In its quest to make drugs more affordable, a group of prominent Democrats introduced into both Houses of Congress the […]
In its quest to make drugs more affordable, a group of prominent Democrats introduced into both Houses of Congress the “Improving Access to Affordable Prescription Drugs Act.” This ambitious bill seeks to accomplish a lot of things, such as requiring greater transparency with respect to R&D costs for new drugs, allowing Medicare to negotiate drug prices and allowing drug re-importation from outside the U.S.
But there is an interesting new wrinkle in this act that is meant not just to reduce prices of new drugs but also to stimulate R&D into the search for new antibiotics to treat drug-resistant infections. Called the “Antibiotics Prize Fund,” the bill if enacted would authorize the U.S. Treasury in FY 2018 to appropriate $2 billion to be used by the director of the NIH to award “up to three prizes for qualifying products that provide added benefit for patients over existing therapies in the treatment of serious and life-threatening bacterial infections” as demonstrated in superiority trials. The bill also calls for awarding “open-source dividend prizes for contributions that significantly advance the field of antibiotic research with openly sourced materials, technology, data and knowledge.” Note that no more than 5% of the amount available in the Antibiotic Prize Fund can be devoted to open-source dividend prizes. In order to determine what would merit such an award, the director of the NIH will be asked to establish public criteria and goals that would constitute advancement of research in the field.
Of course, there are conditions for receipt of these prizes. The recipient must agree to publicly disclose all preclinical and clinical data with respect to the qualifying new antibiotic. The recipient must also ensure that the NIH director, the FDA commissioner and the director of the CDC all review the proposed marketing, sales and promotional materials in order to ensure that such activities align with and advance the goals of proper conserving stewardship for the utility of antibiotics. Both of those requests are pretty reasonable.
The recipient shall irrevocably waive all periods of exclusivity available to the product under Chapter V of the Federal Food, Drug and Cosmetic Act and all applicable patent rights under title 35, United States Code.
Effectively, what the proposers of this legislation want is for a company to cede all rights to the novel antibiotic. Once approved by the FDA, the new drug can be marketed by the originator–but also by anyone else. Thus, the drug would immediately become generic. This is great for payers and consumers as, given such sudden competition, the price of this breakthrough medication would be relatively low as a number of generic companies would be vying for market share and driving down its price. But, could this be a dealbreaker for biopharmaceutical companies?
Breakthrough antibiotics for drug-resistant infections are desperately needed. But the market for such drugs is unique. Once approved by the FDA, these drugs would be used sparingly, sequestered for use only by patients who have failed all other therapy. Thus, while the market potential is great, the initial uptake of such a medicine would be slow as its use will be limited. However, given the lifesaving nature of such a drug, the potential for high pricing exists. While prices in the range of drugs to treat cancer or rare diseases would be unlikely, one could justify prices on the order of $50,000/cure–the same seen for hepatitis C cures like Harvoni (Gilead) or Viekira Pak (AbbVie). But even at $10,000/cure, would it behoove a company to instead yield its patent for such an important drug for even a major slice of the Antibiotics Prize Fund? Chances are companies would eschew the prize and develop the new antibiotic in a more traditional way.
Most companies involved in antibiotic R&D are doing so to benefit patients. But they also must generate revenues to move the company forward. The Antibiotic Prize Fund offers a carrot–but not a very appetizing one.