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Proposal aims to solve the challenges for developing new antibiotics

The shift from volume to value is happening all over health care, even in antibiotic development. A team of experts at Duke University released its Priority Antimicrobial Value and Entry (PAVE) proposal, which aims to assure a return-on-investment (ROI) for antibiotic developers. The proposal works by shifting the revenue of new antibiotics from the volume used to their value to treat high risk infections from multidrug-resistant bacteria. The proposal seeks to promote antibiotic stewardship so that future drugs remain effective.

The proposal would use public funds to cover most of the revenue for the first one to two years a new antibiotic is on the market. The revenue would be phased out over five years and replaced with revenue from population-based contracts with health insurers. The health insurance companies would pay the company that develops the antibiotic on a per-volume basis in exchange for the company’s guarantee that the new drug would be available for any patients who develop high-risk infections from multidrug-resistant bacteria.

Developing new antibiotics comes with many financial challenges. Public and private partnerships help to provide incentives for companies to develop new antibiotics by providing funding during the pre-clinical and clinical trial phases of development. These partnerships are appealing to some start-up biomedical companies. But the challenge of a lack of ROI remains. The effectiveness of antibiotics is reduced the more they are used, so any new antibiotic – including those used for serious, multidrug-resistant infections – would need to be held in reserve to maintain effectiveness. Companies might not realize ROI if their medications are not widely used. The PAVE proposal represents an incentive that could help address that challenge.

The PAVE proposal uses the concept of a market-entry reward combined with population-based payments from the private sector. Health plans would pay the companies a certain amount per-member and per-month to ensure that all their members have access to the new antibiotic. They also would be encouraged to promote prudent use of the drug so that it remains effective. The model aligns with the health care system’s overall shift to link payment to value.

Other ideas put forth in the proposal include taxing pharmaceutical companies that are not developing new antibiotics. The rationale is that many types of drugs depend on effective antibiotics. Another idea is a transferable exclusivity voucher, by which a company would receive a 6- to 12-month exclusivity extension on the development and launch of a high-priority antibiotic. The company could apply that voucher to the new antibiotic or another drug in its portfolio, or sell it. The proposal could take years to implement and some ideas will likely be pilot-tested, but stakeholders think it is a positive sign that there is some consensus on ways to solve the challenges of developing new and effective antibiotics.

Related: Researchers are tackling the complex challenge of antibiotic resistance from multiple angles. A recent article in Nature describes some activities in the public and private sector to develop vaccines as a strategy. Vaccines can reduce the number of cases of diseases, which slow the rise of drug-resistant pathogens. Vaccines have an advantage over antimicrobials because they prevent infections, while antibiotics aim to stop an infection when there is already a dense population of microbes that can spur resistant strains. Vaccines face a similar ROI challenge in that they are expensive to develop. However stakeholders working on the issue are determined to demonstrate their value in fighting antimicrobial resistance – as well as protecting against infections – to encourage governments and health organizations to provide better incentives for new products.

Crowdsourcing is another strategy to find innovative solutions to the challenges around antibiotic development. Innovation funder Nesta announced the Longitude Prize – an international competition with a multi-million dollar prize – to encourage teams to submit novel ideas to conserve antibiotics for future generations. Teams involved in the competition are proposing a range of ideas, including developing rapid tests or diagnostic tools that a pharmacy or patients could use to identify bacteria. Another team is trying to detect the body’s immune-response to pathogens and improve ways the body can fight infection without antibiotics.

Author bio

Doug leads Deloitte Consulting LLP’s Life Sciences and Health Care practice. With 24 years of experience, he works closely with multiple top health care organizations on major clinical and enterprise transformation efforts and on large-scale technology implementation projects. Doug has extensive experience in comprehensive quality and patient safety transformations, turnaround and performance improvement in academic medical centers as well as organization/workflow redesign and technology enablement. He has served as the lead on a number of enterprise transformation initiatives with some of Deloitte’s most largest and most complex clients.