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Bankruptcies for antibiotic firms show need for new funding models, says UK envoy for AMR

by Thomas Meek
LONDON, 21 Feb (APM) - Recent bankruptcies of companies developing antibiotics are a signal that funding models need to change, according to one of the UK's most senior experts in the area.
Professor Dame Sally Davies, the UK special envoy for antimicrobial resistance (AMR), highlighted at a conference on Thursday the need to move from an approach of 'push' funding, where funding is provided to academics and small companies working in early research in the area, to a model of 'pull' funding, to ensure adequate reward for drugs that reach the market.
"What we haven't won yet is the pull funding - getting the purchasers to pay the true price for antibiotics to make it worthwhile for big companies to invest in this," said Davies, who was speaking at a Westminster Health Forum event in London on AMR.
Despite the growing threat of resistance to antibiotics, research in the area has slowed over the past few decades due in part to the lack of return for pharma companies.
The issue is that current payment methods for drugs do not adequately reward companies behind new antibiotics, as these more expensive products tend to be held in reserve behind cheaper older drugs to avoid the build-up of resistance.
This means there are fewer financial incentives for companies to invest in the area, especially when compared to the markets for conditions such as HIV and hepatitis C, where new products tend to be blockbusters but the cost of developing a drug will be similar.

Achaogen and Melinta

The environment has proved to be too challenging for two companies working on new antibiotics: Achaogen and Melinta, both of which have filed for bankruptcy in the past year (APMHE 65667).
Davies described Achaogen as a "tragic story". The company won approval for Zemdri (plazomicin), a once-daily intravenous infusion, to treat adults with complicated urinary tract infections (cUTI).
However, this was a far more limited licence than the company was expecting, said Davies, who suggested that may have been down to Achaogen's relative inexperience in regulatory affairs.
"They hoped to get a licence for pneumonia and chest infections and that would have been better. But what it also shows is the difficulty of getting new antibiotics into use."
Melinta filed for bankruptcy at the end of 2019 after warning it was running out of cash and delaying the launch of Baxdela (delafloxacin) in a new indication for adults with community-acquired bacterial pneumonia (CABP) caused by designated susceptible bacteria (APMHE 65667).

Challenges

Part of the problem is the delay in updating guidelines for antibiotics, said Davies, noting that in the U.S. it takes about 10 years for a new antibiotic to get into guidelines. There are also behavioural change issues for practitioners once a guideline is put into practice.
"It's a worry", said Davies, who was formerly chief medical officer for England.
She said there are some promising drugs in early-stage research, thanks in part to funding from projects such as Carb-X, a global non-profit partnership dedicated to accelerating antibacterial research that was set up in 2016 and is funded by several governments and organisations.
"But we've got to bring them through and that takes us to a really expensive and problematic area.
"Clinical trials cost a lot, manufacturing has to be built up, regulation is a specialty issue and the supply chains are a real logistics matter. So those are problems. But then if you add to it the fact that we pay very low levels for antibiotics and we want to protect these drugs so they're not overused - you find block after block in these areas."

New funding models

There have been widespread calls for new funding models for antibiotics to address these issues, including subscription-type models that delink quantity of the product from the free and market entry rewards, such as a large lump sum.
The UK is taking action in this area, piloting a new subscription style payment model for antibiotics that will pay pharmaceutical companies upfront for access to drugs based on their usefulness to the NHS (APMHE 63631).
Davies described it as "very exciting" project that industry is contributing to and has received interest from other parts of the world.
Bryan Deane, new medicines and data policy director at trade body the Association of the British Pharmaceutical Industry (ABPI), said earlier in the conference that he believes the "potential to demonstrate workable incentives at a UK scale" for the development of new drugs.
However, this is an international issue, he added.
"This has got to be solved on a global level. And whether or not other countries can pick up this type of pilot or they pick up some other forms of payment - we will need to put these together so that we have a suite of incentives that solve the market issue."
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