Can a Federally Funded ‘Netflix Model’ Fix the Broken Market for Antibiotics?

Recent shortages of amoxicillin, an effective antibiotic that pediatricians have long relied upon to treat strep throat and ear infections in children, have put a spotlight on an urgent global threat: the world’s shrinking arsenal of potent antibiotics and the lack of incentives to develop them.

The broken marketplace for new antimicrobial drugs has stirred debate over a bill, languishing in Congress, that would dramatically reconfigure the way antibiotics are discovered and sold in the United States.

The $6 billion measure, the Pasteur Act, would upend the conventional model that ties antibiotic profits to sales volume by creating a subscription-like system that would provide pharmaceutical companies an upfront payment in exchange for unlimited access to a drug once it is approved by the Food and Drug Administration.

Some call it the Netflix model for antibiotics.

The measure attempts to address the vexing economics of antibiotics: Promising new drugs often gather dust on pharmacy shelves because health providers would rather save them for patients whose infections don’t respond to existing ones. That’s because the more frequently an antibiotic is used, the more quickly it will lose its curative punch as the targeted bacteria develop the ability to survive.

New antibiotics also tend to be expensive, a disincentive for hospital-based prescribers who will often turn to cheaper ones, making it even harder for drug companies to earn back their initial investmentAside from the shortages of drugs that still work, the shrinking toolbox of effective antimicrobials has become a silent global crisis that claims nearly 1.3 million lives a year. By 2050, the United Nations estimates that drug-resistant pathogens could kill 10 million people annually.

“If we want antibiotics to work for our kids, our grandkids or ourselves in 10 years, we have to invest in the infrastructure today,” said Kevin Outterson, executive director of CARB-X, a nonprofit that provides funding for small biotechs developing novel antibiotics.

By separating profits from sales volume, supporters of the bill hope that prescribers will save new drugs for patients whose infections are resistant to existing medications. Limiting their use, experts say, can help extend the life of a new antibiotic before evolutionary pressure creates a “superbug” all but impervious to available antimicrobials.

The bill, a decade in the making, has bipartisan support and is widely backed by researchers, health care policy experts and drug company executives. But as momentum for the bill has gained steam, opposition has emerged from a small group of doctors and health care advocates, many of them critics of Big Pharma. They say the bill is a drug-industry giveaway — and unlikely to address the problem of antibiotic resistance.

Senator Todd Young, a Republican of Indiana, is one of the bill’s co-sponsors. Credit…Michael A. McCoy for The New York Times

The legislation’s prospects seemed grim in the final weeks of a lame duck session during which lawmakers often race to push through unfinished legislation. Concerns over cost had already prompted mainly Republican lawmakers to reduce its price tag by $5 billion, and Congress has been anxious to push through a final spending deal before the holidays.

“The Covid-19 pandemic demonstrated America’s vulnerability to catastrophic public health crises, and it highlighted the urgency of taking reasonable measures to prevent them in the future,” Senator Todd Young, an Indiana Republican and one of the bill’s co-sponsors, said in an email. “The next public health crisis is already here: the emergence of bacteria resistant to antibiotic treatment.”

In a letter to Congress in November, opponents of the measure said it would encourage the development of ineffective drugs, in part because of what they describe as flaws in the F.D.A.’s existing approval process for antibiotics. “Under the Pasteur Act, taxpayer dollars will be wasted as a blank check to pharmaceutical manufacturers for antimicrobials of limited benefit,” they wrote.

One of the signers, Dr. Reshma Ramachandran, an assistant professor at the Yale School of Medicine, said the bill leaves in place a regulatory regimen for antibiotics that she and others contend allows companies to market drugs of questionable value. Her objection to the status quo centers on a central tenet of the F.D.A.’s antibiotics review process: New drugs can be approved under a concept known as noninferiority, which allows novel medications to be less effective than existing ones. Dr. Ramachandran, whose work focuses on antimicrobial resistance and health policy, and other critics of the bill said that the F.D.A. should adopt a system that requires drugmakers to prove that new antibiotics are superior to current ones.

“As a clinician, it’s a huge concern for me that we could have new costly drugs on the market without regulatory oversight to actually ensure these drugs are clinically meaningful or that they even address resistant infections,” Dr. Ramachandran said.

Many experts, however, say that such an approach is impractical and raises ethical questions. To establish whether a new antibiotic is superior to existing ones, researchers would have to conduct clinical trials that test the new therapy against a placebo or a drug they know to be less effective. For study participants battling an infection, getting a placebo or an inferior drug could prove deadly.

“This whole superiority notion makes no sense. We don’t hold any drug to that standard,” said Kenneth E. Thorpe, a health policy official in the Clinton administration who is an adviser to the advocacy group Partnership to Fight Infectious Disease. “We need to spur innovation and get as many novel antibiotics as we can given the diversity of infections and the threat to human health if we fail.”

Mr. Thorpe and others say that criticism of the legislation overlooks a key provision: The decision to fund any antibiotic must consider whether the drug meets a critical need. Such a determination will be guided by a panel of experts from the Department of Health and Human Services, the Centers for Disease Control and Prevention and a half-dozen other federal health agencies. The system would mirror the advisory committees that guide decision making at the F.D.A.

“Components of the bill are designed to ensure this valuable funding goes to the right drugs,” said Dr. David Hyun, who directs the Antibiotic Resistance Project at the Pew Charitable Trusts.

Diane Shader Smith, right, with her daughter, Mallory Smith, as seen in the documentary “Salt in My Soul.” Mallory Smith died in 2017 from a drug-resistant infection when she was 25.Credit…Giant Pictures

Over the 10-year life of the legislation, the federal government would make payments ranging from $750,000 to $3 billion to companies making “critical need antimicrobials.” An analysis by the Center for Global Development estimated that the $6 billion price tag for the legislation would yield $32 billion in savings over a decade and save 20,000 lives in the United States and 518,000 around the world.

It can cost a $1 billion or more to bring a new drug to market, but earning back that investment has proved increasingly elusive. Unlike blockbuster medications for chronic conditions like diabetes or high blood pressure, most antibiotics are prescribed for just days or weeks. Many hospitals, unwilling to pay the high prices that accompany new therapies, prefer to rely on cheaper but less effective options, experts say.

A number of antibiotic start-ups have gone bankrupt in recent years, sending a chill through the industry.

The crisis has barely pierced the public’s consciousness, in part because many of those who succumb to drug-resistant infections are already battling other health problems. When a cancer patient dies from drug-resistant bacterial pneumonia, family members are likely to blame the cancer, not the infection.

Diane Shader Smith has a firsthand appreciation for the challenges of trying to draw attention to abstract threats like antimicrobial resistance. Five years ago her daughter, Mallory, who had cystic fibrosis, died at 25 from a drug-resistant lung infection she contracted at age 12. The coroner noted her cause of death as cystic fibrosis.

“I know what it’s like to live with a superbug and the damage it does to patients and their families,” said Ms. Shader Smith, a writer from California who has spent the past few years raising awareness about resistant infections.

“I may end up in the hospital one day for a hip replacement, melanoma or some other illness, and I don’t want to contract an untreatable superbug,” said Ms. Shader Smith, who last month wrote a column in USA Today, urging Congress to pass the Pasteur Act. “The truth is that drug-resistant infections are a threat many of us will face at some point in our lives. The hard part is getting that threat to penetrate the consciousness of Americans.”

Emily Cochrane contributed reporting from Washington, D.C.

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