As the crisis in anti-infective medicine resistance draws closer, the fundamental problems with the existing model for incentivisation of antibiotic research grow ever clearer. Are there issues here with relevance for drug repurposing R&D?
As reported in a recent issue of Nature Biotechnology, the FDA is discussing with the Centers for Medicare and Medicaid Services new economic models for pharmaceutical R&D. The fundamental problem for antibiotic medicine is that the value to society is not related to the numbers of prescriptions, since widespread use in patients is likely to induce the development of resistance, exactly the problem that the new drug is supposed to solve. Previously, FDA incentives such as the 2012 GAIN (Generating Antibiotics Incentives Now) Act, as well as providing R&D funding failed to be sufficiently attractive for innovators. In essence, what is needed is a means of decoupling economic reward from sales volumes. Rather than a price per pill, the FDA is looking at a range of ‘pull’ incentives, including one model in which hospitals would pay a fixed ‘fee’, on an annual or monthly basis, for access to the drug.
While there are a range of ‘pull’ incentives being considered, and some debate among companies involved in anti-infective R&D as to the best mechanism, many observers are happy to work with any pragmatically achievable option rather than focus solely on the most commercially advantageous one. In practice, any proposal will face significant legislative hurdles in addition to regulatory ones. The US Congress is very nervous about piling additional financial pressures on the US Taxpayer, in an effort to support the publicly-funded component of the incentive that would attribute to US Healthcare, and politically nervous at anything which grants new commercial advantages to the large pharmaceutocal sector. Rather than a single model, many now recognize that a range of measures may be necessary, and different models may suit different healthcare systems across different countries.
Can we compare the commercial incentives necessary for new anti-infective research with the situation in drug repurposing? In the latter, we do not have a need to decouple reward from sales volumes, but to decouple reward from price levels. The inherent problem in many repurposing programmes is that the floor level for a repurposed product for a new indication is the generic price for a similar product in the original indication. Yet, from the the healthcare value perspective, the public health advantage from a new therapy could be as high in a secondary indication for an existing drug as for a new non-resistant antibiotic.
An ideal new reimbursement model for repurposed drugs would be one in which off-label generic prescribing could not substitute therapies in the secondary indication. Pricing would be appropriate for the new use, rather than one associated with the old product and old use. This is sometimes the case, even with old drugs. Thalidomide for example, was reimbursed for multiple myeloma, but the generic reference price was not relevant since the original product for use in morning sickness had either been withdrawn, or (as in the USA) never actually marketed. Faced with no generic competition, pricing for the myeloma therapy is set to the value of the product in this indication, and it has been a multi-billion dollar blockbuster product for Celgene.
In the model outlined in ‘Off-label Prescribing‘, I suggested that reimbursement be differentially set according to indication at the pharmacy level. These different prices should be agreed between manufacturer and payer, in the normal way. However, importantly, the actual product that is prescribed is defined by indication. This can be achieved in the following way; firstly, it is entirely reasonable that a patient should know his/her diagnosis, and this should be written on the prescription (which is not generally the case at the moment). If there are confidentiality concerns, it may be written in a part of the prescription that can be torn off. Then, the paper prescription is presented to the pharmacist, who scans a bar code, and this specifies whether generic substitution is permitted, or whether a brand name alternative is mandated. This switch is determined according to the use of the drug, with generic substitution allowed for certain uses, and brand name prescribing for others.
The alternative of a ‘pull’ mechanism might work for specific situations of high medical need, but is unlikely to work for most cases of repurposed drugs. ‘Pull’ mechanisms work where society wishes to attract resources for specific areas of R&D that are commercialy unattractive: these are likely to be defined by therapeutic area. Though there are deficiencies in the economic model for drug repurposing, they are not confined to specific areas; in fact, they apply generally across all potential areas of medicine. We need a better mechanism to address these deficiencies that reflect the improved efficiency that repurposing offers. This mechanism should focus on the reimbursement process rather than ‘pull’ incentives.