26 December 2019

Crisis Looms in Antibiotics as Drug Makers Go Bankrupt” (New York Times)

The problem is straightforward: The companies that have invested billions to develop the drugs have not found a way to make money selling them. Most antibiotics are prescribed for just days or weeks — unlike medicines for chronic conditions like diabetes or rheumatoid arthritis that have been blockbusters — and many hospitals have been unwilling to pay high prices for the new therapies. Political gridlock in Congress has thwarted legislative efforts to address the problem.

The challenges facing antibiotic makers come at time when many of the drugs designed to vanquish infections are becoming ineffective against bacteria and fungi, as overuse of the decades-old drugs has spurred them to develop defenses against the medicines.

The complexity of this issue stems from the interaction between multiple different systems at work:

  1. the financial system and its means of raising capital for development and production of medication;
  2. the research and development system with its internal timelines, regulatory requirements, and funding needs;
  3. the healthcare system and its method of prescribing drugs and the allocation of costs within the healthcare system;
  4. the biological system that has given rise to drug-resistant bacteria and fungi, resulting from past use of antibiotics and now imposing pressure on the the above two systems;
  5. the political system that deals with the allocation of resources using taxes and wealth transfers, as well as owing a responsibility to regulate and govern.

The experience of the biotech company Achaogen, is a case in point. It spent 15 years and a billion dollars to win Food and Drug Administration approval for Zemdri, a drug for hard-to-treat urinary tract infections. In July, the World Health Organization added Zemdri to its list of essential new medicines.

By then, however, there was no one left at Achaogen to celebrate.

This past spring, with its stock price hovering near zero and executives unable to raise the hundreds of millions of dollars needed to market the drug and do additional clinical studies, the company sold off lab equipment and fired its remaining scientists. In April, the company declared bankruptcy.

This example shows one facet of the complexity — differing timescales across different systems. The timescale needed for regulation and development (touching on the R&D system and the political system) does not match up with the financial system, and both of these in turn do not match up with the timescales of the development of entities within the biological system.

A brief analysis seems to suggest that the political system is in the best place to start to try to coordinate these different systems, since that is one of the roles of politics, and given that it has the power and wealth, and its freedom from the exigencies of the markets, together with its control over the regulatory process.

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