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Antibiotic-focused Pharmaceutical Company Cuts Highlight Vulnerability of Drug Development Pipeline

News of continued cutbacks at one of what is already a limited number of companies conducting antibiotic research and development threatens access to a critical medicine and further validates a critical need for government-led incentives that both reward and support work towards a robust, renewable antibiotic supply.

The announcement Monday from Achaogen Inc., a biopharmaceutical company that discovers, develops and markets antibacterial drugs to address multi-drug resistant infections, of plans to reduce operating costs by up to 40 percent underscores the ramifications of a fragile antibiotic pipeline, and of factors leading to limited current investment in antibiotic research and development.  This announcement continues a recent trend of companies facing similar challenges or retreating from the antibiotics market entirely.

The cuts, which can potentially endanger the Achaogen’s ability to manufacture its new antibiotic, a drug approved to treat complicated urinary tract infections, follow previous reductions which already compromise the company’s ability to continue research and development for new antibiotics.

Reports on the reductions attribute the cuts to declining stock prices caused by low returns on antibiotic research and development, a situation that has already caused other companies to abandon antibiotic R&D and continues to confront the few remaining companies focused on antibiotic discovery.

The Infectious Diseases Society of America continues to urge federal interventions that include:

  • Prizes or awards provided for new antibiotics upon approval to provide a timely, predictable return on investment that is de-linked from the antibiotics’ sales or use, and that could encourage other nations and nongovernment partners to launch similar awards;
  • New models of reimbursement for antibiotics through the Centers for Medicare and Medicaid Services (CMS) to reimburse for new antibiotics in a fashion that reflects their high value to society and promotes their appropriate use;
  • Transferable exclusivity to allow companies to transfer up to one year of a new antibiotic’s exclusivity to a more profitable drug;
  • Tax credits to help reduce high antibiotic R&D costs;
  • Continued investment in the National Institutes of Health and the Biomedical Advanced Research and Development Authority (BARDA) to support antibiotic R&D.

IDSA recognizes the importance of careful use of taxpayer resources and supports targeting new incentives to antibiotics that address unmet needs and believes that companies receiving such incentives should be required to make commitments in support of stewardship and appropriate access.


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