Flaum Navigators

Instead of worrying about drug costs, let’s worry about the cost of drugs that don’t work!

n the closing days of 2019, the U.S. House of Representatives narrowly passed legislation that would, among other things, allow Medicare to refuse to pay for specific drugs it deemed too expensive. Although this piece of political grandstanding will never become law, it is dangerous in that it overshadows a truly sensible bill that does deserve our support.

I’m talking about the DISARM act (Developing an Innovative Strategy for Antimicrobial Resistant Pathogens). It’s been introduced in both the House (HR 4100) and the Senate (S1712) and has sponsors on both sides of the aisle.

Before we go into the particulars, keep in mind that antibiotic resistance bacteria is responsible for more than 3 million infections with 48,000 deaths every year and costs the health care system around $2 billion [CDC Report, 11.13.19.] According to a study in Health Affairs journal, antibiotic-resistant bacterial infections have more than doubled in the last two decades, climbing from 5% in 2002 to 11% in 2013. Last year, 2.8 million Americans had an antibiotic-resistant infection. Next to climate change, emerging antibiotic resistance is about as serious an existential threat as you can imagine.

Fortunately, we have plenty of ways to address the problem. We can stop promoting drug resistance caused by antibiotic overuse, especially in agriculture. But even more important, we have to develop new antimicrobials to take on the rising tide of superbugs. Unfortunately, our obsession with the costs of pharmaceutical innovation is making this next to impossible.

Pharma giants like Aventis, Eli Lilly, and Bristol-Myers Squibb once rolled out new antibiotics like an assembly line. But in the last two decades, antibiotic development has stalled. According to a Tufts Medical Center study, the chance of a new antibiotic being approved has dropped from 20% to around 12%. The study estimated the overall costs of bringing a new antibiotic to market at $2.6 billion.

Once a drug is approved, it gets even tougher. To recoup development costs, new antibiotics must be priced at levels far above generics from the 1980s.  Cash-strapped formulary committees restrict new drugs to the most desperate cases and then only after repeated failures of historical drugs.

So what happens to companies foolhardy enough to enter this market?  In 2019 alone, three promising biotech startups (Achaogen, Aradigm, and Melina) went broke. Several other companies are in danger. For example, even after Tetraphase launched XERAVA, an exciting drug that cures several life-threatening multiple-drug resistant infections, the company still couldn’t meet its numbers. Investors saw the company’s stock tumble from $40 to $2. Not surprisingly, Tetraphase leadership has decided to get out of the antibiotic business.

That’s where the DISARM act will help.  Among other things, the bill requires Medicare to reimburse hospitals for purchasing new and crucially important antibiotics. Innovators and investors can be confident that their breakthroughs will rewarded. Doesn’t this make more sense than forcing leading-edge drugs off the market with arbitrary price controls?

Here’s another idea. Let’s urge the FDA to modernize its antibiotic approval process, as they’re already doing in other disease categories, including cancer. Thanks to the ACA, we have an enormous data set for infectious diseases. Innovators can mine patient records to learn what mechanisms work best against which bugs. By deemphasizing the need for large, unwieldy, and increasingly obsolete clinical trials, we can reduce the costs of developing new antibiotics and improving how we use the ones we have.  By bringing down this overhead, we can bring more antibiotics to market.

Let’s work together. We can’t back down in the fight against antibiotic resistance.