Legislative Update: Incentivizing Discovery and Development Investment into Novel Antimicrobial Drugs

Kilpatrick Townsend & Stockton LLP

According to the Centers for Disease Control and Prevention (CDC) 2019 report Antibiotic Resistance Threats in the United States (“CDC Report”), “more than 2.8 million antibiotic-resistant infections occur in the United States each year, and at least 35,000 people die as a result.” CDC, Antibiotic Resistance Threats in the United States (2019). (CDC Report). Globally that number has been put at 700,000 deaths per year, and a 2019 United Nations interagency group report on antimicrobial resistance estimated that number could reach 10 million a year by 2050 based on current trends. United Nations Interagency Coordination Group on Antimicrobial Resistance, No Time to Wait: Securing the Future from Drug-Resistant Infections (2019). (UN Interagency Report). The recent pandemic has only increased concerns, including for opportunistic infections of those with compromised immunity.

Despite growing alarm concerning antibiotic-resistant infections in the late 20th Century, a review of investigational new drug applications (INDs) for new, systemically acting antibacterial drugs between 1980 and 2019 revealed a decline by two-thirds from a peak of 39 active INDs in 1987 to a low of 13 in 2001. Nidhi Dheman, et al., An Analysis of Antibacterial Drug Development Trends in the US, 1980 – 2019, Clinical Infectious Diseases ciaa859 (2020), https://pubmed.ncbi.nlm.nih.gov/32584952/. (Dheman 2020).

In an effort to reverse this trend, in 2012, Congress enacted the Generating Antibiotic Incentives Now (GAIN) Act to promote the development of Qualified Infectious Disease Products (QIDPs). 21 U.S.C. § 355f. QIDPs target “serious or life-threatening infections” caused by a group of specified pathogens, as determined by the Secretary of HHS. 21 C.F.R. § 317.2. The GAIN Act provided incentives to drug sponsors in the form of 5-year exclusivity extensions for QIDPs on top of all non-patent exclusivities available through the Hatch-Waxman and Orphan Drug Acts. The Act also made QIDPs automatically eligible for priority review (6-month FDA review targets rather than 10-month (Priority Review, FDA, https://www.fda.gov/patients/fast-track-breakthrough-therapy-accelerated-approval-priority-review/priority-review (content current as of 01/04/2018) (Priority Review) and fast-track designation (more frequent communication with FDA, rolling review, eligibility for accelerated approval (Fast Track, FDA, https://www.fda.gov/patients/fast-track-breakthrough-therapy-accelerated-approval-priority-review/fast-track (content current as of 01/04/2018); Accelerated Approval, FDA, https://www.fda.gov/patients/fast-track-breakthrough-therapy-accelerated-approval-priority-review/accelerated-approval (content current as of 01/04/2018)) ((Fast Track); (Accelerated Approval)).

Despite the incentives set up by the GAIN Act, the number of antibacterial INDs initiated with the FDA from 2010-2019 was lower than in any of the preceding three decades. Dheman, supra. (Dheman 2020). And perhaps more alarming, the number has been steadily dropping in recent years, such that as of the end of 2019, the number of active antibacterial INDs had declined to an 11-year low. Id.; Jonathan Slater, QIDP: What Have We GAINed, Pharma Intelligence (2019). (2019 PI White Paper).

Authors considering the limited impact of the GAIN Act on drug development dollars have identified various contributing factors. For example, despite the legislative intent apparent from Congressional deliberations to address unmet medical needs presented by drug-resistant pathogens (158 Cong. Rec. S3389-3400, S4610-4627) ((1, 2)), the FDA did not limit the list of “qualifying pathogens” to those that were inadequately treated with existing medicines, permitting QIDP designation for drugs for which existing treatments were generally effective. Jonathan J. Darrow & Aaron S. Kesselheim, Incentivizing Antibiotic Development: Why Isn’t the Generating Antibiotic Incentives Now (GAIN) Act Working? 7 Open Forum Infectious Diseases ofaa001 (2020), https://academic.oup.com/ofid/article/7/1/ofaa001/5716891. (Darrow 2020). When competing against existing inexpensive generic products, QIDPs with no demonstrable benefit have struggled to gain market penetration. Id. (discussing the case example of newly approved plazomicin’s failure to displace the generic meropenem market).

Additionally, the impact of the 5-year GAIN exclusivity boost on net present value of revenue streams is at its highest for modifications (e.g., new indications) of known drugs (3-year exclusivity) and significantly lower for new chemical entities (5-year exclusivity) and orphan drugs (7-year exclusivity), arguably disproportionally incentivizing lower development cost products over novel chemical agents. Id. (Darrow 2020).

It is true that the majority of QIDP products have been new formulations, combinations, and uses of known drugs rather than novel compounds. Slater, supra. (2019 PI White Paper). Indeed, it appears that no new chemical entity antimicrobial products were approved in 2020. Novel Drug Approvals for 2020, FDA, https://www.fda.gov/drugs/new-drugs-fda-cders-new-molecular-entities-and-new-therapeutic-biological-products/novel-drug-approvals-2020 (content current as of 01/13/2021) (FDA List of New Drugs). At base, however, this trend, and the continued diminished investment into antibiotic drug discovery, manifest the inability of the GAIN Act incentives to counter the fundamental challenge in recouping investment presented by standard medical practice of using new antibiotics “judiciously to preserve their effectiveness.” ASM Offers Endorsement of Pasteur Act, American Society for Microbiology, (Dec. 17, 2020), https://asm.org/Articles/Policy/2020/December/ASM-Offers-Endorsement-of-PASTEUR-Act (ASM Letter); see also Benjamin Plackett, Why Big Pharma Has Abandoned Antibiotics, 586 Nature S50-52 (2020). (Plackett 2020). According to the American Society for Microbiology, it is this market barrier that “ha[s] driven nearly all large pharmaceutical companies from antibiotic research and development and have left smaller companies struggling to stay in business.” Id. (Indeed, a 2020 Pew review found that only 1 of the 35 companies with antibiotics in clinical development at the time was among the top 50 pharmaceutical companies by sales. Tracking the Global Pipeline of Antibiotics in Development, April 2020, Pew Trust (Apr. 15, 2020) https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2020/04/tracking-the-global-pipeline-of-antibiotics-in-development. (Pew Review). “Over 95 percent of the products in development today are being studied by small companies rather than the large pharmaceutical firms that once dominated this field.” Id.

A recently introduced bill seeks to tackle this market defect head on. With everything that was happening in December, it would have been easy to miss the introduction of S. 4760: The PASTEUR Act. On December 9, U.S. Representatives Mike Doyle (D-PA) and Drew Ferguson (R-GA) introduced the Pioneering Antimicrobial Subscriptions to End Upsurging Resistance (PASTEUR) Act to encourage the development of critically needed antimicrobials and antibiotics. The PASTEUR Act, S. 4760, 116th Cong. (2020); Congressmen Doyle & Ferguson Introduce PASTEUR Act to Promote New Antimicrobial Drugs, U.S. Congressman Mike Doyle (Dec. 9, 2020), https://doyle.house.gov/media/press-releases/congressmen-doyle-ferguson-introduce-pasteur-act-promote-new-antimicrobial. (Bill); (Congressional PR).

At the heart of the PASTEUR Act is a “delinked” subscription program to encourage innovative antimicrobial drug development and ensure availability when needed. Moving away from volume driven payments (thus, delinked), the drug sponsor of a “critical need antimicrobial” will instead receive a payment of “not less than $750,000,000 and not more than $3,000,000,000” in exchange for patient access to the drug through Federal health programs at no cost.

Applications for critical need antimicrobial designations may be filed within 5 years of drug approval and will be reviewed by the Secretary of DHHS and a new Committee on Critical Need Antimicrobials to be made up of federal agency representatives, with input from a new Critical Need Antimicrobials Advisory Group that will include outside experts and patient advocates. Eligibility and contract size will be determined based on whether the antimicrobial drug is likely to provide certain “favored characteristics,” including:

  • treating a “prioritized infection” as determined by the Secretary, Committee, and Advisory Group, “taking into account infections for which there is an unmet medical need”;
  • improving clinical outcomes for patients with multi-drug resistant infections;
  • being a first-approved drug that treats certain multi-drug resistant infections, and, to a lesser extent, second and third drugs that treat such infections;
  • addressing an infection located in an organ or other location that is challenging to treat; and
  • addressing a multi-drug resistant infection through a novel chemical scaffold or mechanism of action, especially through oral administration.

Contracts will be paid out over a period of “no less than 5 years or greater than the greater of 10 years or the remaining period of time during which the sponsor has patent protections or a remaining exclusivity period with respect to the antimicrobial drug.” Every 2 years, the Secretary or sponsor “may request a modification of the amount of the contract based on information that adjusts favored characteristics.”

Drug sponsors must agree to certain requirements, including:

  • ensuring “commercial and Federal availability” within 30 days of first payment under the contract;
  • producing “the drug at a reasonable volume determined with the Secretary to ensure patient access to the drug”;
  • ensuring “a reliable drug supply chain, where any interruption to the supply chain will not last for more than 60 days”;
  • tracking and reporting drug resistance data,
  • submitting “a plan for registering the drug in additional countries where an unmet medical need exists,”
  • supporting appropriate use education for health care professionals and patients; and
  • “price the drug at a price that is not lower than a comparable generic drug.”

The Bill also contemplates a transition period while regulations are being finalized, during which the Secretary may enter into “transitional subscription contracts of up to 3 years in length” with sponsors of drugs treating infections in the CDC Report, QIDPs, “similarly innovative biologic antimicrobial drugs,” and “innovative drugs that achieve an antimicrobial outcome through immunomodulation,” provided that the “Secretary determines that the antimicrobial drug demonstrates a significant clinical advancement in treating an infection for which there is an unmet clinical need, an anticipated clinical need, or multidrug resistance.” Sponsors receiving these contracts must adhere to most of the same requirements noted above concerning drug availability, resistance tracking, appropriate use education, etc.

The bill currently contemplates $11 billion in initial funding to support the program with the Government Accountability Office carrying out a study on the program’s effectiveness within 6 years.

The bill has plenty of support from the biopharma and medical communities, so with luck, it will get attention in the new Congress.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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