By: Melissa Stundick, Senior Vice President, Business Development
June 16, 2021
PASTEUR Act Reintroduced – A Bold, Potentially Transformative Approach to Addressing the Threat of Antimicrobial Resistance
Yesterday an important step forward occurred for all of us looking to combat antimicrobial resistance (AMR). The Pioneering Antimicrobial Subscriptions To End Upsurging Resistance Act, otherwise known as the PASTEUR Act, was re-introduced in Congress by a bipartisan set of cosponsors. The PASTEUR Act aims to incentivize the antimicrobial pipeline by making developers of “critical need antimicrobial drugs” eligible to receive a subscription contract from the U.S. government that could provide the predictable return on investment necessary to revitalize antibiotic R&D.
• Calls for the establishment of a committee that will develop a prioritized list of infections for which new antimicrobial products are needed and will outline a value-based set of characteristics for antimicrobial drugs treating one of these infections
• Sets up a system of subscription contracts totaling up to hundreds of millions of dollars for each critical need antimicrobial drug
• Creates an incentive that encourages stewardship and delinks the return on investment from the number of treatment courses sold
The PASTEUR Act represents the type of bold solution that society needs to be prepared for the next infectious threat. We see this as the right solution for patients and for our health care system for a few reasons.
Combating Antimicrobial Resistance is a wide-ranging global problem
The World Health Organization has declared that AMR is one of the world’s top 10 public health problems facing humanity. A report commissioned by the UK Prime Minister projected that by 2050 AMR will cause 10 million deaths per year globally at a cumulative cost to the world economy of 100 trillion dollars. For reference, the Johns Hopkins Coronavirus Resource Center data suggests 3.8 million people have lost their lives to COVID-19 since the start of the pandemic.
PASTEUR is a transformational solution that can work
Uniquely addresses the challenges that drug developers face when creating medicines to combat AMR
• Payment Timing is Optimal: PASTEUR payments would be received by the development company at the exact time when they are needed the most – immediately after drug approval and for the first several years of launch. The small to medium-sized companies driving discovery, development, and now commercialization of nearly all newly approved antibiotics are pre-revenue companies. Building out a commercial infrastructure and launching a drug will be the most expensive time-period in the company life cycle until that point. We have seen recent bankruptcies in the space during this exact time-period because the companies could not raise enough money through traditional financing mechanisms to sustain their operations far enough into the launch curve to start generating a meaningful revenue.
• Meaningful Total Contract Value: PASTEUR Act payments to a single company over time are intended to be sufficient to truly offset the substantial post-approval costs which include, but are not limited to: newly building and operating a commercial infrastructure, maintaining a supply chain of drug, clinical microbiology testing and surveillance, as well as funding regulatory post marketing commitments.
• Promotes a Dynamic Ecosystem: Large pharma increases the dynamism of our drug development ecosystem. The collaborative efforts between biotech and large pharma to address COVID-19 have resulted in the delivery of medicines and diagnostics on a never seen before time scale. Large pharma’s contributions through the AMR Action Fund will surely help advance AMR products through clinical development. While these efforts are a great start, we also need incentives that hit post-approval for the exact reasons mentioned above. Subscription contracts contemplated within PASTEUR create a powerful incentive by reducing the opportunity cost of investing because of the much higher probability of return on investment. If PASTEUR is passed, large to mid-size pharma executives would be able to more easily justify investment because the path to profitability would be much clearer. PASTEUR payments are also likely to build investor confidence in the therapy area for the same reason.
• Encourages Stewardship: PASTEUR provides resources to hospitals to strengthen their stewardship programs and promotes a payment system that delinks the possible return on investment from a single antimicrobial product from the number of units sold. Subscription models are already being piloted in the UK and Sweden. PASTEUR will offer a similar construct here in the U.S. Critics of reimbursement reform argue that if the treatment course price of an antimicrobial product is raised, that only incentivizes a company to try to sell more drug. More drug = more profit. Antimicrobials are unique in that the more that they are used, the more likely bugs are to develop resistance against them. For that reason, the use of a new antimicrobial product should be reserved for only those patients that have failed prior therapy. Spero has a strong corporate commitment to stewardship and educating the medical community on appropriate use of Tebipenem is a cornerstone of our launch plan.
Bold changes work
The passage of the Generating Antibiotic Incentives Now (GAIN) Act in 2012 was one important contributing factor to the formation of Spero Therapeutics in 2013. The GAIN Act incentivizes new antibacterial and antifungal development by granting five years of market exclusivity to medicines designated as qualifying infectious disease products (QIDP) – products that can treat or prevent disease caused by a list of pathogens that have the potential to cause a serious public health threat.
Government funding through grants and contracts has also been critically important for antimicrobial development companies. Since the inception of BARDA’s Antimicrobial Program in 2010, the agency has invested over $1.5B in 28 antibacterial product candidates. Similarly, CARB—X, a program operated by Boston University and funded by BARDA, NIAID, the Wellcome Trust, Gates Foundation, as well as the UK and German governments, has invigorated early-stage antimicrobial research. CARB-X aims to invest $480M between 2016-2022 and, to date, has funded 89 antimicrobial programs. A large percentage of all antimicrobial products developed over the past decade have been developed in partnership with BARDA and/or CARB-X. The support of these agencies has successfully revived a struggling pipeline.
Since 2012 when the GAIN Act was passed, drug developers have brought 14 new medicines to market that are positioned to treat antimicrobial threats. This is impressive, and evidence that big solutions make a difference, but still not enough to cover the current and future AMR threat to public health. PASTEUR, if signed into law, will take the final step in providing a post-approval incentive that is needed to ensure products that graduate from CARB-X, to BARDA or the AMR Action Fund, to approval will successfully be launched and sustained in the marketplace.
Where we go from here – call to action
Big social problems such as this one require comprehensive solutions – PASTEUR is a pragmatic approach to incentivize investment in a sustainable antimicrobial pipeline now and into the future. Please join Spero and our colleagues across the antimicrobial ecosystem including IDSA, BIO, Pew in urging Congress to advance the PASTEUR Act. We encourage you to call the United States Capitol switchboard at (202) 224-3121 and request to be connected to the offices of your state and local representatives. Please stress “the importance of PASTEUR Act passage to incentivize investment in antimicrobial R&D and ensure a sustainable pipeline of therapeutics to address the current and worsening “silent pandemic” of AMR”.
Special thanks to Amanda Jezek of the Infectious Disease Society of America and the Spero team for their contributions