Antimicrobial resistance is now the third leading cause of death in the US. As developers continue to leave an unprofitable market, legislation and new reimbursement models propose to stimulate development of new antibiotics.
Developing cures for infectious diseases has always promoted the image of pharma as a healing industry. Today, however, few companies remain in a business that is becoming increasingly unprofitable. According to data presented by the Pew Charitable Trust, the profitability (as defined by net present value [NPV]) of a typical antibiotic stands at $100 million, compared with $1.1 billion for a muscoskeletal therapy, $720 million for a neurology treatment, and $300 million for a cancer drug (1,2). Not surprisingly, 42 antibiotics were in the clinical pipeline in June 2019 (3), compared with over 1,000 oncology therapies.
Even small innovators are leaving the market. In April of 2019, Achaogen, a biopharmaceutical company whose plazomicin therapy had been approved by FDA, declared bankruptcy (4). “There has been a large exodus of Big Pharma companies from the whole antimicrobial area and small biotechs are coming forth with research programs, but many are struggling financially, even after successful product launches,” said Greg Frank, executive director of BIO’s new initiative, Working to Fight Antimicrobial Resistance (AMR), which was launched in August 2019 (5). “We can expect to see more bankruptcies until the business landscape changes.”
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