April 25th, 2018
Can billion-dollar antibiotics and stewardship co-exist? In an era where we are seeing increasing resistance to antibiotics it seems intuitive that there would be large market opportunity for new, effective antibiotics. However, peak year sales of recent launches haven’t lived up to expectations. What has led to the seeming bifurcation of commercial success and stewardship, and how do we fix it?
Pipeline selection is focused on three areas:
1. Unmet need and differentiation
2. Target population and strong value proposition
3. How and where antibiotic is reimbursed matters
Focusing on unmet need and differentiation is critical
It is very important for an asset to have strong differentiation from competing products and also a high perceived unmet need. The anti-infective industry has lacked both in recent years in antibiotics. Its focus has been on seeking “me too” approvable drugs versus bringing drugs to market with innovation and differentiation. In the last two decades, more than half of the antibiotics launched have had moderate to low differentiation in areas of low unmet need.
The sales numbers reflect this segmentation. Antibiotic launches are a fraction of sales of other products and are as much a reflection on asset selection as it is stewardship.
Focus on targeted population and building a strong value proposition
Antimicrobial stewardship aims to achieve optimal clinical outcomes related to antimicrobial use, while minimizing adverse events, reducing costs, and limiting the selection of antimicrobial resistant strains. This effort is good for patients and is here to stay as a part of clinical practice. With this as the backdrop, we as drug developers see an opportunity to balance the need for stewardship with the financial requirements to power drug development and build a successful business. We break this down into three important steps:
Right patient + right value = aligned incentives for stewardship
- Who is the right target population for the drug? Can your agent demonstrate safety and efficacy advantages over standard of care? Ensure your clinical trial includes your target population. Supplement this with microbiology data or Phase IV or investigator-initiated trials to support the use in that population.
- Does the product reduce costs for healthcare system? Does it prevent hospitalizations, reduce length of stay or eliminate the need for certain lab tests or services? Does it bridge the IV-to-oral gap? Creating your value proposition in your targeted population is an essential part of your development plan and should not be overlooked. We as drug developers need to supplement our pivotal studies with relevant health economics rationales for the agent.
- What can the company do to reduce “excessive” use? Be responsible in how and where your drug best fits. Resistance trends are often the key driver in determining appropriate use. If we target the appropriate population where generics are not viable and create a significant value proposition for cost savings for the payers, then we have aligned incentives to utilize the product appropriately and protect the long-term usage in patients of the products for which we have heavily invested in.
How and where antibiotic is reimbursed matters – Community vs. Hospital Focus
The setting of care is important and more specifically who pays matters. One of the major areas of debate has centered around the reimbursement for antibiotics in the hospital setting. Hospitals face the challenge of a fixed payment system in the DRG world. Convincing hospitals to put a premium priced drug on their formularies in a fixed-payment environment is a challenge, even if backed by the most solid clinical data. Hospitals, already operating on tight margins, are responsible for any expenses incurred beyond the flat reimbursement rate they currently receive under longstanding DRG system. Therefore, an oral antibiotic that can shorten the length of hospital stay should have a significant pharmacoeconomic value. Similarly, an oral drug that prevents hospitalization and thus shifts the payment to the retail setting is a key to success. In the graphic below, all three of the products in the $1B column were commercially successful in part because their ease of use supported a shift from inpatient to outpatient care whereby reducing overall costs and reducing further exposure to the hospital setting that could lead to further complications. Focusing on unmet need and receiving reimbursement outside the fixed DRG payment system, especially when an asset is able to shift care outside of the hospital, is a value winner.
Blockbuster Anti-infectives Share Common Attributes
*IMS sales data for peak year Global Sales; Zyvox®, Cubicin®, Levaquin®, Tygacil® are actual sales and remaining product are projected peak year sales.
Pulling it all together
In conclusion, embracing stewardship allows the anti-infective industry to protect the products it has worked so hard to develop. It can also support value-based pricing, accentuated by the ability to shift care to the outpatient setting. Understanding the unmet market needs and seeking assets that are differentiated and don’t compete with generics is key. Second, be selective in your targeted population. Marry the unmet need to the targeted group most appropriate for your drug that provide clinical and economic value to the system. Finally, focusing on reimbursement model that isn’t under the DRG fixed payment umbrella especially where an asset can shift care from the inpatient to outpatient setting. Incentives for preventing hospitalization and/or reducing length of stay help the entire healthcare payer system economically to off-set those costs. In our opinion, asset selection process should be based on these principles and make for a differentiated approach to first to market product selection and pipeline building.
Below is a summary where we see the opportunities based on unmet need, moderate/low competition and billion-dollar addressable markets.
(a) The proportion of prevalence that are resistance to all/most generic options
(b) Days of treatment range from 7 – 10 per indication, with exception of NTM at 270 days.
Sources: IMS/Quintiles market assessment 2017; Clarion Market Assessment 2017; Decision Resources Gram Negative 2015; AMR Data 2015; CDEEP, AAFP; Postgrad Med., 2010;12(2):130-141. J Antimicrob Chemother 2013;68: 4–11; Antimicrobial Agents and Chemotherapy 2014;58 (4): 2469 – 2471
About the Authors:
Chief Operating Officer of Spero Therapeutics
David Melnick, M.D.
Chief Medical Officer of Spero Therapeutics
Keith A. Rodvold, Pharm.D., FCCP, FIDSA
Professor of Pharmacy Practice and Medicine
Colleges of Pharmacy and Medicine
University of Illinois at Chicago