Opportunities in 2021 to Fix the Broken Antibiotics Market
Cara Lepore
Wes Kim
The Pew Charitable Trusts

s the world deals with the devastating impacts of COVID-19, another public health threat grows increasingly urgent: antibiotic-resistant bacteria. The US Centers for Disease Control and Prevention estimates at least 2.8 million antibiotic-resistant infections occur in the US annually, and more than 35,000 people die. At the same time, investments in new antibiotics to meet the threat are faltering, potentially reducing patient access to life-saving treatments. Fortunately, policy solutions are beginning to emerge.

The Problem

The danger of resistant “superbug” infections was a global crisis before the pandemic. Now, secondary infections complicate the treatment of COVID-19 patients, and early studies raise concerns about high use of antibiotics. The more we use antibiotics, the more quickly resistance develops, and the pandemic could accelerate that cycle.

The consequences of increased antibiotic resistance reach beyond treating bacterial infections such as urinary tract infections and pneumonia. Antibiotics are crucial to the success of nearly every aspect of modern medicine – from hip replacements and Caesarean sections to dialysis and cancer treatment. Without antibiotics to ward off infections, many of the medical procedures and treatments we take for granted today would simply be too dangerous to undertake.

The Broken Antibiotics Market

But despite the fact that resistant infections are on the rise and deaths are projected to skyrocket in the coming decades, the global pipeline of antibiotics in development remains woefully insufficient, in large part because the market for antibiotics is broken, and most pharmaceutical companies are no longer investing in antibiotic innovation.

The Pew Charitable Trusts’s analysis of antibiotics in clinical development demonstrates that both the number and diversity of drugs in the pipeline is inadequate. The majority of antibiotics in development today are derived from existing classes of drugs. And while such drugs may offer some clinical improvements in combating resistant pathogens, the truly innovative and novel antibiotics that are needed to overcome resistance must be prioritized.

Developing an effective and safe antibiotic is scientifically difficult, resource-intensive, and time-consuming; requiring ten to fifteen years and costing as much as $1.3 billion. Once successful, companies continue to face challenges even after bringing the drugs to market. In 2019 alone, two small antibiotics companies with newly approved antibiotics —Achaogen and Melinta Therapeutics—filed for bankruptcy. Another company, Tetraphase, was recently acquired for a small fraction of its valuation of only a few years ago.

There are several reasons for this. Since antibiotic prices are relatively low and physicians are asked to use new antibiotics sparingly to delay the onset of resistance for as long as possible, sales do not sustain commercialization. So, companies that create a drug that is important for the public health actually lose money. Compare this to oncology, where from 2014 to 2016 drug companies generated more than $8 billion in profits on cancer drugs, antibiotics companies incurred a net loss of $100 million during the same period.

Promising Solutions

Developments in 2020 offer hope to turn the tide, including a private sector fund to encourage antibiotic innovation, the introduction of legislation in the US Congress to establish government incentives for new antibiotics, and a promising payment pilot in the United Kingdom’s National Health Service (NHS).

The AMR (antimicrobial resistance) Action Fund is a partnership of more than 20 pharmaceutical companies with the goal of bringing two to four new antibiotics to the market by 2030. The initiative plans to invest more than $1 billion for late-stage clinical development in smaller biotech companies that currently dominate the clinical pipeline. However, its founders recognize that a fundamental market failure cannot be solved by a single cash infusion. Global governments need to change the way antibiotics are valued and reimbursed if they are to create a viable market.

Developing novel antibiotics that treat multi-drug resistant pathogens must be the highest priority, but we also need to adjust reimbursement policy to better value new antibiotics that provide incremental improvements. The proposed Developing an Innovative Strategy for Antimicrobial Resistant Microorganisms (DISARM) Act in Congress would allow for antibiotics to be reimbursed outside of existing payment structures, paired with strong stewardship provisions designed to help preserve the effectiveness of these drugs by reducing inappropriate use. Removing price as a consideration in a hospital’s decision to use new, potentially more expensive antibiotics for patients would enable appropriate patient access to these antibiotics.

The broad consensus among experts is that a package of post-market “pull incentives” is needed to revitalize the antibiotic pipeline. These incentives should reward the development of new antibiotics with the highest public health value by increasing the return on investment once they reach the market. Enactment of the bipartisan Pioneering Antimicrobial Subscriptions to End Upsurging Resistance (PASTEUR) Act, would provide government contracts to drug developers who successfully bring an innovative, high-priority antibiotic through FDA approval. Similarly, the United Kingdom’s National Health Service subscription pilot will offer up-front payments to incentivize development of antibiotics that address unmet needs. The programs maintain a high bar for qualifying drugs, ensuring that both governments invest in and improve access to the most critically needed antibiotics. Paying for these life-saving drugs based on their value to public health rather than sales volume can address the core market issues that have made antibiotic development unsustainable.

A Call for Action

The COVID-19 pandemic has thrown the urgent need for new and novel antibiotics into even sharper focus. The good news is that we can prepare for, and prevent, the worst outcome: a world without effective antibiotics. We need to urge the US Congress and the next Administration to prioritize antibiotic resistance before it’s too late, and to build on the momentum of 2020 by encouraging policymakers to support economic incentives, including the PASTEUR and DISARM legislation. To align with these efforts, governments of other nations need to take significant action as well. Without substantial government action across the globe, the development pipeline will remain stagnant. We can’t let that happen.
References available upon request.