Reimbursing for innovative antibiotics / Encouraging updates from the AMR conference

Dear All (with thanks to Kevin as the lead author on this note and also with a wonkish note alert … refresh your coffee and settle in!),

Several years ago, DRIVE-AB planted some seeds across Europe on reforming how we pay for antibiotics. As a consequence, we are seeing some hopeful sprouts in several countries:

• Previous newsletters have examined antibiotic reimbursement pilots in England and Sweden as well as legislation proposed in the US [link].
• In the virtual AMR Conference this week, several speakers gave updates on progress on incentives (for a summary, go here for Kevin’s talk at the meeting).
• And as the conference closed, Sweden announced the first 5 drugs in their access pilot: ceftolozane-tazobactam, imipenem-cilastatin-relebactam, cefiderocol, meropenem-vaborbactam, and fosfomycin.

And to top it off, there is a bit of especially instructive good news from Germany. 

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As context, we have to start with some bad news. Recall that reimbursement systems in many countries create intense financial pressure to not prescribe new hospital antibiotics due to an 1980s-era reform known as the hospital-bundled payment or Diagnosis-Related Group (DRG) system. A DRG is the fixed amount the hospital receives for care of a patient with a given illness. If the hospital can deliver all elements of the needed care within the DRG payment amount, then a profit is made. If not, it leads to a loss.

The problem with DRGs arises when (as is common) the DRG cost bundle is mainly based on generic antibiotics. You’re admitted for pneumonia, you need antibiotics, but the DRG is only enough for a generic. It’s obvious that the hospital will inevitably lose money if a newer, more expensive antibiotic is used. This is the sort of thing that leads to continued use of colistin (cheap!) when better drugs (expensive!) are available (newsletter).

This problem has been recognized, and the proposed legislative solution in the US is the DISARM Act, by which antibiotics in the hospital are reimbursed outside of the DRG (to learn more read this background article by Kevin). 

Progressing further with the bad news, the DRG hurdle was made worse in Germany by a 2018 revamp of their Health Technology Assessment (HTA) processes for hospital products. In the revamped model, antibiotics automatically faced generic pricing unless they could prove “added benefit” compared to existing therapies in the HTA process. Essentially, new antibiotics needed to demonstrate superiority, which any careful observer knows is nearly impossible for new antibiotics. (For more on why superiority is nearly impossible to show and why that is a GOOD thing, see these newsletters [link] and [link], these papers [link] and [link], and this slide deck [link]). 

Net effect of all this? Germany unintentionally put a nail in the coffin for new hospital antibiotics.

9 Feb 2021 Addendum: Germany has now posted the rules for exempting “reserve” antibiotics at this link.

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At least two other countries have already taken steps to address their versions of the DRG problem. In the US, the Centers for Medicare and Medicaid Services agreed in 2019 that QIDP antibiotics (QIDP = Qualified Infectious Disease Product, an idea from the GAIN Act) were eligible for NTAP, the New Technology Add-on Payment that is a temporary way to reward new technologies outside of the DRG bundle. This was a good idea that sadly did not work out for wonkish reasons that lead to the need for the DISARM Act (go here for a detailed newsletter and see also the article by Kevin that was cited above). France has had a DRG carve-out system since 2004 for specified new medicines. Some costly antifungals and a few antibiotics are on this list. Encouragingly, the system in France has not negatively affected antimicrobial stewardship: a recent evaluation of the program by the French Sénat found several areas for improvement, but stewardship was not one of them (link).

What qualifies as a reserve antibiotic in Germany? That definition has been tasked to the Robert Koch Institute (RKI) and the Federal Institute for Drugs and Medical Devices (BfArM). The definition will take account of things such as the WHO’s Priority Pathogen list, the classification of antibiotics by the WHO (see the AWaRe list, link), as well as the resistance data from the RKI and the Central Office for the Evaluation of Resistance Data for Systemically Active Antibiotics (Z.A.R.S.) at the BfArM. 

Why is this so exciting? On the one hand, it’s still only a partial fix … the DRG obstacle remains as does the overall need for Pull incentives (link). But, the positive side is from the lessons learned on the way to implementing this fix:

• Unintended consequences have hurt antibiotic R&D. From introduction of DRGs, to HTA reforms, and even excellent stewardship efforts, good ideas sometimes have unintended implications for antibiotic innovation. We must remain attentive. 
• Speaking up works! This German reform discussed above comes after feedback from stakeholders. Everyone is busy, but responding to these public consultations is important.
• Strikingly similar barriers to antibiotic reimbursement emerge time after time in country after country.
• Partial victories should be celebrated as they spread understanding of the issues to our non-technical colleagues.

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So, good for Germany for stepping up and solving one part of this problem! And good for France for taking this on in 2004!

And on the theme of speaking up, please note the 4 Sep 2020 deadline for the comments on EMA’s Strategy to 2020 [link to newsletter]. The opportunity to influence the AMR agenda is real but nothing will happen unless you send in your thoughts!

All best wishes, Kevin and John

Reference materials: The commentary we could find is all in German:  (1) Nov 2019 news article on the proposed amendment; (2) Dec 2019 comments on proposed amendment from Federal Joint Committee overseeing physicians and insurance; and (3) Feb 2020 comments from German industry association (vfa) 

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  

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.