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The antibiotic paradox: why companies can’t afford to create life-saving drugs

125 points by sohkamyung 6y ago

vikramkr 6y ago
This is genuinely a pretty big problem in the field. The reward for making a good antibiotic is getting a drug that nobody will use since they want to preserve it for when a bacteria becomes resistant to everything else. We've yet to see really great successes from other approaches like phage therapy, but I do think that long term, the only commercially feasible way to fight bacteria is to use some technology along those lines, where you can keep adapting the therapy to deal with resistance so people will be encouraged to use it and you will have revenues from the product. Still a lot of technical problems to overcome there, but there are interesting approaches (such as using the phage as a CRISPR vector) that go ahead and engineer the phages to get around some of the roadblocks that have stopped them from being useful in general. And we shouldn't underestimate non-antibiotic approaches as well - some good progress in C. diff has been made with stool transplants. Lots of ways to target bad bacteria, unfortunately the one that's worked the best so far is the least commercially sustainable.
- newacct583 6y ago
  > unfortunately the one that's worked the best so far is the least commercially sustainable. So sustain it non-commercially. Governments have purchased medications in the past, often for exactly this kind of reason. We stockpile vaccines right now, even though the "market" doesn't want to. Really the most notable thing about this article isn't the science, it's the framing of the problem as "difficult" when... it isn't.
  - vikramkr 6y ago
    It's politically difficult yeah. If there was like a $500 million or $1 billion dollar reward for bringing a new antibiotic to market (maybe with price regulations on the other end, but i don't think those would matter with antibiotics), this problem would be a long way to solved. Or a GAVI equivalent. But sometimes, scientific problems are easier to solve than political ones. I'd bet on a new breakthrough creating an alternative to antibiotics happening before the (US) government overcomes the political friction required to do what will be framed as bailing out big pharma. Hating big pharma is like the one thing both parties agree on here.
- arethuza 6y ago
  Globally we spend trillions on weapons (specifically nuclear weapons) that nobody wants to use so the problem doesn't seem completely insurmountable?
  - vikramkr 6y ago
    The problem is that in America, creating jobs is a significant focus in government spending, including military spending. There's not a lot of jobs in antibiotics the same way that there are lots of well paying jobs to bring to your congressional district if you fund a plane to nowhere. Elsewhere in the world maybe it's different and there's an opportunity there, but spending decisions like those in the US are very jobs driven and antibiotics just don't really fit into that
    - giantg2 6y ago
      I think that's a slight over generalization, but there's definitely truth there. The DoD is partnering with (funding) phage therapy research companies.
      - arethuza 6y ago
        I can recommend The Shadow World about the global arms trade : http://www.theshadowworldbook.com/ http://www.theshadowworldbook.com/ Mind you - not a book for the easily angered.
        giantg2 6y ago
        Sounds interesting. I've heard of some of the stuff on this subject but I'm probably not familiar with all the details or examples. Maybe I will check it out.
      - vikramkr 6y ago
        Definitely fair to call it an over generalization - I grew up in a town with a "private sector" that only existed because of government contracts and have worked on pursuing DoD contracts for life sciences applications, and from what I've seen, it's fair to say that creating employment in the US continues to be a very large part of the driving force behind why funding is allocated by the government. The program managers aren't necessarily keeping it front of mind, but the people signing the legislation to give the program managers their funds to manage basically only care about the jobs part, and that bleeds through in a lot of subtle and non-subtle ways
- snarf21 6y ago
  This is what I really wish the WHO would solve. Have a global fund that every country contributes to based on GDP and/or population. The WHO buys an new drugs from the drug companies and then sets up manufacturing and stockpiles. Then we can get rid of all this drug advertising and reduce the cost of health care. We can stop have the same drug be cheaper in Canada than it is in the US. The drug companies can coordinate with the WHO to develop drugs for the most needed conditions. We don't need a 12th ED drug but a shelf stable anti-venom might be needed globally. If there are vaccines/shots we need globally, we can keep a certain percentage of flu or whatever around and ship to where they are needed. Instead each country has to keep their own stockpile with duplication of effort. In the US, we pay egg farms billions to produce eggs to be used for making flu vaccines for when actually need them but we pay for the farms year round so we have reserved supply. This is silly and there are easier ways to share the costs.
  - HeadsUpHigh 6y ago
    Government funding on products never produces cheap products. The problem with drug prices is the cost of dealing with FDA regulations, not the free market. Insulin has no reason to be that expensive if it wasn't for the clusterfuck of IP protection laws that interact with each other and lock basic products out.
  - m12k 6y ago
    Even better, let WHO shoulder the cost of trialing promising candidate drugs. The current system means every successful drug needs to also shoulder the cost of developing and (especially) trialing nine other drugs that didn't make it. Basically pharma companies currently work like hedge funds who expect most of their startups to fail but expect to make the money back on a single unicorn from each batch. IMO it would be a much healthier ecosystem if smaller labs could just do the development part.
- throwaway_pdp09 6y ago
  > is getting a drug that nobody will use That's silly. Of course society will want to use it. It's just that if they're wise[0], they'll use it as needed not spray it about (sometimes literally) [0] If. Big if.
  - pbhjpbhj 6y ago
    I think they mean "has a sales profile restrained by public health considerations" - sell sugar pills and your market is comparatively limitless in this respect.
thinkingkong 6y ago
Its interesting that one of the drugs mentioned isnt viable as a business model because it must be given intravenously. Its almost like the value stream / value chain in medicine expects the drugs to do the work as a replacement for people. If the cost of an in-person visit was free, it would still cost more but might it be viable?
- sithadmin 6y ago
  It's not just that there's friction associated with injection-only antibiotics. It's also that most cutting edge antibiotics that must be delivered via injection or infusion tend to be finicky about dose titration (requiring regular blood tests and hence effectively have secondary product dependencies to support use of the antibiotic), and have an unfortunate tendency to cause a number of relatively severe side effects that need to be monitored for over an extended duration.
newacct583 6y ago
I don't know that the details about the drug market are particularly important here. This is just another tragedy of the commons effect. Drug resistant infections are a "problem" (a very severe one to those suffering), but they're an economically insignificant problem. So no one is willing to pay enough for new/unresisted drugs to make it worth their development. There are plenty of straightforward ways to get these drugs to patients. They just aren't ever acceptable to the people regulating research funding and the drug market.
EGreg 6y ago
Start to make patentleft to start competing alongside, and allowing this to be developed. Just like in open source software, all other science departments run on a gift economy just fine, everyone contributing small parts to a snowball. Newton stood on the shoulders of giants, he says. He didn’t have a swat team shut him down for it. The engine of Capitalism is about taking risks and investing capital into a project, to recoup it if it turns into products people want to buy with viable unit economics. That works well, but also has major downsides. Countries like USA which do it wind up paying 10x more for the same drugs as others, and you can see other problems in the OP post about not even developing the drugs. May as well try another system (alongside) like patentleft. Open source and science is a gift economy where everyone contributes what they can afford, and a growing snowball of ideas. It is built on COLLABORATION rather than competition, and requires NONE of the intrusive government interventions to grant monopolies on ideas and “doctrine of equivalents”. Libertarians and progressives alike should welcome it. Private property is just a man made system, just like any other. We can look around and see what systems work better. Which is far more popular today: Wikipedia vs Britannica WebKit / Blink vs IE Linux / BSD vs SunOS The Web vs AOL Linux/Android vs Nokia Apache / NGinX vs IIS Programming languages are almost all open source Wordpress vs Blogger.com I could go on... but you get the idea. The tortoise beats the hare eventually.
- vikramkr 6y ago
  How does that help? That just reduces the commercial incentive to pay for clinical trials and stuff even more. Phasing out patents doesn't work without an idea for an entirely, fundamentally new system of developing, testing, approving, manufacturing, and distributing drugs. I'm not saying that it's not possible to come up with a radically different system that is better than what we have now, but I am saying that kneecapping the system that we have now without any plan for a replacement definitely isn't going to help.
  - EGreg 6y ago
    It helps because there are opportunities to create and boost systems of prizes instead of patents.
sithadmin 6y ago
While the gist of the article is true - antibiotics development is an area where 'the market' seems to discourage innovation - I always roll my eyes when I see Achaogen name dropped in articles like this. Achaogen would have had a much longer runway had the leadership not began demolishing it as soon as it was clear that the FDA might grant approval for one or more indications. They faced the usual struggles associated with bringing a new antibiotic to market, but in the final stretch before final approval began to behave like a valley startup: setting enormous piles of cash on fire to hire a massive workforce before having anything resembling stable income, and widespread frivolous expenditure on nonessential projects and perks across the company. The leadership also seemed obsessed with emulating nearby Bay Area tech companies, and it was never clear how or why this was supposed to help Achaogen succeed as a pharma enterprise. Source: was there for the explosion in growth, and the eventual implosion.
- vikramkr 6y ago
  Were they hiring a big sales force like a typical pharma company or were they less directly relevant jobs? That's interesting how that played out - I guess they were a bit overconfident in their market predictions
  - sithadmin 6y ago
    Overconfident is an understatement :p A large sales force was hired (probably far too large of one, and definitely larger than institutional investors cared for), but there was also massive growth and spending in departments that were not strongly contributing to go-to-market activities (e.g. massive laboratory expansions oriented towards development of future products, massive growth in many back-of-house business ops teams, and some jaw-droppingly frivolous investments in facilities that I don't feel comfortable disclosing in public).
- parhamn 6y ago
  Wait, what happens to the formulations after the company goes out of business? Is all the effort really just lost?! Surely it’s just bought by another org?
nabla9 6y ago
Incentives in medical research are screwed. This article just scratches the surface. In general, doing research towards direction that might lead to molecule that can't be patented is not possible in commercial medical research. Research is actively directed away from cheap treatments or drugs.
- bad_user 6y ago
  Research is super expensive, and the low hanging fruits have been picked. There's no such thing as a cheap drug, unless that cost is subsidized. Also consider that the lifetime for drugs against viruses or other pathogens can be fairly short. Viruses that are a problem now, like SARS-Cov-2, might be a non-issue 3 years from now, or the vaccines we develop now might be ineffective against future strains. Unless the government or non-profit organizations can promise grant money, in exchange for R&D, then patents are reasonable. And note that 20 years is a very long time in IT, but not in Pharma. Many drugs developed 20+ years ago are just as good today.
  - nabla9 6y ago
    > and the low hanging fruits have been picked Only the low hanging fruits that can be patented have been picket. Cheap paths are blocked by incentives. Between the size of typical government funding and patentable drug there is huge gap of few hundred millions. > There's no such thing as a cheap drug Existing molecular entities where the patent has expired are cheap. Besides, the it does not have to be new drug. Effective treatment can be something else.
- natechols 6y ago
  There is a lot of nonsense tossed around about who actually discovers the majority of drugs and how the public sector can be more involved, but you've identified one case where government and academia could make a huge difference, e.g. by running clinical trials on off-patent drugs applied to new conditions. Low risk, low cost, and very little incentive for big pharma, but a big win for taxpayers if the trials identify cheap new cures.
  - 6y ago
eanzenberg 6y ago
Why spend billions researching and creating drugs when people like Bernie Sanders and AOC proclaim by decree the drug shall cost $10?
kyrra 6y ago
WSJ did a good story on this back in January: News version: https://www.wsj.com/articles/antibiotic-makers-find-rewards-for-tackling-superbugs-are-scarce-11578259557 https://www.wsj.com/articles/antibiotic-makers-find-rewards-... Free podcast: https://www.wsj.com/podcasts/the-journal/the-broken-business-of-antibiotics/38922695-fada-4ff5-9638-b459a3a68d1b https://www.wsj.com/podcasts/the-journal/the-broken-business...
- casefields 6y ago
  WSJ mirror: http://archive.md/YbmXl http://archive.md/YbmXl
kokey 6y ago
I've heard the economics of developing new antibiotics making it difficult being mentioned a number of times but this is the first time I've seen an article explaining the economic difficulties so clearly. I do like the sound of some of the proposals, like rewarding new products so they don't have to be at the mercy of a slow introduction to the market.
mmazing 6y ago
I don't understand why we don't (as a society) fund more scientific research, in general. It seems like taxes could fund non-profits to be able to do this sort of research, and then pay for the vetting process and manufacturing. It would probably save TONS of money, too.
- dcolkitt 6y ago
  I agree with more funding of scientific research, but why not use X-prizes instead of direct grants to non-profits? When we have a clear objective in mind (i.e. develop a new antibiotic with no pre-existing resistance in the wild), X-prizes tend to produce much better ROIs. For-profit organizations tend to be much more efficient at hitting concrete targets. An X-prize also doesn't require the government to directly pick winners and losers, or evaluate intermediate progress. That sidesteps a lot of the risk of political corruption that inevitably creeps in with big government budgets.
  - mmazing 6y ago
    I think that makes total sense in terms of coming up with a solution to a specific objective. However, since antibiotic resistance, and treatment of diseases in general (COVID, for example) is a moving target - it would be nice to have machinery in place for solving these problems as they come. Regarding political funding, that's a whole different problem in itself.
- ativzzz 6y ago
  > I don't understand why we don't (as a society) fund more scientific research, in general. Humans are much better at handling short-term projects than long-term projects. There are many reasons for this including, but not limited to, human psychology, harder to assess risks and payoffs, and limited human lifespans/workspans (e.g. leadership changes every 4-8 years and therefore so will the direction of the project). These issues are very prevalent when, for instance, the development of a new antibiotic can take up to 20 years. In addition, plenty of science results in duds. We see and hear about the successes, but we don't really see the hypotheses that are failed to be proven and discarded, which I imagine are the vast majority. Most people are not scientists, and this kind of process is foreign to them.
acarl005 6y ago
I do agree that incentives are a problem. However, I also see this as a sign that small-molecule antibiotics may not be the most efficient approach for antibiotics in the future. Designing small-molecule pharmacological agents in general is extremely inefficient in terms of time and money, and lacks robust design methods. I was shocked at how much "throwing everything against the wall to see what sticks" (high-throughput screening) was being depended upon to optimize drug leads. Sure, machine learning can help this process a bit, but it's building upon a shaky foundation. We should be investing in bacteriophage research and other methods more robust to evolving resistance. This will ultimately be more beneficial for the public good. Of course, incentives probably still need to change in order for this research to gain momentum.
- comicjk 6y ago
  Designing small-molecules is "extremely inefficient" compared to what? We might as well say fishing is inefficient because of all the time spent not reeling in a fish. We should definitely research all plausible alternatives, but nothing in medicine is as convenient as a small-molecule drug that works. So people are going to try to find them.
wooby 6y ago
"Antibiotics present an enduring economic puzzle. These drugs changed the world. Yet despite their unique power, the free market doesn’t value them." No. The free market -- people -- values these drugs. If there wasn't demand, this article wouldn't have been written. The problem is that drugs are too expensive to bring to market for their developers to profit, and that the single greatest cost is often FDA approval. The article implies that the solution is to funnel more BARDA grants to companies in order to make drug development profitable. This amounts to using taxpayer money to help private companies pay government fees, with lots of bureaucratic overhead (employees, forms, computer systems, buildings) at each end of the transaction. This is dramatically suboptimal. Instead of this, the FDA process should be cheaper, or the FDA itself should be privatized, and operate as an entity like Consumer Reports or any other review organization. Government need only be involved with prosecuting fake producers. The consumer requires only access to information, and assurances that a substance they bought is the same they have researched. Paying government expenses with taxes is an unsustainable Ponzi scheme, and takes us further away from a real solution.
- digdugdirk 6y ago
  The FDA approval process ensures both that drugs perform an intended function, and that drugs don't harm people. Part of the expense of this process is making sure that both of these aspects are performed to sufficient standards. It sounds like your suggestion would lower the bar for both these aspects, and only catch issues after the fact - something which could have fatal consequences. I'm curious how you would see this playing out in a positive light, particularly given the money involved and the incentives to game the system.
  - michaniskin 6y ago
    Drugs are not somehow different from any other type of product. All products have some level of risk to the consumer, and may or may not do what they're advertised to do. The Car & Truck Administration (CTA) approval process ensures both that cars and trucks perform an intended function, and that cars and trucks don't harm people. Part of the expense of this process is making sure that both of these aspects are performed to sufficient standards. And yet, we don't seem to need an FDA of cars and trucks costing auto manufacturers $1.4B to develop a new car, and our cars don't explode and kill us. The reason? A car maker who makes unsafe cars goes out of business. Consider Ralph Nader's "Unsafe At Any Speed" did to the Corvair corporation.
DougWebb 6y ago
I believe a workable solution for this would involve: 1. Pharmas separate drug R&D from manufacturing and sales. 2. R&D companies submit proposals to the FDA for new drugs they want to develop. The FDA can also send out RFPs for drugs they'd like to prioritize. 3. The FDA chooses drugs based on likely public benefit, rather than the profitability-driven selection we have today. 4. The FDA _funds the R&D_ for the drugs it chooses. This allows the R&D company to operate with positive cash flow, separately from the eventual (possible) future income from manufacturing and sales. This is also the incentive for developing drugs that aren't patentable, or which will be required only in small quantities. 5. When a drug is approved for release, the FDA will license one or more manufacturers to produce it, based on their quality, cost, and scale. This is why the Pharmas break into separate companies. Some may focus only on R&D, some may focus only on manufacturing. Some manufacturers can focus on large-scale high volume production, while others can focus on small-scale production. This prevents the excuse for charging huge prices for rarely-needed drugs "because the equipment needed would otherwise be producing much higher volume drugs at lower cost". This arm of the FDA would be funded partly by the public, and partly by licensing fees. The math for insurance costs and premiums would change because retails prices for most drugs would drop. That would make insurance cheaper, and some of those savings would probably need to go towards a tax for the FDA's R&D funding. But longer term, the licensing fees might be adequate on their own since the FDA would operate as a non-profit.
- sithadmin 6y ago
  Point 1 effectively happens today, with larger and successful pharma firms basically waiting on startups to do the heavy lifting/absorb risk of product development, then swooping in at a late phase to acquire the startup. Point 2 is outside the FDA's mandate. Other HHS agencies like the CDC and BARDA are a better fit and more or less already do this. Point 3: again, outside the FDA mandate, and the FDA doesn't 'choose' anything in this sense. It evaluates safety and efficacy. Public health benefit is a secondary factor, and one that doesn't necessarily get heavy weight (e.g. Achaogen getting plazomicin 'Fast Tracked' by the FDA didn't seem to do much in Achaogen's favor in the end, with the drug only getting approved for a less-profitable indication). Point 4: Again, agencies other than the FDA already do this and are a better fit. Point 5: This is practically already how the industry works, though the FDA isn't the one calling shots.
devit 6y ago
Why do trials cost so much? It would seem like testing on 100-1000 people spending $10-100k per person would work, which gives $1-100m, but apparently they cost billions for some reason.
- oxygenjoe 6y ago
  Doctors, Nurses, clinical trail coordinators, paying a lab to process specimens, the list goes on. I work in a medical lab that charges a low flat rate for literally holding onto the specimens for a couple hours, and a high flat rate for any amount of processing, i.e. centrifuging specimens, pipetting into little labelled vials, adding certain preservatives, etc. This processing isn't really automation friendly and regulations require a CAP accredited lab to do the processing so it can't really be outsourced to a lower bidder. I get the impression these companies aren't too concerned with the actual costs involved.
- pkaye 6y ago
  I think it is more that there are lots of failed drug trials that need to be paid for in a ROI perspective.
Cirpop 6y ago
It’s going to be hard to find a drug, and it is going to be hard to develop it, and you weren’t going to get paid for it. So why would you do that?
dmch-1 6y ago
When I read the title I thought the point was that companies can't afford to create life-saving drugs, as it is in their interest people to stay ill and keep buying less effective drugs.
hu3 6y ago
There's a Steam review for the game Big Pharma that illustrates this paradox to a lesser extent: > Came within 5% of the top-most goal for a level, and failed for lack of time. Went back several saves and looked at everything. Was my choice of drug wrong? Were my production lines a square or two inefficient, preventing me from utilizing another delivery portal? Was I spending too much on Bolivian Tree Frog Saliva? Did I not get the researchers working on new machines fast enough? > And then it hit me: my best-selling drug, for erectile dysfunction, beautifully crafted to avoid side effects and have an A cure rating... was devastating the market... for itself. I simply couldn't pull enough profit out of the economy if I cured people. > Tried again. Made sure to give the sufferers a side-effect free drug which worked... some of the time... enough to get their hopes up... but not enough to stop buying next month's installment. > 10/10 would abandon business ethics again. https://steamcommunity.com/id/patio11/recommended/344850/ https://steamcommunity.com/id/patio11/recommended/344850/
- renewiltord 6y ago
  That is a pretty well done game if it has emergent effects like that.
pow_pp_-1_v 6y ago
There was a PBS Newshour piece about this: https://www.pbs.org/newshour/show/as-a-virus-ravages-the-world-antibiotic-makers-are-in-disarray https://www.pbs.org/newshour/show/as-a-virus-ravages-the-wor...
not2b 6y ago
Markets don't always work. They often work well, but when they don't, states will have to step in and fund things.
renewiltord 6y ago
The FDA should be able to certify drugs as safe, effective, etc. They shouldn't be able to ban drugs for not being that. Helmets in America don't have to be CPSC certified and that's fine. You can choose to buy an uncertified helmet if you want. Certification is good. But uncertified drugs have their place.
- sithadmin 6y ago
  What you are suggesting is completely mad. The average US citizen cannot be expected to have a nuanced enough understanding of pharmacology to make informed decisions about the safety and efficacy of drugs. Even trained and licensed physicians often have difficulties making such decisions in non-mundane situations, and rely heavily upon their pharmacy colleagues (either by way of consulting practice-specific literature, or actually consulting with a qualified pharmacist) to assist with making determinations about what would be safe and effective to administer.
  - renewiltord 6y ago
    They don't have to. They can stick to the pharmacists and all that. If you want me to take a test to demonstrate that I am of sound mind and should be released of my restrictions, that's fine. If you want me to post money so you can afford to bury my body, that's also fine. But release me from the bonds that bind "the average US citizen".
    - sithadmin 6y ago
      >They can stick to the pharmacists and all that. Again, your position is absurd. Individual pharmacists of the type that serve the average person most often (retail pharmacists) are not equipped or trained to be the gatekeepers deciding which products are safe and effective. Putting that sort of risk and power into the hands of pharmacists will necessarily result in a need for cooperation on de facto standards that will only result in strengthening cartels like the American Pharmacists Association, which are already anti-consumer enough as it is. >release me from the bonds that bind "the average US citizen". Well...that definitely vibes with the incoherent disestablishmentarianist approach you seem to be promoting, I guess.
zeckalpha 6y ago
Classic market failure problem.

125 points by sohkamyung 6y ago

This is genuinely a pretty big problem in the field. The reward for making a good antibiotic is getting a drug that nobody will use since they want to preserve it for when a bacteria becomes resistant to everything else. We've yet to see really great successes from other approaches like phage therapy, but I do think that long term, the only commercially feasible way to fight bacteria is to use some technology along those lines, where you can keep adapting the therapy to deal with resistance so people will be encouraged to use it and you will have revenues from the product. Still a lot of technical problems to overcome there, but there are interesting approaches (such as using the phage as a CRISPR vector) that go ahead and engineer the phages to get around some of the roadblocks that have stopped them from being useful in general. And we shouldn't underestimate non-antibiotic approaches as well - some good progress in C. diff has been made with stool transplants. Lots of ways to target bad bacteria, unfortunately the one that's worked the best so far is the least commercially sustainable.

newacct583 6y ago
> unfortunately the one that's worked the best so far is the least commercially sustainable. So sustain it non-commercially. Governments have purchased medications in the past, often for exactly this kind of reason. We stockpile vaccines right now, even though the "market" doesn't want to. Really the most notable thing about this article isn't the science, it's the framing of the problem as "difficult" when... it isn't.
- vikramkr 6y ago
  It's politically difficult yeah. If there was like a $500 million or $1 billion dollar reward for bringing a new antibiotic to market (maybe with price regulations on the other end, but i don't think those would matter with antibiotics), this problem would be a long way to solved. Or a GAVI equivalent. But sometimes, scientific problems are easier to solve than political ones. I'd bet on a new breakthrough creating an alternative to antibiotics happening before the (US) government overcomes the political friction required to do what will be framed as bailing out big pharma. Hating big pharma is like the one thing both parties agree on here.
arethuza 6y ago
Globally we spend trillions on weapons (specifically nuclear weapons) that nobody wants to use so the problem doesn't seem completely insurmountable?
- vikramkr 6y ago
  The problem is that in America, creating jobs is a significant focus in government spending, including military spending. There's not a lot of jobs in antibiotics the same way that there are lots of well paying jobs to bring to your congressional district if you fund a plane to nowhere. Elsewhere in the world maybe it's different and there's an opportunity there, but spending decisions like those in the US are very jobs driven and antibiotics just don't really fit into that
  - giantg2 6y ago
    I think that's a slight over generalization, but there's definitely truth there. The DoD is partnering with (funding) phage therapy research companies.
    - arethuza 6y ago
      I can recommend The Shadow World about the global arms trade : http://www.theshadowworldbook.com/ http://www.theshadowworldbook.com/ Mind you - not a book for the easily angered.
      - giantg2 6y ago
        Sounds interesting. I've heard of some of the stuff on this subject but I'm probably not familiar with all the details or examples. Maybe I will check it out.
    - vikramkr 6y ago
      Definitely fair to call it an over generalization - I grew up in a town with a "private sector" that only existed because of government contracts and have worked on pursuing DoD contracts for life sciences applications, and from what I've seen, it's fair to say that creating employment in the US continues to be a very large part of the driving force behind why funding is allocated by the government. The program managers aren't necessarily keeping it front of mind, but the people signing the legislation to give the program managers their funds to manage basically only care about the jobs part, and that bleeds through in a lot of subtle and non-subtle ways
snarf21 6y ago
This is what I really wish the WHO would solve. Have a global fund that every country contributes to based on GDP and/or population. The WHO buys an new drugs from the drug companies and then sets up manufacturing and stockpiles. Then we can get rid of all this drug advertising and reduce the cost of health care. We can stop have the same drug be cheaper in Canada than it is in the US. The drug companies can coordinate with the WHO to develop drugs for the most needed conditions. We don't need a 12th ED drug but a shelf stable anti-venom might be needed globally. If there are vaccines/shots we need globally, we can keep a certain percentage of flu or whatever around and ship to where they are needed. Instead each country has to keep their own stockpile with duplication of effort. In the US, we pay egg farms billions to produce eggs to be used for making flu vaccines for when actually need them but we pay for the farms year round so we have reserved supply. This is silly and there are easier ways to share the costs.
- HeadsUpHigh 6y ago
  Government funding on products never produces cheap products. The problem with drug prices is the cost of dealing with FDA regulations, not the free market. Insulin has no reason to be that expensive if it wasn't for the clusterfuck of IP protection laws that interact with each other and lock basic products out.
- m12k 6y ago
  Even better, let WHO shoulder the cost of trialing promising candidate drugs. The current system means every successful drug needs to also shoulder the cost of developing and (especially) trialing nine other drugs that didn't make it. Basically pharma companies currently work like hedge funds who expect most of their startups to fail but expect to make the money back on a single unicorn from each batch. IMO it would be a much healthier ecosystem if smaller labs could just do the development part.
throwaway_pdp09 6y ago
> is getting a drug that nobody will use That's silly. Of course society will want to use it. It's just that if they're wise[0], they'll use it as needed not spray it about (sometimes literally) [0] If. Big if.
- pbhjpbhj 6y ago
  I think they mean "has a sales profile restrained by public health considerations" - sell sugar pills and your market is comparatively limitless in this respect.

thinkingkong 6y ago

Its interesting that one of the drugs mentioned isnt viable as a business model because it must be given intravenously. Its almost like the value stream / value chain in medicine expects the drugs to do the work as a replacement for people. If the cost of an in-person visit was free, it would still cost more but might it be viable?

sithadmin 6y ago
It's not just that there's friction associated with injection-only antibiotics. It's also that most cutting edge antibiotics that must be delivered via injection or infusion tend to be finicky about dose titration (requiring regular blood tests and hence effectively have secondary product dependencies to support use of the antibiotic), and have an unfortunate tendency to cause a number of relatively severe side effects that need to be monitored for over an extended duration.

newacct583 6y ago

I don't know that the details about the drug market are particularly important here. This is just another tragedy of the commons effect. Drug resistant infections are a "problem" (a very severe one to those suffering), but they're an economically insignificant problem. So no one is willing to pay enough for new/unresisted drugs to make it worth their development. There are plenty of straightforward ways to get these drugs to patients. They just aren't ever acceptable to the people regulating research funding and the drug market.

EGreg 6y ago

Start to make patentleft to start competing alongside, and allowing this to be developed. Just like in open source software, all other science departments run on a gift economy just fine, everyone contributing small parts to a snowball. Newton stood on the shoulders of giants, he says. He didn’t have a swat team shut him down for it. The engine of Capitalism is about taking risks and investing capital into a project, to recoup it if it turns into products people want to buy with viable unit economics. That works well, but also has major downsides. Countries like USA which do it wind up paying 10x more for the same drugs as others, and you can see other problems in the OP post about not even developing the drugs. May as well try another system (alongside) like patentleft. Open source and science is a gift economy where everyone contributes what they can afford, and a growing snowball of ideas. It is built on COLLABORATION rather than competition, and requires NONE of the intrusive government interventions to grant monopolies on ideas and “doctrine of equivalents”. Libertarians and progressives alike should welcome it. Private property is just a man made system, just like any other. We can look around and see what systems work better. Which is far more popular today: Wikipedia vs Britannica WebKit / Blink vs IE Linux / BSD vs SunOS The Web vs AOL Linux/Android vs Nokia Apache / NGinX vs IIS Programming languages are almost all open source Wordpress vs Blogger.com I could go on... but you get the idea. The tortoise beats the hare eventually.

vikramkr 6y ago
How does that help? That just reduces the commercial incentive to pay for clinical trials and stuff even more. Phasing out patents doesn't work without an idea for an entirely, fundamentally new system of developing, testing, approving, manufacturing, and distributing drugs. I'm not saying that it's not possible to come up with a radically different system that is better than what we have now, but I am saying that kneecapping the system that we have now without any plan for a replacement definitely isn't going to help.
- EGreg 6y ago
  It helps because there are opportunities to create and boost systems of prizes instead of patents.

sithadmin 6y ago

While the gist of the article is true - antibiotics development is an area where 'the market' seems to discourage innovation - I always roll my eyes when I see Achaogen name dropped in articles like this. Achaogen would have had a much longer runway had the leadership not began demolishing it as soon as it was clear that the FDA might grant approval for one or more indications. They faced the usual struggles associated with bringing a new antibiotic to market, but in the final stretch before final approval began to behave like a valley startup: setting enormous piles of cash on fire to hire a massive workforce before having anything resembling stable income, and widespread frivolous expenditure on nonessential projects and perks across the company. The leadership also seemed obsessed with emulating nearby Bay Area tech companies, and it was never clear how or why this was supposed to help Achaogen succeed as a pharma enterprise. Source: was there for the explosion in growth, and the eventual implosion.

vikramkr 6y ago
Were they hiring a big sales force like a typical pharma company or were they less directly relevant jobs? That's interesting how that played out - I guess they were a bit overconfident in their market predictions
- sithadmin 6y ago
  Overconfident is an understatement :p A large sales force was hired (probably far too large of one, and definitely larger than institutional investors cared for), but there was also massive growth and spending in departments that were not strongly contributing to go-to-market activities (e.g. massive laboratory expansions oriented towards development of future products, massive growth in many back-of-house business ops teams, and some jaw-droppingly frivolous investments in facilities that I don't feel comfortable disclosing in public).
parhamn 6y ago
Wait, what happens to the formulations after the company goes out of business? Is all the effort really just lost?! Surely it’s just bought by another org?

nabla9 6y ago

Incentives in medical research are screwed. This article just scratches the surface. In general, doing research towards direction that might lead to molecule that can't be patented is not possible in commercial medical research. Research is actively directed away from cheap treatments or drugs.

bad_user 6y ago
Research is super expensive, and the low hanging fruits have been picked. There's no such thing as a cheap drug, unless that cost is subsidized. Also consider that the lifetime for drugs against viruses or other pathogens can be fairly short. Viruses that are a problem now, like SARS-Cov-2, might be a non-issue 3 years from now, or the vaccines we develop now might be ineffective against future strains. Unless the government or non-profit organizations can promise grant money, in exchange for R&D, then patents are reasonable. And note that 20 years is a very long time in IT, but not in Pharma. Many drugs developed 20+ years ago are just as good today.
- nabla9 6y ago
  > and the low hanging fruits have been picked Only the low hanging fruits that can be patented have been picket. Cheap paths are blocked by incentives. Between the size of typical government funding and patentable drug there is huge gap of few hundred millions. > There's no such thing as a cheap drug Existing molecular entities where the patent has expired are cheap. Besides, the it does not have to be new drug. Effective treatment can be something else.
natechols 6y ago
There is a lot of nonsense tossed around about who actually discovers the majority of drugs and how the public sector can be more involved, but you've identified one case where government and academia could make a huge difference, e.g. by running clinical trials on off-patent drugs applied to new conditions. Low risk, low cost, and very little incentive for big pharma, but a big win for taxpayers if the trials identify cheap new cures.
- 6y ago

eanzenberg 6y ago

Why spend billions researching and creating drugs when people like Bernie Sanders and AOC proclaim by decree the drug shall cost $10?

kyrra 6y ago

WSJ did a good story on this back in January: News version: https://www.wsj.com/articles/antibiotic-makers-find-rewards-for-tackling-superbugs-are-scarce-11578259557 https://www.wsj.com/articles/antibiotic-makers-find-rewards-... Free podcast: https://www.wsj.com/podcasts/the-journal/the-broken-business-of-antibiotics/38922695-fada-4ff5-9638-b459a3a68d1b https://www.wsj.com/podcasts/the-journal/the-broken-business...

casefields 6y ago
WSJ mirror: http://archive.md/YbmXl http://archive.md/YbmXl

kokey 6y ago

I've heard the economics of developing new antibiotics making it difficult being mentioned a number of times but this is the first time I've seen an article explaining the economic difficulties so clearly. I do like the sound of some of the proposals, like rewarding new products so they don't have to be at the mercy of a slow introduction to the market.

mmazing 6y ago

I don't understand why we don't (as a society) fund more scientific research, in general. It seems like taxes could fund non-profits to be able to do this sort of research, and then pay for the vetting process and manufacturing. It would probably save TONS of money, too.

dcolkitt 6y ago
I agree with more funding of scientific research, but why not use X-prizes instead of direct grants to non-profits? When we have a clear objective in mind (i.e. develop a new antibiotic with no pre-existing resistance in the wild), X-prizes tend to produce much better ROIs. For-profit organizations tend to be much more efficient at hitting concrete targets. An X-prize also doesn't require the government to directly pick winners and losers, or evaluate intermediate progress. That sidesteps a lot of the risk of political corruption that inevitably creeps in with big government budgets.
- mmazing 6y ago
  I think that makes total sense in terms of coming up with a solution to a specific objective. However, since antibiotic resistance, and treatment of diseases in general (COVID, for example) is a moving target - it would be nice to have machinery in place for solving these problems as they come. Regarding political funding, that's a whole different problem in itself.
ativzzz 6y ago
> I don't understand why we don't (as a society) fund more scientific research, in general. Humans are much better at handling short-term projects than long-term projects. There are many reasons for this including, but not limited to, human psychology, harder to assess risks and payoffs, and limited human lifespans/workspans (e.g. leadership changes every 4-8 years and therefore so will the direction of the project). These issues are very prevalent when, for instance, the development of a new antibiotic can take up to 20 years. In addition, plenty of science results in duds. We see and hear about the successes, but we don't really see the hypotheses that are failed to be proven and discarded, which I imagine are the vast majority. Most people are not scientists, and this kind of process is foreign to them.

acarl005 6y ago

I do agree that incentives are a problem. However, I also see this as a sign that small-molecule antibiotics may not be the most efficient approach for antibiotics in the future. Designing small-molecule pharmacological agents in general is extremely inefficient in terms of time and money, and lacks robust design methods. I was shocked at how much "throwing everything against the wall to see what sticks" (high-throughput screening) was being depended upon to optimize drug leads. Sure, machine learning can help this process a bit, but it's building upon a shaky foundation. We should be investing in bacteriophage research and other methods more robust to evolving resistance. This will ultimately be more beneficial for the public good. Of course, incentives probably still need to change in order for this research to gain momentum.

comicjk 6y ago
Designing small-molecules is "extremely inefficient" compared to what? We might as well say fishing is inefficient because of all the time spent not reeling in a fish. We should definitely research all plausible alternatives, but nothing in medicine is as convenient as a small-molecule drug that works. So people are going to try to find them.

wooby 6y ago

"Antibiotics present an enduring economic puzzle. These drugs changed the world. Yet despite their unique power, the free market doesn’t value them." No. The free market -- people -- values these drugs. If there wasn't demand, this article wouldn't have been written. The problem is that drugs are too expensive to bring to market for their developers to profit, and that the single greatest cost is often FDA approval. The article implies that the solution is to funnel more BARDA grants to companies in order to make drug development profitable. This amounts to using taxpayer money to help private companies pay government fees, with lots of bureaucratic overhead (employees, forms, computer systems, buildings) at each end of the transaction. This is dramatically suboptimal. Instead of this, the FDA process should be cheaper, or the FDA itself should be privatized, and operate as an entity like Consumer Reports or any other review organization. Government need only be involved with prosecuting fake producers. The consumer requires only access to information, and assurances that a substance they bought is the same they have researched. Paying government expenses with taxes is an unsustainable Ponzi scheme, and takes us further away from a real solution.

digdugdirk 6y ago
The FDA approval process ensures both that drugs perform an intended function, and that drugs don't harm people. Part of the expense of this process is making sure that both of these aspects are performed to sufficient standards. It sounds like your suggestion would lower the bar for both these aspects, and only catch issues after the fact - something which could have fatal consequences. I'm curious how you would see this playing out in a positive light, particularly given the money involved and the incentives to game the system.
- michaniskin 6y ago
  Drugs are not somehow different from any other type of product. All products have some level of risk to the consumer, and may or may not do what they're advertised to do. The Car & Truck Administration (CTA) approval process ensures both that cars and trucks perform an intended function, and that cars and trucks don't harm people. Part of the expense of this process is making sure that both of these aspects are performed to sufficient standards. And yet, we don't seem to need an FDA of cars and trucks costing auto manufacturers $1.4B to develop a new car, and our cars don't explode and kill us. The reason? A car maker who makes unsafe cars goes out of business. Consider Ralph Nader's "Unsafe At Any Speed" did to the Corvair corporation.

DougWebb 6y ago

I believe a workable solution for this would involve: 1. Pharmas separate drug R&D from manufacturing and sales. 2. R&D companies submit proposals to the FDA for new drugs they want to develop. The FDA can also send out RFPs for drugs they'd like to prioritize. 3. The FDA chooses drugs based on likely public benefit, rather than the profitability-driven selection we have today. 4. The FDA _funds the R&D_ for the drugs it chooses. This allows the R&D company to operate with positive cash flow, separately from the eventual (possible) future income from manufacturing and sales. This is also the incentive for developing drugs that aren't patentable, or which will be required only in small quantities. 5. When a drug is approved for release, the FDA will license one or more manufacturers to produce it, based on their quality, cost, and scale. This is why the Pharmas break into separate companies. Some may focus only on R&D, some may focus only on manufacturing. Some manufacturers can focus on large-scale high volume production, while others can focus on small-scale production. This prevents the excuse for charging huge prices for rarely-needed drugs "because the equipment needed would otherwise be producing much higher volume drugs at lower cost". This arm of the FDA would be funded partly by the public, and partly by licensing fees. The math for insurance costs and premiums would change because retails prices for most drugs would drop. That would make insurance cheaper, and some of those savings would probably need to go towards a tax for the FDA's R&D funding. But longer term, the licensing fees might be adequate on their own since the FDA would operate as a non-profit.

sithadmin 6y ago
Point 1 effectively happens today, with larger and successful pharma firms basically waiting on startups to do the heavy lifting/absorb risk of product development, then swooping in at a late phase to acquire the startup. Point 2 is outside the FDA's mandate. Other HHS agencies like the CDC and BARDA are a better fit and more or less already do this. Point 3: again, outside the FDA mandate, and the FDA doesn't 'choose' anything in this sense. It evaluates safety and efficacy. Public health benefit is a secondary factor, and one that doesn't necessarily get heavy weight (e.g. Achaogen getting plazomicin 'Fast Tracked' by the FDA didn't seem to do much in Achaogen's favor in the end, with the drug only getting approved for a less-profitable indication). Point 4: Again, agencies other than the FDA already do this and are a better fit. Point 5: This is practically already how the industry works, though the FDA isn't the one calling shots.

devit 6y ago

Why do trials cost so much? It would seem like testing on 100-1000 people spending $10-100k per person would work, which gives $1-100m, but apparently they cost billions for some reason.

oxygenjoe 6y ago
Doctors, Nurses, clinical trail coordinators, paying a lab to process specimens, the list goes on. I work in a medical lab that charges a low flat rate for literally holding onto the specimens for a couple hours, and a high flat rate for any amount of processing, i.e. centrifuging specimens, pipetting into little labelled vials, adding certain preservatives, etc. This processing isn't really automation friendly and regulations require a CAP accredited lab to do the processing so it can't really be outsourced to a lower bidder. I get the impression these companies aren't too concerned with the actual costs involved.
pkaye 6y ago
I think it is more that there are lots of failed drug trials that need to be paid for in a ROI perspective.

Cirpop 6y ago

It’s going to be hard to find a drug, and it is going to be hard to develop it, and you weren’t going to get paid for it. So why would you do that?

dmch-1 6y ago

When I read the title I thought the point was that companies can't afford to create life-saving drugs, as it is in their interest people to stay ill and keep buying less effective drugs.

hu3 6y ago

There's a Steam review for the game Big Pharma that illustrates this paradox to a lesser extent: > Came within 5% of the top-most goal for a level, and failed for lack of time. Went back several saves and looked at everything. Was my choice of drug wrong? Were my production lines a square or two inefficient, preventing me from utilizing another delivery portal? Was I spending too much on Bolivian Tree Frog Saliva? Did I not get the researchers working on new machines fast enough? > And then it hit me: my best-selling drug, for erectile dysfunction, beautifully crafted to avoid side effects and have an A cure rating... was devastating the market... for itself. I simply couldn't pull enough profit out of the economy if I cured people. > Tried again. Made sure to give the sufferers a side-effect free drug which worked... some of the time... enough to get their hopes up... but not enough to stop buying next month's installment. > 10/10 would abandon business ethics again. https://steamcommunity.com/id/patio11/recommended/344850/ https://steamcommunity.com/id/patio11/recommended/344850/

renewiltord 6y ago
That is a pretty well done game if it has emergent effects like that.

pow_pp_-1_v 6y ago

There was a PBS Newshour piece about this: https://www.pbs.org/newshour/show/as-a-virus-ravages-the-world-antibiotic-makers-are-in-disarray https://www.pbs.org/newshour/show/as-a-virus-ravages-the-wor...

not2b 6y ago

Markets don't always work. They often work well, but when they don't, states will have to step in and fund things.

renewiltord 6y ago

The FDA should be able to certify drugs as safe, effective, etc. They shouldn't be able to ban drugs for not being that. Helmets in America don't have to be CPSC certified and that's fine. You can choose to buy an uncertified helmet if you want. Certification is good. But uncertified drugs have their place.

sithadmin 6y ago
What you are suggesting is completely mad. The average US citizen cannot be expected to have a nuanced enough understanding of pharmacology to make informed decisions about the safety and efficacy of drugs. Even trained and licensed physicians often have difficulties making such decisions in non-mundane situations, and rely heavily upon their pharmacy colleagues (either by way of consulting practice-specific literature, or actually consulting with a qualified pharmacist) to assist with making determinations about what would be safe and effective to administer.
- renewiltord 6y ago
  They don't have to. They can stick to the pharmacists and all that. If you want me to take a test to demonstrate that I am of sound mind and should be released of my restrictions, that's fine. If you want me to post money so you can afford to bury my body, that's also fine. But release me from the bonds that bind "the average US citizen".
  - sithadmin 6y ago
    >They can stick to the pharmacists and all that. Again, your position is absurd. Individual pharmacists of the type that serve the average person most often (retail pharmacists) are not equipped or trained to be the gatekeepers deciding which products are safe and effective. Putting that sort of risk and power into the hands of pharmacists will necessarily result in a need for cooperation on de facto standards that will only result in strengthening cartels like the American Pharmacists Association, which are already anti-consumer enough as it is. >release me from the bonds that bind "the average US citizen". Well...that definitely vibes with the incoherent disestablishmentarianist approach you seem to be promoting, I guess.

zeckalpha 6y ago

Classic market failure problem.