FDA Chief Proposes New Pricing Model and Cites New Guidelines to Spur Antibiotic Development

June 13, 2018

On Tuesday, FDA Commissioner Scott Gottlieb released a statement on the effort to aid much-needed antibiotic development. In the statement, Gottlieb proposed a unique pricing model intended to provide manufacturers with a more predictable market and ROI.

Gottlieb proposed a licensing model for access to new anti-microbial drugs as opposed to the current system where drugs are paid for on a per use basis. This is similar to the way that companies will often pay for a license to install software a certain number of times.

Gottlieb said, “Under such a model, the acute care institutions that are most likely to prescribe these medicines would pay a fixed licensing fee for access to the drug, which would offer them the right to use a certain number of annual doses. This is similar to the way that software often gets reimbursed, where institutions pay a licensing fee for a fixed number of installations. We have been speaking with our counterparts at CMS as to whether such an approach is feasible, whether it can be formulated as a demonstration, and as a demonstration, whether it would have the intended public health benefits.”

CMS is the the Centers for Medicare and Medicaid Services. The proposed model would change the way they reimburse institutions and would have to be embraced by critical care hospitals and manufacturers alike. Gottlieb believes that the model would address a number of issues that stand in the way of new antibiotic development.

Currently, the use of new antibiotics is often highly restricted to delay the development of microbial resistance. While this represents good stewardship of the new drugs, it does not provide manufacturers with the incentive to invest in costly new drug development. The new model could help to both provide manufacturers with a reliable ROI on new antibiotic development and provide health care providers access to new drugs needed to fight resistant infections.

It is unusual to see the FDA proposing changes to the drug pricing models. This highlights the seriousness of the problem we are facing with the declining number of drugs available to treat infections. In the statement, Gottlieb also discussed other ways the FDA is attempting to spur development.

One means to encourage development is implementing special incentives authorized by Congress. “This includes the qualified infectious disease product (QIDP) designation. Under this program, new drug applications that are designated as QIDP can receive fast track designation, priority review designation and a possible five-year extension of any exclusivity that the application qualifies for upon approval.”

Additionally, Gottlieb noted that the FDA had just issued draft guidance on utilizing the new LPAD (Limited Population Pathway for Antibacterial and Antifungal Drugs) pathway established by Congress to assist in the development of new antibiotics.

Gottlieb said, “This draft guidance, when finalized, will support drug development by describing the criteria, processes and other general considerations for drugs approved under the LPAD pathway. In reviewing an application submitted under the LPAD pathway, the FDA will consider the severity, rarity or prevalence of the infection that the drug is intended to treat. The agency will also consider the availability or lack of alternative treatment in the limited population.”

The problem of antibiotic resistance is becoming more serious. As Gottlieb notes, in the US alone, over 2 million people a year become infected with bacteria that are resistant to antibiotics. Some 23,000 people die as a result of those infections.

Though not mentioned in the statement the FDA is also seeking other options to address resistant bacteria. On July 10 and 11 the FDA will host a workshop to discuss bacteriophage therapy. Bacteriophages are viruses that infect bacteria and have been used in some cases to successfully treat infections when all other options have failed. Information on the workshop can be found here

Gottlieb's entire statement can be found here

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