Pharma Welcomes UK Incentive Plan To Tackle AMR
Executive Summary
There has been an enthusiastic response from industry to the news that NICE and NHS England are to explore a new payment model that pays pharmaceutical companies based on how valuable their medicines are to the country's health service, rather than on the quantity of antibiotics sold.
The pharmaceutical industry says it is ready to play its part in meeting the challenge of antimicrobial resistance (AMR) after being buoyed by the UK government's launch of a major proposal that could offer drug makers a new payment model and incentivize more research in the area.
The government has published a 20-year vision and five-year national action plan for how the UK will contribute to containing and controlling AMR by 2040. It includes targets, such as cutting the number of drug-resistant infections by 10% (5,000 infections) by 2025, reducing the use of antibiotics in humans by 15% and preventing at least 15,000 patients from contracting infections as a result of their health care each year by 2024.
The plan is being launched by health secretary Matt Hancock at the World Economic Forum (WEF) in Davos. He claimed that AMR needed to be treated as a global health emergency, saying that "each and every one of us benefits from antibiotics, but we all too easily take them for granted, and I shudder at the thought of a world in which their power is diminished. Antimicrobial resistance is as big a danger to humanity as climate change or warfare. That’s why we need an urgent global response."
This is not a new message but industry observers have been enthused by the part of the plan that will see England and Wales' cost-effectiveness watchdog NICE and NHS England explore a new payment model "that pays pharmaceutical companies based on how valuable their medicines are to the NHS, rather than on the quantity of antibiotics sold." The conventional business models that work for most pharmaceuticals have failed to motivate the development of new antibiotics and a WEF report published last year, put together in collaboration with the Wellcome Trust, noted that of a total $40 billion-a-year market for antibiotics, sales of patented antibiotics only constituted about $4.7bn.
Clinical trials of antibiotics are complex and costly and with such meagre returns on offer to date, the majority of big pharma players have exited the space. Now the UK government has explicitly stated its desire to address the market failure in antibiotics and hopes the proposals will incentivize companies to invest in the development of drugs that will treat high priority resistant infections.
The country's department of health noted that the way drugs companies are currently paid depends on the volumes they sell, meaning they have an incentive to sell as many as possible, at the same time as government is trying to reduce antibiotic use. It added that "low returns on investment in development means industry does not innovate enough and as a result, very few of the new drugs that are currently in the pipeline are targeted towards priority infections.”
Pharma 'Ready And Waiting'
There are hopes that this could change and the new plan got the thumbs-up from Mike Thompson, CEO of the Association of the British Pharmaceutical Industry. "We have been working closely with the government for the last two years and pharmaceutical companies are ready and waiting to start testing a new model to support antibiotics R&D in 2019."
Thompson added that the UK had "shown international leadership in raising the profile of this global health threat" and the government's plan "reinforces its commitment to finding solutions to the issues which have hampered the development of new medicines for so long.”
Steve Bates CEO of the UK BioIndustry Association said it is "really good" to see the country "taking a first-mover advantage on innovative pricing and reimbursement for AMR. Ensuring these incentives work for innovative small biotech companies and their investors is vital as we continue to see established players divesting from this area."
He added that since the UK market is only 3% of the global drugs market,and this being a worldwide problem, the biggest value of the move will be of the country offering its "continued political leadership to inspire other countries to develop reimbursement mechanisms for drug developers in AMR suitable for their own health systems."
One of the companies hoping to benefit is Destiny Pharma, whose lead program, XF-73, is in clinical studies for the prevention of costly, post-surgical infections such as meticillin-resistant Staphylococcus aureus (MRSA). CEO Neil Clark said the Brighton-based firm "welcomes government recognition of the need for financial support for companies carrying out research and drug development for anti-infectives that address AMR and new financial incentives for pharmaceutical companies that distribute and sell them.” (Also see "Destiny Pharma's XF-73 Being Studied For Diabetic Foot Ulcers, Burns Too " - Scrip, 27 Sep, 2018.)
Graham Dixon, CEO of Neem Biotech, a Welsh firm looking at new approaches to address infection, particularly in wounds and cystic fibrosis, told Scrip that "despite the huge global threat of AMR, until recently there has been little incentive for the pharma industry to invest in the innovation needed to combat this pending disaster." He added that "concurrently with our progress in developing non-traditional solutions to counter resistance mechanisms, including targeting bacterial virulence, we have always been cognizant that we would need to explore novel payment models that are beneficial to healthcare authorities, ensure continued access to effective medicines by patients and ensure we are incentivized to continue our research in this important field.”
Glyn Edwards, CEO of another UK antibiotics specialist, Summit Therapeutics, commented that “the UK’s AMR vision is exciting because it acknowledges the necessity to curb the inappropriate use of antibiotics, the need for improved collaboration between industry and governmental bodies and, importantly, it recognizes the need for innovation in the development of new antibiotics." He added that the firm supports the government’s position "that a targeted approach could be part of the solution for developing medicines which could help future proof us against AMR. We eagerly await the detail.”
Peter Jackson, executive director at the UK's public-private AMR R&D Centre at Alderley Park near Manchester, sent an email to Scrip noting that the government announcement "is the critical step that the world has been waiting for, and is very welcome for AMR researchers." He pointed out that it takes huge amounts of money to research and develop a new treatment, "but we want to use new antibiotics sparingly, so pharma companies are unlikely to recoup their R&D investment by selling these new life-saving drugs to the NHS as sales volumes will be severely curtailed."
Jackson noted that the global response to this dilemma so far had been to introduce so-called 'push' incentives – grants and other financial incentives awarded to drug developers to reduce their cost of early-stage R&D. Initiatives such as the US-based CARB-X, the Danish Novo REPAIR fund and the Swiss GARDP program "are priming the development pipeline with hundreds of millions of dollars of new cash targeted at supporting small-to-medium enterprises (SMEs) worldwide." (Also see "REPAIR Is Trying To Fix The Antibiotic Gap Left By Industry" - Scrip, 12 Sep, 2018.)
However, "the international community has also been calling for action to fix the broken antibiotics reimbursement model" by introducing 'pull' incentives that ‘delink’ the revenues received by the pharma company from the volume of drug sold, Jackson added. The pull incentives "have been more elusive," he claimed, "and despite attempts such as the REVAMP proposal currently stalled in the US congress, none have yet been introduced." (Also see "A Tamer 'Wildcard'? Antibiotic Exclusivity Would Have More Strings Attached In New Bill" - Pink Sheet, 4 Jul, 2018.)
He said the news that NICE and the NHS are now working together with industry to trial a new reimbursement model "is a great breakthrough. This should point the way for other countries around the world to quickly follow suit and introduce their own incentives for antibiotics R&D," while at home it is a boost especially for SMEs "that are doing the majority of the research work in the UK. It is also an important signal to the private investment community to step back up to the mark and support companies engaged in AMR R&D."
Several of the projects at the AMR R&D Centre are targeting the most persistent and dangerous lung infections, caused by Pseudomonas aeruginosa,” Jackson concluded. “Last year, there were over 70,000 cases of such life-threatening infections reported in the UK for patients on ventilators in hospital [and] just a 30% reduction in these infections could improve the prospects for over 20,000 patients and could also save the NHS an estimated £200m in intensive care costs every year."