New Reimbursement Scheme for New Antibiotics Needed: FDA
Severing FDA’s historical independence from drug economics, commissioner Scott Gottlieb has suggested that new innovative payment/reimbursement mechanisms should be developed to allow drug companies to capture a greater upfront share of the social value of antibiotic drug development. In a 9/14 post, Gottlieb indicated that the agency is worried that many large pharmaceutical companies have moved away from antibiotic research. “I’m deeply concerned that without stronger ‘pull’ incentives that encourage more research and development, we’ll see a far less robust pipeline of products than we need to address antimicrobial resistance,” he said. “The problem is that the ideal drug is one that will be seldom used.”
Given that the current reimbursement scheme for drugs is based on the number of prescriptions that get written, Gottlieb wrote that there is a disincentive for firms developing a medicine to treat multi-drug resistant microbes because the goal is to hold such a drug in reserve and try not to use it. “But holding a drug in reserve also shrinks product revenues early in its patent life, when those revenues are most valuable to companies and investors,” Gottlieb noted. “So the economics of this category, and our public health prerogatives, are not entirely in sync.”
Gottlieb suggested that reimbursement reforms could include a combination of milestone payments and subscription fees for drug developers targeting multi-drug resistant organisms. “A subscription-based model could see hospitals paying a flat rate for access to a certain number of doses of an important new antimicrobial,” he said. “These subscription fees could be priced at a level to create a sufficient return on the investment to develop drugs with a certain profile. This should have the effect of creating a natural market for drugs that meet certain important specifications. The FDA is discussing potential approaches, and continued innovation in similar payment pilots, with other agencies, including CMS. New approaches to reimbursement that could be explored might also include new technology add-on payments for certain new antibacterial drugs that meet critical patient and public health needs.”