How to fix a broken market in antibiotics - (Yahoo!Health via NewsPoints Desk)

  • In order to fight the problem of growing drug resistance, academic and industry experts say a new business model is needed that rewards pharmaceutical companies for developing new antibiotics even if they are rarely used, as reported in Yahoo!Health.
  • In recent decades, drugmakers have cut investments in antibiotics because of poor returns from a class of low-priced medicines that are only used for short periods. Currently, the world's biggest investor in the field today is Cubist Pharmaceuticals, whose annual research budget for antibiotics is $400 million.
  • The industry complains its antibiotics are severely undervalued, the news source said. For example, Johnson & Johnson's Sirturo was the first drug in 40 years to provide a new way to treat tuberculosis, yet sales are forecast by analysts to total just $75 million this year, while Gilead Sciences' hepatitis C drug Sovaldi is estimated to sell more than $8 billion.
  • According to the news source, the key challenge is how to reward companies for finding drugs like Sirturo that must be used as sparingly as possible, to avoid resistance developing, and essentially break the traditional link between payment and prescription volume.
  • However, Steve Gilman, chief scientific officer at Cubist, said "de-linkage is an interesting concept, but I'm not sure it is a practical concept…Who's going to come up with the money just to put drugs on the shelf?" The news source said Gilman, like many in the US, is more focused on simply raising prices as the key lever to improving rewards, a view that resonates with many investors, according to Oppenheimer analyst Akiva Felt.
  • Meanwhile, Patrick Vallance, who heads GlaxoSmithKline's pharmaceuticals research, believes a system of advanced market commitments could be the answer, under which governments may agree, for example, to purchase new antibiotics for a 10-year period.

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