Antimicrobial Resistance: What’s At Stake And What Are We Doing About It?

Editor’s Note

This post is part of a Health Affairs Forefront short series, “Prescription Drugs: Promoting Affordability And Innovation.” The posts in the series are written by participants in an invitation-only conference on drug pricing and innovation incentives hosted by Rena Conti and sponsored by Arnold Ventures and Boston University. The conference focused on a research and policy agenda to support both drug affordability and innovation and included discussion of several topics regarding drug development, access, and efficacy. The series is produced with the support of funds from the conference budget; posts are independently reviewed and edited by Health Affairs Forefront.

The COVID-19 pandemic has been a direct threat to our health and wealth. It is also a warning of the public health and economic crises awaiting if we do not address the threat of antimicrobial resistance (AMR). Nearly 700,000 deaths per year worldwide are attributed to AMR, with a potential annual loss of up to $3.4 trillion by 2030. After the conference, the comprehensive GRAM study was released in the Lancet, attributing 1.27 million deaths in 2019 to drug-resistant bacteria. In a post-antimicrobial era, today’s routine medical and surgical procedures would become a game of Russian roulette.

Resistance occurs when microorganisms undergo changes that render medicines used to treat them ineffective, leaving patients vulnerable to illness, adverse events, or death. Physicians need new drugs to treat patients with resistant infections but also need to preserve the effectiveness of existing antibiotics. There are several established contributors to resistance including agricultural misuse, environmental pollution and poor pollution controls during production, clinician overprescription of existing medicines to meet patient demand, and patient nonadherence to established treatment protocols.

Stewardship programs seek to improve patient outcomes at the organizational level by promoting the responsible use of antimicrobials; these programs use strategies such as monitoring the dose, duration, and administration route of antimicrobials to maintain their effectiveness. Stewardship efforts can also go beyond individual health care interventions to foster and monitor the judicious use of antimicrobials, addressing medical and more systemic overuse concerns.

The Challenge Of AMR

AMR presents a challenge to pharmaceutical companies engaging in new drug development: When new antimicrobials come to market, medical providers face incentives to not use them, limiting sales. Published research estimates that the average revenue generated from an antibiotic’s sale is only about $46 million per year and the median is just $16 million. This revenue is very limited in comparison to other successful products and “nowhere near the amount needed to justify the investment,” according to Kasim Kutay, chief executive of Novo Holdings, a Danish investment firm focused on the life sciences. Thus, while stewardship is the correct response for public health, it makes it hard for pharmaceutical companies to justify risky and expensive investments in the research and development of next generation antibiotics.

Over the past decade, several promising solutions to these market failures have been implemented or proposed. In 2010, the Infectious Disease Society of America (IDSA) launched the 10 x ’20 initiative, calling for the development of 10 new antibiotics by 2020. The initiative, in combination with additional activities, proved to be a numerical success: By 2020, 18 new antibacterials had been approved by the US, Japan, or European Union member countries.

However, access to these products has been a challenge. The only high-income countries that have approved for sale the majority of the 18 new antibacterials are the US, UK, and Sweden. Prospects for global access in the poorer countries around the world remain limited.

Moreover, sales remain limited. Among the 18 new antibiotics, just three of them have made more than a hundred million dollars in sales. Overall, among new antibacterials launched since January 2010, total US sales in the annual period ending June 2020 were $714.3 million collectively. This is approximately on par with sales of one new oncology product during the same time period.

Finally, most new antibacterials developed under this initiative have not been judged as sufficiently innovative by the wider scientific community. In the past decade, many established pharmaceutical company leaders have left the AMR drug development space, leaving small- and medium-size enterprises engaged in the field. The latter have smaller staffs and fewer financial resources compared to more-established companies. Among the 18 new antibacterials approved in the past decade, sponsors of four of those drugs have filed for Chapter 11 bankruptcy since April 2019 and several others have reported serious economic losses.

Here, we discuss why recent initiatives targeting new antibacterials development have fallen short. We argue that current initiatives, focused on push and pull incentives and building global partnership efforts across governments and the private sector, hold great promise to successfully combat AMR.

Encouraging Evidence That The Pipeline For Novel AMR Products Is Getting Stronger

There appears to be some cause for optimism regarding new AMR product development.

A recent review of the preclinical antibacterial pipeline identified 407 projects across 314 organizations focused on direct-acting small molecules (46 percent), antibodies and vaccines (14 percent), phages and microbiota (13 percent), potentiators (8 percent), and anti-virulence techniques (8 percent). Highlighting the encouraging and innovative nature of this work, 70 percent of these projects seek to address new targets, and nearly 40 percent target a specific agent of disease. This work is aligned with the World Health Organization’s (WHO) priority pathogens.

A review of the later-stage clinical pipeline by the Pew Charitable Trust identified 43 small-molecule antibiotics in various clinical phases of development: 15 in Phase 1 clinical trials, 13 in Phase 2, and 13 in Phase 3, with two under review by the Food and Drug Administration (FDA). Moreover, 29 of the antibiotics under development could be used to treat infections caused by drug resistant bacteria such as Gram-negative bacteria, Neisseria gonorrhoeae and Clostridioides difficile. Roughly 25 percent of the antibiotics under development are part of a novel drug class or have a novel mechanism of action, but the ultimate test is whether the drug can satisfy unmet medical needs of patients.

Nevertheless, many observers have noted that the current antibacterial pipeline should be characterized as “fragile,” thus requiring additional stakeholder attention.

Existing Initiatives Seek To Address Misaligned Incentives In AMR Therapeutic Development

In the past decade, several initiatives have emerged, aimed at developing innovative drugs to combat AMR and incentivize companies to continue investing in, or return to, these product markets. These activities combine pull incentives—the promise of additional revenues for existing products—with push incentives to encourage investment into new products.

In 2010, the US Congress created the Biomedical Advanced Research and Development Authority (BARDA) with the aim of using private and public partnerships to develop vaccines, drugs, and therapies to address medical emergencies. BARDA’s antibacterial medical countermeasure program was created to improve development via public-private partnerships targeting the preclinical, clinical, and marketing pathways. Since its inception, BARDA has invested more than $1.5 billion in antibacterials and participated in more than 28 public-private partnerships; it currently has 16 antibacterial drug candidates in various phases of development and approval.

In 2012, a new incentive was established by the US Congress’s passage of the Generating Antibiotic Incentives Now (GAIN) Act. GAIN provides an additional five years of market exclusivity for antibiotics with qualified infections disease product (QIDP) designations that treat serious infections, allowing companies to continue generating profits without worrying about generic competition. GAIN also allows expedited FDA reviews for certain drugs and required the FDA to provide updated and specific clinical trial guidance for companies.

To date, more than 100 QIDPs have been granted by the FDA. However, GAIN has been criticized for not properly linking the QIDP designation to unmet need and high product quality; critics argue that the initiative is therefore not targeted enough to incentivize the development of truly needed products. While GAIN did give companies longer exclusivity periods (a potentially valuable pull incentive), a longer expected period of poor sales remains a weak incentive for innovators.

BARDA launched the Combating Antibiotic-Resistant Bacteria Biopharmaceutical Accelerator (CARB-X) in 2016, in partnership with the Wellcome Trust (other funders now include the United Kingdom and German governments and the Bill & Melinda Gates Foundation). CARB-X addresses drug resistant bacteria with a focus on pre-clinical and early pipeline development of antibiotics, vaccines, and diagnostics. To date, CARB-X has invested $360 million to help fund 92 projects across 12 countries.

In 2019, a new pull incentive was established by the Centers for Medicare and Medicaid Services (CMS). CMS waived the “substantial clinical benefit” criteria for all QIDP designated antibacterials and allowed them to qualify for New Technology Add-On Payments. The rationale behind this change was to increase reimbursements for antibacterials used in the inpatient setting by allowing an additional payment for 2-3 years on top of existing diagnosis-related group payments and assigning them their own ICD-10 code. However, this initiative has also been criticized for being too difficult for hospitals to navigate for a relatively small amount of reimbursement. To date, these reimbursement changes have not had significant impact on the antibacterials market because they still rely on robust sales of a product we hope to use sparingly.

A better approach might be to “delink” revenues from sales volumes using a type of advanced market commitment. In this context, the advanced commitment is called a “market entry reward” if the company still retains revenues from sales or a “subscription” if the advanced payment fully substitutes for sales. In these models, innovators are guaranteed payment for a product that meets pre-specified endpoints even if the product is not used. Subscription models have been used in other contexts such as drugs used to effectively treat hepatitis C; they recently have been applied to AMR, most notably in Sweden and the United Kingdom, and proposed in the US, as described below. The Boston Consulting Group recently issued a World Economic Forum report calling for antibacterial subscriptions as their preferred solution.

In 2018, the Public Health Agency of Sweden launched a revenue guarantee program with four pharmaceutical companies, agreeing to pay a small, fixed amount per antibacterial product at the national level in exchange for improving patient access. Specifically, the pilot aimed to ensure that selected and already developed antibacterials were readily accessible and used by medical providers in Sweden when indicated for appropriate use. The amount paid is adequate to ensure access in Sweden but is far too small to be considered an innovation incentive.

In 2019, the UK National Institute for Health and Care Excellence partnered with the National Health Service (NHS) England to launch another subscription payment plan for developing novel antimicrobials. As part of this plan, the NHS will pay up to £10 million for up to 10 years for antibacterials meeting specific criteria. By December 2020, two antibiotics (cefiderocol and ceftazidime with avibactam) had been selected for contract negotiation, and they are expected to be made available under the subscription program later in 2022.

In June 2021, the Pioneering Antimicrobial Subscriptions to End Up surging Resistance (PASTEUR) Act was reintroduced in the US Congress. This bill features a 10-year subscription for a qualifying antibacterial or antifungal drug. The subscription would delink payment from volume for all US government payers, with government contracts offered that range from $750 million to $3 billion based on the clinical characteristics of the drug. The intent of the incentive is for innovator companies to develop drugs identified by the Department of Health and Human Services as meeting the greatest medical need and with novel mechanisms of structure and action to combat superbugs.

There is bipartisan support for this bill. One particularly novel aspect of PASTEUR is that it incorporates antimicrobial stewardship and reporting of antibiotic use to the Centers for Disease Control and Prevention, both of which should help prolong the lifecycle of the newly approved therapies.

Future Policy Directions To Address AMR

Drug resistance is a cautionary tale of misaligned incentives. One silver lining of the COVID-19 pandemic may be additional strengthening of the antimicrobial pipeline, as initial investments in COVID-19 therapeutics may spill over into AMR. It may also help policy makers focus on emerging threats with increased urgency and overcome political inertia.

One insight that has emerged from existing AMR work is that combating resistance will require global partnerships and continued mobilization. Fortunately, several strong initiatives and partnerships crossing national boundaries are already in place and can be built upon. For example, the US recently released its second five-year National Action Plan, and a Global Action Plan targets AMR stewardship, surveillance, innovation, and global access. The latter was formed in 2018 when the Food and Agriculture Organization of the United Nations, the WHO, and the World Organization for Animal Health teamed with the United Nations Environment Program to form Tripartite Plus.

Since then, the Tripartite Plus has worked with the UN Secretary-General to form the Global Leaders Group (GLG). The GLG’s mission is to “collaborate globally with governments, agencies, civil society and the private sector…to advise on and advocate for prioritized political actions for the mitigation of drug resistant infections through responsible and sustainable access to and use of antimicrobials.” The GLG prioritizes enhanced surveillance and monitoring, financial resources for low- and middle-income countries to develop national plans, and strengthening the clinical pipeline with more innovative antibiotics. Tripartite Plus is also creating a new global scientific body, the Independent Panel for Evidence for Action on AMR, which could have an important scientific role, akin to the Intergovernmental Panel on Climate Change.

Additional surveillance efforts have been carried out by the WHO’s Global AMR Surveillance System and the UK’s Fleming Fund. These entities have made major investments across high-, medium- and low-income countries to enable participants to collect and analyze surveillance data.

Even with this great progress, more is needed. Specifically, surveillance systems need to evolve to capture more detailed information about the patient (for example, treatments and comorbidities), the pathogen, and the source of exposure (for example, health care facility versus community). Another important area for additional investments is updated and timely clinical guidance to support medical clinicians in making better informed decisions to improve stewardship. Some clinical guidelines take years to undergo updates, leaving clinicians with an incomplete picture of the best care for their patients. Recently, the Infectious Diseases Society of America published antimicrobial resistance treatment guidelines in 2020, addressing some of the most difficult-to-treat pathogens.

Timely data on investments to address resistance would also help provide much-needed transparency into AMR initiatives for interested private companies, governments, and nonprofit organizations. The Global AMR R&D Hub tracks research and development investments to provide assistance at the country and organization level, fostering knowledge-sharing and resource allocation for AMR. The AMR Industry Alliance includes representation from biotechnology, diagnostics, generics and biopharmaceutical companies to promote development, appropriate use, and improved access to these drugs, including publication of global standards for the safer production of these drugs.

Summing Up

The antibacterial market is broken. More than a decade of incremental reforms has been helpful, but serious problems remain. Policy makers now have the opportunity to fundamentally reform the sector through delinked pull incentives such as the subscription program in the proposed PASTEUR Act. Strong support for innovation, stewardship, and access are required.

Authors’ Note

Rena M. Conti and Gaby Gracia acknowledge support from Arnold Ventures.