Appropriate pull incentive for new antibacterials: $2.2-4.8b for full delinkage

Dear All (and with thanks to Kevin Outterson for authoring this newsletter),

Readers of these newsletters will need few reminders of why pull incentives are critical to restoring the R&D ecosystem for antibacterials. (But if you are new to the issue, Andrew Jack’s 5-minute video explainer is a great start; see also this annotated list of newsletters on incentives).

Across all the debates about how create a pull incentive, a persistent question has been: What is the appropriate size for these pull incentives? Underpay, and we risk failure; overpay, and we’ve wasted taxpayer money.
 
That question is the subject of my research article out today in Health Affairs, the highest-ranked health policy journal. Entitled “Estimating The Appropriate Size Of Global Pull Incentives For Antibacterial Medicines,” the paper’s key conclusions are:

  • Prior reports (ERG, O’Neill, DRIVE-AB, BCG, WHO) underestimated the required size of pull incentives through a combination of factors, including unrealistically low manufacturing and post-approval costs, overestimating revenues, overestimating the success rate for preclinical R&D, and not accounting for the cost of the market sales that are not delinked (thus mistakenly concluding that partially delinked awards are overall cheaper than fully delinked subscription programs). For the record, I was a co-author on two of these reports!
  • The key takeaway: A combination of push and pull incentives totaling several billion dollars per drug are required globally.
  • For a fully delinked global subscription program, the optimal size for a global pull incentive is $2.2 to $4.8 billion, with a best estimate of $3.1 billion.
  • Partially delinked market entry rewards come in with lower direct cost best estimate of $1.6b but this cost ignores the impact of acquisition costs in the marketplace. 
  • If other wealthy countries also contribute their fair share, the UK subscription (“Netflix”) program and the proposed PASTEUR ACT in the US will be effective and efficient, as they are well within bounds of these estimates.

 
For more information, see the article, the online supplement, and the the open-access Excel model behind the paper. Wonkish details on the model are found below the signature block. In addition, the paper will be discussed in these settings over the next couple weeks:


This is a critical moment in the global Push-Pull conversation! Based on the substantial Push incentives deployed over the past ~5 years, there are now many interesting prospects for new antibiotics. But, all this energy will come to a crashing halt if we don’t address the final problem by deploying suitable Pull incentives. Having a good estimate of the fair value to global economies of a new antibiotic is pivotal to supporting the political discussion needed to finally create these incentives.

All best wishes, Kevin

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

With administrative support from 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.

— FURTHER DETAILS —
 
The Model. The article deploys an expected Net Present Value (eNPV) model for antibacterial R&D, similar to the methods in most major studies on pull incentives over the past decade. And for good reason: this is how pharmaceutical companies make financial go/no-go decisions on R&D. The Model begins at Hit-To-Lead, including all phases to first regulatory approval and beyond to generic entry, a total of 26 years. For each phase, out-of-pocket costs are incurred over a predicted duration, with a predicted probability of technical and regulatory success in the current phase. After approval, sales revenue begin to come in, as do post-approval costs. All of these costs and revenues are discounted back to the eNPV at the decision point. Companies should not proceed if the eNPV is negative or if there are other available projects with higher eNPVs.
 
Transparency. All aspects of the model are published with this article, including all data, coding, parameters, and the Dashboard. This allows for full transparency in all assumptions so that other researchers can replicate this research and improve it as better data become available.
 
Funding. This work was solely funded by the sabbatical research program at Boston University School of Law. While Pfizer gave me an internal eNPV model, all coding decisions were mine alone. This is my academic work, and does not necessarily represent the opinions of CARB-X or any CARB-X funder.

Current funding opportunities (most current list is here):

  • The AMR Action Fund is now open to proposals for funding of Phase 2 / Phase 3 antibacterial therapeutics. Per its charter, the fund prioritizes investment in treatments that address a pathogen prioritized by the WHO, the CDC and/or other public health entities that: (i) are novel (e.g., absence of known cross-resistance, novel targets, new chemical classes, or new mechanisms of action); and/or (ii) have significant differentiated clinical utility (e.g., differentiated innovation that provides clinical value versus standard of care to prescribers and patients, such as safety/tolerability, oral formulation, different spectrum of activity); and (iii) reduce patient mortality. It is also expected that such agents would have the potential to strongly address the likely requirements for delinked Pull incentives such as the UK (NHS England) subscription pilot and the PASTEUR Act in the US. Submit queries to contact@amractionfund.com.
  • INCATE (Incubator for Antibacterial Therapies in Europe) is a newly launched early-stage funding vehicle. Details are still coming into focus, but per comments on 25 Aug 2021 at the BIOCOM conference, their goal is to support ~4 companies per year with about $250k/company. Contact details are on their website (https://www.incate.net/).
  • CARB-X recently announced that their existing resources will be reserved to fund their existing portfolio (more than 80 total awards, and counting, as they include contracting from prior rounds). New rounds from CARB-X will occur only after new funding is obtained in 2021.
  • It’s not a funder, but AiCuris’ AiCubator offers incubator support to very early stage projects. Read more about it here.
  • The Global AMR R&D Hub’s dynamic dashboard (link) summarizes the global clinical development pipeline, incentives for AMR R&D, and investors/investments in AMR R&D.
  • In addition to the lists provided by the Global AMR R&D Hub, you might also be interested in my most current lists of R&D incentives (link) and priority pathogens (link).


Upcoming meetings of interest to the AMR community (most current list is here):

  • [CONTENT UPDATE] 2 Nov 2021 (virtual, 8-9.30a US East Coast, noon-1.30p London, 1-2.30p Paris, 9-10.30p Tokyo): Pfizer-sponsored webinar entitled “The Global AMR Crisis: Is the scale of the action matching the scale of the threat?” With speakers including Hanan Balkhy (WHO), Ramanan Laxminarayan (CDDEP), Hon. Yasuhisa Shiozaki (multiple Cabinet-level roles in Japan’s government, Prof. Lothar H. Wieler (President, Robert Koch Institute), David Paterson (Director, U Queensland Centre for Clinical Research), Kevin Outterson (CARB-X), and me, this event will (i) discuss how the right incentives can simultaneously stimulate both improved patient access as well as innovation in anti-infectives and (ii) provide practical frameworks to support implementation of national action plans. Don’t miss this one … it is also the debut discussion of Kevin Outterson’s recently released report documenting the need for substantial global Pull incentives for antibacterial agents! Go here to register!
  • [NEW] 10 Nov 2021: (virtual, 3pm East Coast US): Health Affairs journal club Kevin Outterson’s recently released report documenting the need for substantial global Pull incentives as a part of the ecosystem that ensures a sustained pipeline of novel antibacterial agents. Link is pending — watch the Health Affairs Journal Club page for details.
  • 15-17 Nov 2021 (virtual, timings TBD but would expect global coverage): 3rd Call to Action on Antimicrobial Resistance: “Sharing evidence and best practice to empower national action.”
    • Building on the success of the previous Call to Action on Antimicrobial Resistance (AMR) conferences held in Berlin (2017) and Ghana (2018), the governments of Denmark, Colombia, Ghana and Zambia, with the International Centre for AMR Solutions (ICARS), UN Foundation, UNICEF, and the Wellcome Trust, are together organising a follow-up event to advance the response to rising rates of drug-resistant infections.
    • Go here for an  expression of interest form; contact the organizers at AMRCalltoAction@wellcome.org for other details.
  • [NEW] 16 Nov 2021 (virtual, 2-3.30p CET): Hosted by Reuters Events, this EFPIA-sponsored webinar entitled “Pandemic Prevention: how Europe can lead the fight against AMR” features a strong EU-focused panel (e.g., European Patients Forum, BEAM Alliance) with also CARB-X and the AMR Action Fund. Go here for full details, here to register.
  • [NEW] 17 Nov 2021 (virtual, noon-2p East Coast US): Duke-Margolis webinar entitled “Ensuring Pull Incentives for Priority Antibiotics Succeed.”  Mark McClellan will moderate; discussion will focus on (i) tailoring pull incentives for priority antibiotic development and (ii) the need for pull incentives beyond the US and UK. Of key importance, the webinar will feature a discussion of Kevin Outterson’s recently released report documenting the need for substantial global Pull incentives (for fully delinked models, these should be in the range $2.2 – 4.8b). Here is the agenda; go here to register.
  • 18-24 Nov 2021: World Antimicrobial Awareness Week (WAAW), sponsored by WHO. The theme is “Spread awareness, stop resistance.” Go here for details.
  • 1 Dec 2021 (virtual, 9a-1p UK): Westminster Health Forum policy conference “Tackling antimicrobial resistance in the UK and the UK’s role on the global stage.” Chaired by Kevin Hollinrake MP (Co-Chair, All-Party Parliamentary Group on Antibiotics, APPG-Antibiotics) and Professor the Lord Trees, Emeritus Professor, U Liverpool; and Treasurer, APPG-Antibiotics, this 5-h session includes keynotes from Dame Sally Davies and Haileyesus Getahun (WHO) and speakers spanning the UK’s AMR efforts. Go here to register.
  • [NEW] 1 Dec 2021 (virtual, 4-5p CET): Spotlight session at ISPOR 2021 entitled “Methods to Estimate the Value of New Antibiotics in the Context of Antimicrobial Resistance.” ISPOR is the International Society for Pharmacoeconomics and Outcomes Research and this spotlight session at their annual meeting will feature discussions of the modeling used by the UK in support of its “Netflix” delinked purchase pilot model. Go here to register if you are interested in the whole meeting; I am working to try to make this specific session free to access by streaming after the session.
  • 3 Dec 2021 (Boston, in person, 9a-6.30p, COVID vaccination required): 8th annual BAARN (Boston Area Antimicrobial Research Network) meeting. Go here for details; registration link is here.
  • 3 Dec 2021 (virtual, US daytime timings): Symposium entitled “Advances in Antibacterial Discovery” sponsored by the St. Jude Department of Chemical Biology and Therapeutics, is a part of the broader Bringing Chemistry to Medicine series and is supported by the St. Jude T32 Infectious Disease Therapeutics training program. Go here for details and to register.
  • [NEW] 8-9 Dec 2021 (virtual, 9a-noon East Coast US): ASM-ESCMID-sponsored joint conference on antimicrobial drug development. This is the 2021 online version of one of my favorite meetings and I strongly encourage attendance on both days to gain a perspective on how new reimbursement models are going to change the R&D landscape. Online agenda is here, registration link is pending so just mark your calendar for now.
    • [NEW] 8 Dec: “The New Winds Pushing and Pulling Antibacterial Development.” DO NOT MISS THIS ONE! Featuring (i) talks from the UK team behind the NHS “Netflix” pilot, (ii) Kevin Outterson’s recently released report documenting the need for fully delinked global Pull incentives to have a value of $2.2 – 4.8b, and (iii) speakers covering PASTEUR and work in the EU on pull incentives, this promises to be a key update for the whole community.
    • [NEW] 9 Dec: CARB-X – GARDP Boot Camp: What Makes a Good Project Succeed? Featuring speakers with many years of R&D experience, this session makes a good companion to the 8 Dec talk and will leave you well informed on best ways to guide your search for new antibiotics.
  • 3-6 Mar 2022 (Albuquerque, New Mexico): Biannual meeting of the MSGERC (Mycoses Study Group Education and Research Consortium). Details are here.
  • 6-11 Mar 2022 (Il Ciocco, Tuscany): Gordon Research Conference entitled “New Antibacterial Discovery and Development”. Go here for details, go here for the linked 5-6 Mar Gordon Research Seminar that precedes it.
  • 7-8 Apr 2022 (Basel and in person, we hope): The 6th edition of the annual AMR conference sponsored by the BEAM AllianceCARB-X, the Novo REPAIR Impact Fund, the IMI Accelerator, and the European Biotechnology Network. Go here for the hold-the-date page and a way to be kept informed about the meeting. 
  • 9-13 May 2022 (Athens and online): 40th Annual Meeting of the European Society for Paediatric Infectious Diseases, Go here for details.
  • 20-24 Sep 2022 (New Delhi): 21st Congress of the International Society for Human and Animal Mycology (ISHAM). Go here for details.
  • 25-28 Oct 2022 (Stellenbosch, South Africa): The University of Cape Town’s H3D Research Centre will celebrate its 10th anniversary with a symposium covering the Centre’s research on Malaria, TB, Neglected Tropical Diseases, and AMR. Go here to register.

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