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The Peculiar Economics of Developing New Antibiotics
HughPickens.com writes Every year at least two million people are infected with bacteria that can't be wiped out with antibiotics but the number of F.D.A.-approved antibiotics has decreased steadily in the past two decades. Now.Ezekiel J. Emanuel writes at the NYT that the problem with the development of new antibiotics is profitability. "There's no profit in it, and therefore the research has dried up, but meanwhile bacterial resistance has increased inexorably and there's still a lot of inappropriate use of antibiotics out there," says Ken Harvey. Unlike drugs for cholesterol or high blood pressure, or insulin for diabetes, which are taken every day for life, antibiotics tend to be given for a short time so profits have to be made on brief usage. "Even though antibiotics are lifesaving, they do not command a premium price in the marketplace," says Emanuel. "As a society we seem willing to pay $100,000 or more for cancer drugs that cure no one and at best add weeks or a few months to life. We are willing to pay tens of thousands of dollars for knee surgery that, at best, improves function but is not lifesaving. So why won't we pay $10,000 for a lifesaving antibiotic?"
Emanuel says that we need to use prize money as an incentive. "What if the United States government — maybe in cooperation with the European Union and Japan — offered a $2 billion prize to the first five companies or academic centers that develop and get regulatory approval for a new class of antibiotics?" Because it costs at least $1 billion to develop a new drug, the prize money could provide a 100 percent return — even before sales. "From the government perspective, such a prize would be highly efficient: no payment for research that fizzles. Researchers win only with an approved product. Even if they generated just one new antibiotic class per year, the $2-billion-per-year payment would be a reasonable investment for a problem that costs the health care system $20 billion per year." Unless payers and governments are willing to provide favorable pricing for such a drug, the big companies are going to focus their R&D investments in areas like cancer, depression, and heart disease where the return-on-investments are much higher.
Emanuel says that we need to use prize money as an incentive. "What if the United States government — maybe in cooperation with the European Union and Japan — offered a $2 billion prize to the first five companies or academic centers that develop and get regulatory approval for a new class of antibiotics?" Because it costs at least $1 billion to develop a new drug, the prize money could provide a 100 percent return — even before sales. "From the government perspective, such a prize would be highly efficient: no payment for research that fizzles. Researchers win only with an approved product. Even if they generated just one new antibiotic class per year, the $2-billion-per-year payment would be a reasonable investment for a problem that costs the health care system $20 billion per year." Unless payers and governments are willing to provide favorable pricing for such a drug, the big companies are going to focus their R&D investments in areas like cancer, depression, and heart disease where the return-on-investments are much higher.
Okay, that bottle of antibiotics is $10,000. Now make sure you take every pill so resistance doesn't have a chance to take hold. Wait, you're just taking them until you're better and then selling them to people on the street?
Once an alternative approval process with sufficent credibility gets going, the story will change very fast.
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A bounty? No. Just give the money as grants to academic research labs applying to do a search for new antibiotics.
No hoping someone has the funding and inclination to try themselves, an if no, oh well. Give a job doing it directly to those interested in the project.
If the US wants pharma to develop new classes of antibiotics then the simplest method is to extend the patent from 20 to 30 years **providing that the drug qualifies as an antibiotic**.
This has the effect of a) incentivising pharma to spend on research in these classes of drugs and b) discouraging widespread abuse by disallowing generic implementations for at least a generation.
Job done! Next?
Tubby or not tubby. Fat is the question
If antibiotic development wanes long enough, eventually some rich people will be threatened by new infections for which there are no cures.
Once that happens, antibiotic development will instantly become a top priority for governance and major industry players.
And how many of us proles have to die before our lords and masters decide to piss some new antibiotics into our water supplies for us to use?
You will not drink with us, but you would taste our steel? - Walter Matthau, The Pirates
This (for quite a part) USED to be government work. Half/3 quarters of a a century ago, at least. Research, also into medicine, was university sponsored work and universities mainly got sponsored by government (at least in large swaths of Europe.... don't know how it was in the '50's/60's/70's in the U.S.A.) However in, 'first world' nations, those that actually 'have/had' resources to develop new drugs, things got privatized, subsidies got cut down because government spending had to be cut down because of .... because Republican/Liberals/howeveryouwanttonameit. Result: Drugs are left to the market and so only what the market sees as profitable gets developed.
Perfect, if you really like it that way, and according to election results, a lot of people in the developed nations think it's all roses (pun intended).
I'm not someone wanting everything and our lives state owned but I do vote socialist. Just because I see, time and again (and I'm not even fourty...), things the free market can not solve. Even in a 'perfect' capitalist system. Which, I'm afraid, we have not one of, in this world.
Public transport, Medicine, Communications/utilities/transportation infrastructure (emphasis on infrastructure, not services), Fundamental research/sciences, Nature development...
Some things you should do as a community, others you should leave to the free market.
And be damned, pay your f*cking taxes, all of you! Also the rich. Yes, I'm looking to you too. You should get enjoyment from living in a country where things are arranged properly. Your investments are worth double if you don't have to fear the troubles that come when a significant part of your fellow human beings live below the poverty line. Your spending into security should be insignificant in a well managed nation... How much extra does that dwelling in a gated community cost you? Talk about living in a cage...
I work for a company that makes Orphan drugs. Yes, they're ridiculously expensive. The reason is that the number of patients for our drugs number in the couple of thousands globally. Our workforce to run the entire plant, do QA, maintenance, regulatory administration and production processes etc numbers in the several hundreds. Those people need to be paid every month by what a couple thousand people pay for their meds every month.
And that is without taking into account that this entire plant was built for making this drug, which was an investment of hundreds of millions of dollars, with several millions annually for upkeep and maintenance.
I agree that we probably make a decent profit or we wouldn't be doing it.
However, if subsidizing we to stop, we'd just stop making it because with the numbers I mentioned above, it is impossible to make our drugs in a manner that would be affordable without it. And that would mean those people would simply die.