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11 min read 10th November 2011

Antibacterials: Roundtable Addresses the Critical Issues

Antibacterial drug resistance is a serious and growing worldwide problem that threatens our ability to cure traditionally treatable diseases and to successfully perform numerous surgical procedures that rely on antibacterials. The current situation is due primarily to two causes: inappropriate…

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Antibacterial drug resistance is a serious and growing worldwide problem that threatens our ability to cure traditionally treatable diseases and to successfully perform numerous surgical procedures that rely on antibacterials. The current situation is due primarily to two causes: inappropriate use in humans and animals, and the decline in the development of new antibacterials, largely because of lower returns on investment in R&D. OHE has been very involved in both defining the challenge and thinking through possible responses.

Antibacterial drug resistance is a serious and growing worldwide problem that threatens our ability to cure traditionally treatable diseases and to successfully perform numerous surgical procedures that rely on antibacterials. The current situation is due primarily to two causes: inappropriate use in humans and animals, and the decline in the development of new antibacterials, largely because of lower returns on investment in R&D.

OHE has been very involved in both defining the challenge and thinking through possible responses. Earlier this year, OHE launched its publication, New Drugs to Tackle Antimicrobial Resistance: Analysis of EU Policy Options and also hosted a roundtable with a number of stakeholders. The objective of the roundtable was to create a consensus around the critical issues involved in constructing a framework that can encourage antibacterial R&D, identify potential obstacles to the implementation of such a framework and discuss how best to move forward. Participants included the European Commission, Member State governments, biopharmaceutical companies, ReAct, advocacy groups, and independent economists with expertise in the area. A summary of the key issues and the deliberations of the day are available in OHE’s most recent Seminar Briefing publication, available for download and summarised below.

New Drugs to Tackle Antimicrobial Resistance: Analysis of EU Policy Options points out that the challenges for antibacterial R&D are unlike those for most other therapeutic areas. The appropriately high revenues that are necessary to encourage the development of new drugs, including antibacterials, can be generated either from prices or volume of use. In the case of antibacterials, third party payers currently are reluctant to accept sufficiently high prices; high volume can contribute to the development of resistance that, in turn, will reduce volume. OHE’s report makes two recommendations, not mutally exclusive, for addressing this market failure: (1) a hybrid approach of push and pull incentives that both stimulate R&D and ensure appropriate use to minimise resistance, and (2) an up-front payment or ‘prize’ in the form of an Advanced Market Commitment (AMC) or a transferable (wildcard) IP extension for the successful development of novel antibacterials.

The morning discussion about the OHE report raised several points: (1) action will need to be taken at the Member State, rather than the EU, level on core challenges such as accelerated review, improved health technology assessment (HTA), and pricing and reimbursement (P&R) reforms, (2) AMCs create incentives only in the markets to which they are applied and the inclusion of a ‘tail price’ strengthens incentives to increase volume that could cause further development of resistance, (3) transferable IP extensions may have unintended consequences that could pose a burden to patients and distort the markets to which they are applied by affecting competition, (4) European priority review vouchers (PRVs) are a possible alternative to transferable IP extensions and theoretically could have a positive effect, and (5) the pharmaceuticals industry’s openness to new approaches that separate financial returns from volume of sales represents a historic opportunity.

In the afternoon, EFPIA sponsored a roundtable discussion that focused on what would be required politically and technically to design and implement a new model for antibacterial R&D.

Politically, the support of the Swedish government and the leadership of ReAct have succeeded in drawing attention to the issue of antibacterial resistance and framing the debate. The roundtable agreed that the European Commission is best placed to assume leadership now and, in fact, has been active already through its Framework Programme and collaboration with the US in TATFAR. The Commission is developing a five-year plan, to be announced shortly, that will emphasise the need for innovation sooner rather than later.

The roundtable identified an important list of other stakeholders that should be involved, including Member States’ HTA and P&R agencies; the pharmaceutical industry, both large corporations and small-to-medium-size entities (SMEs), whose needs along the value chain may differ; NGOs; academic experts; veterinary and animal health companies; health care professionals; and patient and consumer groups. Developing an effective ‘new’ R&D model for antibacterials faces a number of technical challenges. Those discussed by the roundtable included the following.

  • Scientific challenges include not just the science per se, but also encouraging the creation of a new generation of experts and greatly increasing collaboration within and across research organisations, both public and private.
  • De-linking sales volume from financial returns is important to slowing the development of resistance; no clear approach to achieving this was identified by the roundtable.
  • Stewardship is essential, i.e., measures that effectively both minimise inappropriate use and ensure appropriate use. The roundtable was divided about how prominent a role the EU should play outside its borders. Other issues raised included the danger of stewardship being a screen for anticompetitive behavior, the need to include generics, and the possibility of a tax on newly-generic antibiotics to raise funds for R&D and/or training in appropriate use.
  • Market signals can indicate to pharmaceutical companies what products are most likely to be accepted by payers and also might be used to encourage stewardship, if workable ways to implement that could be devised. A more radical proposal was a third party payer patent buy-out that leaves the health care system entirely responsible for appropriate use.
  • Reforms in the regulatory process could have a significant effect on the economic expectations of pharmaceutical companies considering antibacterial R&D, in part by reducing uncertainty and minimising costs. Two areas in particular were identified as important: (1) the need for greater consistency in the regulatory requirements of the FDA and the EMA and (2) improving the development and regulatory processes for antibacterials specifically. The possibility of trading off additional post-approval research for earlier market access (e.g., after Phase II) was discussed, with parallels to other therapeutic areas noted.
  • Openness and greater collaboration can speed the process of discovery and development, an approach that has worked in other industries and is taking place to some extent now for antibacterials. The roundtable agreed that a useful first step would be a mapping exercise to better define the current state of play and knowledge about collaborative practices.

Moving forward as quickly as possible is in the interest of all parties. In the short run, the focus might be on implementing a strong incentive, based on the traditional model, to reignite R&D in this area. In the long run, the focus should be on addressing the more fundamental and systemic problems with antibacterial R&D. The pharmaceutical industry clearly is prepared to play its part, and to be flexible in so doing. With the new Commission action plan due very soon, now is the time for all stakeholders to engage.

Download Sharma, P. (2011) Summary report of the OHE/EFPIA antibacterial roundtable. Seminar Briefing. (9). London: Office of Health Economics.

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  • Economics of Innovation
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