A coalition of more than 20 leading pharmaceutical companies today announced the launch of a new fund to provide financial incentives to boost antibiotic development efforts and help the smaller companies engaged in much of the research on new, innovative drugs to tackle antimicrobial resistance (AMR).
The AMR Action Fund will invest nearly $1 billion in smaller biotech companies with the aim of bringing two to four new antibiotics to market by 2030. The effort, an initiative of the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA), will also provide smaller companies with technical support and expertise. In addition, the companies say they will work with philanthropic organizations, development banks, and other stakeholders to strengthen and accelerate antibiotic development.
The fund is a response to the poor market conditions for new antibiotics, which compete with older, cheaper antibiotics and are used sparingly to maintain their effectiveness, resulting in poor sales. These conditions have led many large pharmaceutical companies to abandon antibiotic development altogether for more lucrative drugs, while several smaller biotech companies—which dominate the antibiotic development space—have gone bankrupt despite bringing new and novel antibiotics to market.
As a result, the pipeline for new antibiotics is weak, with few novel candidates to address the multidrug-resistant pathogens becoming more prevalent. People involved in the effort say the money will provide a temporary boost while policymakers craft solutions to address the larger economic issues hampering antibiotic development.
"The AMR fund we're building can provide part of the solution, but it's only a part," David Ricks, chairman and CEO of Eli Lilly and president of IFPMA, said in a virtual launch event. "We also need help from government policymakers, in the US and globally, because there is no viable marketplace today for a new antibiotic, and the pipeline, while supported by great science, is near collapse."
Other companies involved include Pfizer, Novartis, Johnson & Johnson, GlaxoSmithKline, and Merck.
"Currently, we are seeing too many companies active in this space failing because they can't obtain venture capital funding, or if they make it to the market, they can't make a return that allows them to continue," said Merck Chairman and CEO Ken Frazier, JD. "If we can keep just a few key antibiotics moving, and governments take the right steps to fix this broken system, together we can make tangible progress in addressing the AMR challenge."
Need for new reimbursement models
The need for governments to address market conditions for new antibiotics was a common theme of the launch event, which featured representatives of several of the pharmaceutical companies involved, along with infectious disease experts and US lawmakers. Among the speakers was Pennsylvania Sen. Bob Casey.
"Today's announcement of the AMR Action Fund is a truly important step forward in continuing to ensure a strong pipeline of new antibiotics," Casey said. "What we really need to think about next is how to create a stable marketplace for these antibiotics once they are approved."
Casey is the lead Democratic sponsor of the DISARM (Developing an Innovative Strategy for Antimicrobial Resistant Microorganisms) Act, which aims to create higher Medicare reimbursement for new antibiotics while also requiring hospitals to use the drugs appropriately.
Higher hospital reimbursement is just one of the pull incentives proposed to help boost the financial return for new antibiotics and stimulate private investment. The consensus among most antibiotic development experts is that new reimbursement models and other financial incentives are needed to sustain antibiotic development.
"Creating more investment opportunities for therapeutic advances in this space I think is going to require us to rethink the R&D [research and development] model," said former Food and Drug Administration Commissioner Scott Gottlieb, MD, who led a panel discussion at the event. "Ultimately, we need to change the reimbursement model."
The issue has become critical for small and midsize pharmaceutical and biotech companies, which account for 95% of the antibiotics in development, according to a recent analysis of the pipeline by the Pew Charitable Trusts. Nearly 75% of these companies have no current product on the market, and developing an antibiotic that remains on the shelf isn't financially feasible for them.
Kevin Outterson, JD, executive director of CARB-X (the Combating Antibiotic-Resistant Bacteria Biopharmaceutical Accelerator), a public-private partnership that provides funding for companies in the preclinical stages of antibiotic development, said the fund is "life-saving" for many of these companies, which are often looking to partner with larger companies with more money and technical knowledge once they get their products through phase 1 clinical trials.
"Most of these companies operate on a shoestring budget," he said. "But let me be very blunt: Unless the US government changes antibiotic reimbursement, today's excitement will end in bankruptcy."
Helen Boucher, MD, chief of geographic medicine and infectious diseases at Tufts Medical Center, said that, ultimately, the goal is to have new antibiotics developed and ready to go when patients need them. She relayed the story of a patient of hers who was in complete remission from leukemia but died from pneumonia and a bloodstream infection caused by a pathogen resistant to every drug tested.
"The needs are huge," Boucher said. "It's not just one antibiotic, or even the two to four that are coming with this really great new public-private partnership, but it's a robust and renewable pipeline that goes on to combat the resistance problems that we know about and those that we might not know about."
Antibiotic candidates must be new, innovative
Neil Clancy, MD, an infectious disease specialist at the University of Pittsburgh who was not part of the launch event but has studied and written about the market for new antibiotics, said he welcomes the investment and engagement from the large pharmaceutical companies, since they have largely abandoned antibiotic development. But he agreed that the reimbursement model remains the crux of the problem.
"There needs to be some delinkage, where reimbursement is not linked to numbers of prescriptions," he said, citing the United Kingdom's subscription-based model, which is currently being tested in a pilot study, as an example. "Until there's some reimbursement structure that makes antibiotics something other than massive money losers, then it's going to be hard to sustain antibiotic development."
A recent paper co-authored by Clancy and M. Hong Nguyen, MD, of the University of Pittsburgh provides an example of the challenging market for new antibiotics. The paper found that, from February 2018 through January 2019, combined sales for three new antibiotics targeting carbapenem-resistant Enterobacteriaceae—among the most difficult drug-resistant pathogens to treat—totaled $101 million. To be profitable and sustainable, Clancy and Nguyen noted, most new pharmaceutical companies target about $300 million in annual revenue.
Clancy also said the fund will need to be strategic in the products it chooses to invest in. "If you spend a billion dollars making non-innovative, derivative antibiotics that are all competing against one another with similar spectra of activity, then that is a very inefficient model," he said. "The current pipeline is not only thin, but it's also lopsided, with many agents going after the same AMR pathogens with similar spectra of activity."
Ricks said the focus of the fund will be on truly novel or breakthrough antibiotic candidates that could have the biggest impact 10 years down the line. "We're bringing expertise, know-how, and our scientific teams to make sure we invest in the very best and most promising novel targets that can help address the key resistant bacteria we see today and those that are predicted in the future," he said.