LONDON (Reuters) - The
drugs don't work - and neither does the market, when it
comes to antibiotics.
When sophisticated bugs that medicines used to kill within days
start to fight back and win, all of healthcare, and the people it
keeps alive, is in trouble.
Take gonorrhoea, a sexually transmitted disease contracted by more
than 100 million people a year: it used to be easily treatable but
has now developed superbug strains that are drug-resistant and are
spreading around the planet.
Tuberculosis is a similar tale. Totally resistant forms of the lung
infection emerged in India just a few years ago and have now been
detected worldwide. Hospital patients in Africa with untreatable TB
are often simply sent home to die.
It's a glimpse of what Britain's chief medical officer Sally Davies
calls the "apocalyptic scenario" of a post-antibiotic era, which the
World Health Organisation says will be upon us this century unless
something drastic is done.
Waking up to the threat, governments and health officials are
getting serious about trying to neutralize it. It may seem like a
question of science, microbes and drugs - but in truth it is a
global issue of economics and national security.
Fixing the problem is daunting but past successes in rolling out
drugs for HIV, vaccinating millions of children in the developing
world and recalibrating rewards for medicines to treat rare genetic
diseases suggest it is doable.
The debate moved to center stage last week when British Prime
Minister David Cameron launched a global review of the crisis,
securing specific support from U.S. President Barack Obama and
German Chancellor Angela Merkel.
That builds on a resolution passed at the World Health Assembly in
Geneva in May recognizing the pressing need for the world to act in
the fight to combat increasing resistance.
"We cannot contemplate failure," Davies told Reuters in an interview
in her office in London's Whitehall. "We have to find something that
works for the world."
What this demands, according to academic and industry experts, is a
new business model that rewards drug firms for developing new
antibiotics even if they are rarely used.
It is no accident that Cameron chose a big-hitting economic brain -
former Goldman Sachs chief economist Jim O'Neill - to head the
"This is...not a science issue. This is an issue of markets and
economics," said Davies. "A scientist would just get bogged down and
not get it."
TALE OF TWO DRUGS
In recent decades, drugmakers have slashed investment in antibiotics
because of poor returns from a class of low-priced medicines that
are only used for short periods, even as overuse of existing drugs
has spurred the spread of resistance.
As a result, the world's biggest investor in the field today is a
little-known U.S. firm, Cubist Pharmaceuticals, with an annual
research budget for antibiotics of $400 million.
The industry complains its bug-killing medicines are severely
undervalued - and they have a point.
Just over a year ago, Johnson & Johnson won approval for the first
drug in 40 years that provides a new way to treat TB, yet sales of
Sirturo are forecast by analysts to total just $75 million this
Compare that to Gilead Sciences' new hepatitis C drug Sovaldi -
carrying an eye-watering U.S. price tag of $1,000 per pill - which
is tipped to sell more than $8 billion in 2014.
The key challenge is how to reward companies for finding drugs like
Sirturo that must be used as sparingly as possible to avoid
resistance developing - in effect, breaking the traditional link
between payment and prescription volume.
Since it typically takes 15 years to develop a new drug, smart
companies are starting to think ahead now, even though any market
revamp is at least two years off - perhaps requiring a special
United Nations session sometime in 2016.
GlaxoSmithKline, for example, one of the few large drug companies
still working in the field, already has teams working through the
implications of such a shift.
A belief that the tide may turn has also encouraged Roche back into
antibiotics. The Swiss firm last launched an antibiotic in 1982.
And self-interest comes into play as well: A post-antibiotic world
would undermine sales of important drugs to fight cancer or prevent
rejection after organ transplants, since these medicines cannot be
given without the safety net of effective antibiotics for treating
potentially deadly infections.
Patrick Vallance, a former academic who now heads up GSK's
pharmaceuticals research, believes a system of advanced market
commitments could be the answer, under which governments would agree
to buy up new antibiotics for, say, a 10-year period.
A similar scheme for vaccines, known as GAVI, funded largely by
donor governments and philanthropists, already works well and has
helped buy shots to immunize hundreds of millions of children in
poor countries against killer diseases.
But while GAVI guarantees firms big orders in exchange for low
vaccine prices, an antibiotic purchase arrangement would need to
turn that concept on its head by minimising the volume used - a
challenge for manufacturers and governments alike.
Others see a role for prizes, along the lines of the 2004 Ansari X
Prize for space flight. Indeed, a $17 million British Longitude
prize - modelled on the original search 300 years ago for an
accurate way to measure longitude - was offered last month for a
simple bacterial infection test that could lead to smarter
However, prizes work best for single breakthroughs, whereas the
world needs a sustainable flow of new antibiotics to keep modern
medicine ahead in the evolutionary race with bacteria.
Extending patents for antibiotics is another approach, since
antibiotics typically reach peak sales after 13 years on the market,
compared to just six for other drugs, by which time the initial
patent has run out.
A variation on the concept is transferable patent extensions for
other medicines - expanding the time during which a drug company can
reap profits from an expensive patented product in another area,
such as cancer or heart disease.
Offering additional market exclusivity has worked for so-called
orphan drugs for rare diseases, but the trade-off has been sky-high
prices that have sparked their own controversy.
State support for new drug research may be another way to help plug
the gap, as exemplified by Europe's Innovative Medicines Initiative,
which is funded jointly by industry and the EU.
It is clear, however, there is no simple solution - and some experts
fear veering too far from free market forces will create perverse
incentives that could result in taxpayers' money ending up in
shareholders' pockets with meagre benefit to society.
Steve Gilman, chief scientific officer at Cubist, is skeptical about
decoupling financial rewards from sales.
"De-linkage is an interesting concept but I'm not sure it is a
practical concept," he said in an interview. "Who's going to come up
with the money just to put drugs on the shelf?"
Like many in the United States, he is more focused on simply raising
prices as the key lever to improving rewards - a view that resonates
with many investors, according to Akiva Felt, an industry analyst at
investment firm Oppenheimer, who worries that complex new purchase
deals would be hard to value.
For companies like Cubist the current situation is not all doom and
gloom. The exit of bigger players has reduced competition, while
recent steps to ease the regulatory path to market have helped and
the U.S. Generating Antibiotics Incentives Now (GAIN) Act now
ensures some extra patent life.
Indeed, the U.S. Food and Drug Administration has approved two new
drugs from Cubist and Durata Therapeutics for acute bacterial skin
infections in the last two months. That's encouraging but a more
fundamental fix is still needed.
Jeremy Farrar, head of the Wellcome Trust medical charity which has
made antibiotic resistance a top priority area for research funding,
sees an analogy with the defence industry.
"This is a national security issue because of what it would do to
the whole of medicine and health - and governments are just going to
have to step in," he told Reuters.
"The government doesn't design a tank, but it does promise to buy
one if you build it to certain standards and specifications. There
are lessons to be learned in the antimicrobial world and the pharma
sector from other industries which governments just have to have,
and have to fund."