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Big pharma, battling COVID-19, looks to ‘buy time’ on another health crisis: superbugs

Eli Lilly used to be big on antibiotic development. But like many of the world’s largest drug companies, it pulled back over time due to challenges getting a return on investment.

These exits have contributed to one of the most pressing global health crises: a scarcity of new antibiotics and antimicrobials, at a time when superbugs resistant to current treatments are on the rise. Last year, health experts warned that, if left unaddressed, drug-resistant diseases could result in 10 million deaths annually by 2050.

Against this backdrop, and as they grapple with a historic pandemic, leading drug companies announced Thursday a partnership that has raised nearly $1 billion, with the aim of having two to four new antibiotics available by 2030.

“COVID-19 came along while we were discussing this, and I think for us really crystallized the impact of public health crises and the incredibly important role this industry has in addressing those,” Lilly CEO David Ricks said during a virtual event announcing the launch of the Antimicrobial Resistance Action Fund. STAT previously reported the fund was being developed.

The fund lists 22 drug company participants, including industry leaders like Amgen, Johnson & Johnson, Merck & Co., Pfizer, Roche and Novartis. According to executives from some of these companies, the fund will help them work with philanthropies, global banks, and multilateral organizations to improve antibiotic development.

And in particular, the fund will focus on providing money and guidance to the small- and medium-sized biotechs developing these new antimicrobial agents. Ricks said the big pharma backers can “continue their own efforts, but can also add to the external pipeline” that is “currently languishing due to lack of access to capital.”

“The fund’s really being developed to buy time,” Ricks said, noting there are biotechs at work on promising new science and antibiotic drugs. “Without this fund … ideas will wither on the vine, they won’t progress, and we’ll have lost another generation of new possibilities to arrest antimicrobial resistance.”

While $1 billion isn’t much in the expensive area of drug development, the fund’s money could be the difference between staying afloat and going under for smaller companies. Among the unusually large number of biotechs that filed for bankruptcy in 2019 were three antibiotic drug developers, Achoagen, Aradigm and Melinta.

Big pharma executives stressed, though, how the fund won’t solve the problem by itself. They called on governments and other healthcare stakeholders to create better commercial incentives that would make investing in antibiotic drug development less risky.

“We’re seeing just too many companies active in this space failing because they can’t obtain venture capital funding. Or, if they make it to the market, they can’t make a return that allows them to continue,” said Ken Frazier, CEO of Merck, one of the few large companies that has continued investing in antibiotic research.

“If we can keep just a few key promising antibiotics moving and governments taking the right steps to fix this broken system, together we can make tangible progress in addressing the AMR challenge,” he said.

In the U.S., government agencies and policymakers have tried to establish incentives for antibiotic development, but drugmakers contend there need to be more. One issue yet to be solved is that effective new antibiotics are used sparingly to stem the spread of drug-resistant superbugs, thereby limiting how much developers can earn.

Last year. Sen. Bob Casey, D-Penn., and Johnny Isakson, the former senator from Georgia, pushed a bipartisan bill called the DISARM act that would affect how Medicare reimburses antibiotics, which then could attract more investment from the industry.

Antibiotics makers may also take a page from other areas of drug development. U.S. state health agencies have been trying out “Netflix-style” subscription models in which the state pays for the an unlimited license to certain medicines. Last summer, the U.K. announced it would be testing a similar approach for antibiotics development. The agreements are a departure from the standard, volume-based way that most companies are reimbursed.

“Value-based agreements could be one of the ways [to incentivize], or subscription, Netflix-type of models can be also engaged,” said Albert Bourla, CEO of Pfizer, which is contributing $100 million to the fund.

“There are multiple things that can be done,” he added. “I think what is required is this good will and an understanding of how acute the issue is. The decisions we will make now will give results in many years. We don’t have time to wait, we have to act.”