Plazomicin EU marketing application is withdrawn: Near zero market value of newly approved antibacterials

Cipla is being very clear here about its inability to meet requests from the EMA: Why put more money into a drug that would have near zero sales? We don’t have the details, but we can see that work was requested on manufacturing (a bit hard to understand given that FDA had approved the manufacturing process) and the PIP (Pediatric Investigation Plan, to be expected as this is required for approval of all new drugs in Europe). 

So what would Cipla’s logic had been? To refresh your memory (or if you are new to this problem), it is important to know that Cipla’s challenge is shared by all new antibiotics. Here’s a quick reminder:

1. After spending on average $1.3b over 10-15 years to reach approval (see 6 Mar 20 newsletter), the resulting sales of most new antibacterial agents will not sustain the drug on the market.
2. As a simple demonstration of this, Alan Carr’s 2020 market review (28 Jan 20 newsletter) provided data showing that average sales for the 12 months ending Nov 2019 (i.e., most of 2019) were < $50m for the entire group of 17 antibiotics approved since 2009.
   • But, the average is misleading as the sales are not uniformly distributed: an astonishing 10 of these 17 drugs had sales < $15m.
3. Further, a company needs ~$350m in sales over its first 10 years on the market simply to break even on a cash flow basis (7 Jan 20 newsletter).
   • That’s $350m just to (i) manufacture the drug, (ii) do minimal pharmacovigilance and resistance surveillance, and (iii) complete pediatric requirements.
   • In particular, it does not cover repayment of investors, additional clinical studies, additional indications, or anything else that would teach us more about the drug. 
4. ZEMDRI’s sales in the US for the 12 months covered by Alan’s review were $1m.

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Inhale, exhale. Yes, the net effect is that now nobody in Europe will have ready access to plazomicin as the costs to complete registration in Europe clearly outweighed the negligible potential sales.

So, access to plazomicin will be limited going forward. There will be some access as Cipla can (and likely will) register with territories that accept as-is the FDA-approved package. Combined with fact that Cipla has the big financial advantage of having acquired plazomicin for $16m and without having to do the 10+ years of work required to complete the drug’s pivotal trials, even a little profit in those territories will be a reasonable return for them.

But the disastrous consequence is that this makes an iron-clad case for investors that investing in antibiotics is madness. And, anything that does get developed will be done with a rock-bottom minimum package, all of which will further contribute to the problem of limited and delayed global registration (Kållberg et al., 2018, link).

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So, there you have it. This is why we need to think differently about paying for antibiotics. Plazomicin is a potentially life-saving antibacterial antibiotic that should be used with appropriate stewardship and only in specific patients. But, our current system of paying for antibiotics only when we use them in an individual patient entirely overlooks the fire extinguisher (or insurance) value of high-end antibiotics.

Antibiotics are the #FireExtinguishersOfMedicine (link), the critical enablers of all health care. And if we do a good job with clean food, clean water, sanitation, and vaccines then we don’t need them very often. But, when we do have an infection (fire), it is too late to start to develop the drug (build the fire station). We must do this in advance by maintaining our supply of diverse antibiotics (fire extinguishers) at all times — even when we are not currently pulling the ring and spraying the foam! 

With the $1b AMR Action Fund, pharma have donated the money needed to bring new agents to approval. But, if approval looks like the outcome for plazomicin, we will have built a bridge to nowhere.

As was stated repeatedly at the AMR Action Fund launch, we must now create sales-delinked innovation rewards (Pull incentives) for antibiotic developers. The potential reward on a global basis needs to be in the $1-4b range per antibiotic (see again that 7 Jun 20 newsletter cited above) and it needs to paid to ensure the availability of the given agent without regard to how often the drug is used to treat patients. This is clearly at a scale only possible for governments but only the UK (link) is currently implementing an appropriately sized such Pull incentive. The US might become country #2 if the PASTEUR Act now being drafted in the US gains traction (link). But even that won’t be enough — it will require the effort of the entire G20 to actually make this happen.

Fingers and toes crossed, the AMR Action Fund will use its creation of valuable new antibiotics to say loudly and clearly, “Pharma have gotten busy and created new life-saving antibacterial agents. Here they are! But, they are not going to be available to patients unless governments step up to do their part to support the antibiotic R&D ecosystem.”

Never let a good crisis go to waste! Let’s make this happen! All best wishes, John & Kevin

John H. Rex, MD | Chief Medical Officer, F2G Ltd. | Operating Partner, Advent Life Sciences. Follow me on Twitter: @JohnRex_NewAbx. See past newsletters and subscribe for the future: https://amr.solutions/blog/. All opinions are my own.

Kevin Outterson, JD, Professor of Law, Boston University & Executive Director, CARB-X (these views are personal and do not necessarily reflect the views of CARB-X or any of its funders) @koutterson