger, better-endowed pharmaceutical groups have canceled projects as they turn to therapies in more lucrative areas, such as the cancer.

Now, however, projects by MGB Biopharma and other developers are being reviewed by the AMR Action Fund. This is a new vehicle through which pharmaceutical companies and other funders have pledged over $1 billion to bring four promising new drugs to market. A first series of awards is expected in the coming weeks.

But this support, called “push funding”, will not be enough on its own. To entice investors to become more active and persuade big companies to step up their efforts, industry leaders and policymakers are stressing the need for healthcare systems to increase rewards for successful drug development. This is called “drawdown financing”.

They are exploring new mechanisms to enable patients to administer the most appropriate drugs and decoupling payments to pharmaceutical companies from the quantity of drugs used. The aim is to avoid inappropriate prescribing and overuse of new drugs, which fuel antibiotic resistance.

Patrick Holmes, senior director of science policy at Pfizer, says, “This is one of the few areas where there is a disconnect between public health needs and business. We need stewardship to avoid pushing usage. If you don’t make revenue from the sale of prescriptions, how do you incentivize running the business? And how do you make investment in research and development a viable reality? »

Germany and Sweden are experimenting with mechanisms to increase the use and payments made for antibiotics, and the UK is expected to announce the results of an initial ‘subscription’ pilot program soon, under which companies will receive a fixed fee for new antibiotics, regardless of the volumes prescribed.

But industry leaders warn that the terms and scale of all these programs remain too modest. Holmes says that for Pfizer – whose antibiotic Zavicefta is in the UK pilot – the maximum possible government payment of £10m a year is “still not substantial enough”.

Others are looking to the progress of a larger-scale proposal in the United States to offer payments decoupled from sales, as well as more guaranteed income through new mechanisms in other countries, including Japan.

“There is no better model yet,” says Isao Teshirogi, chairman of Shionogi, the Japanese pharmaceutical company, which is also participating in the UK pilot project with its drug, Cefiderocol. He says maintaining his plant to manufacture the drug will require about $100 million in revenue per year. “The EU, Japan and the US would give us the minimum amount needed.”

He also points to the high costs of providing the standard of clinical data required by regulators to approve a new antibiotic – costs that he says could be safely reduced.

For Teshirogi, it’s her company’s sense of public responsibility that keeps her going for now, even if the financial rewards are modest. “When I became head of research and development 20 years ago, I had a long discussion with my predecessor about whether we should follow other companies and get rid of antibiotics,” he says. “We have come to the conclusion that if we go out, hardly any business in Japan will be present. As long as we are able to continue the activity, even without a big financial profit, let’s continue.

But, in the longer term, a much larger overhaul of incentives, regulation, and public health interventions will be needed to stop the continued growth of drug resistance.


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