• Don’t cut the CARBs

    Building on the ambitious Combatting Antibiotic-Resistant Bacteria (CARB) process, the President’s budget request this week called for dramatically increased funding, $1.2 billion. This funding request is at the correct magnitude and demonstrates appropriate balance between various priorities. While Congress will surely have views on the specifics, I hope for broad consensus that very bold action must be taken along the general lines described by the President. Paying $1.2 billion dollars a year as an “insurance premium” to avoid the end of antibiotics is a critical policy priority. I suspect that every scientist and policy wonk working on these issues would agree with this statement.

    We know resistance warrants at least a billion-dollar annual investment in the US, based on the economic and policy work undertaken over the last few years in the US (the ERG report for HHS and the CDC Threat Assessment), England (the Chatham House working group and the O’Neill Review on AMR), the EU (DRIVE-AB), and the WHO draft Global Action Plan on AMR. The policy consensus is strong to act boldly.

    This week the House Energy & Commerce Committee released a discussion draft of legislation under the 21st Century Cures Initiative (full text here). The proposals fall short of what we need.  Solving this problem will require spending real money.

    Section 1061 permits early release of antibiotics with less data on safety and efficacy, together with a more restrictive label. This provision is no surprise and has been in the works for a while (prior versions here and here). While it will undoubtably get antibiotics to the market more quickly, that will not be a panacea for antibiotic innovation unless we fix reimbursement. We will get some drugs several months earlier with thinner data packages on safety and efficacy; as a result, these drugs will not sell well until better data is available. Innovation will not be rewarded.

    Section 1062 updates how we test for antibiotic susceptibility and how that is communicated on the drug label. My concern is whether this provision would further encourage off-label use of antibiotics. Antibiotic should be used with better evidence of safety and effectiveness.

    Section 1063 creates “wildcard exclusivity,” a radical and controversial departure from our 226-year history with US patent law. The Constitution (Art. I, sec. 8, cl.8) gives Congress the authority to create IP:

    To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.

    The “exclusive right” is tied to the invention itself (“their respective writings and discoveries”). If you discover a new drug, you get a patent on that drug.

    Section 1063 breaks from the Constitutional standard and historical practice by offering a 12 month period of exclusivity on a completely unrelated drug. Create a new antibiotic, and the reward is a fully transferrable 12 months of exclusivity that could be given to a drug for cancer, heart disease or Hepatitis C. This reward is very indirect and inefficient, and can be quite costly as it will protect billions of dollars of drug sales from generic entry. The provision also calls for “donations” to the NIH and patient access programs, but understand that all of these funds come from our health insurance system through higher drug prices when generic drugs are delayed. It will also be very difficult to control this idea. If antibiotics are worthy of wildcard exclusivity, why not cancer, Alzheimer’s and every orphan drug?

    Data supports the need for billion-dollar incentives for antibiotics; wildcard exclusivity is just a poor way to achieve that goal.

    Finally, Section 1064 boosts the hospital DRG for the cost of new antibiotic drugs. But this fix only helps inpatient antibiotics (typically IV drugs) and we also need new oral antibiotics. While it increases payments to hospitals, there is no guarantee of any increase to companies unless they market to hospitals and convince them to pay more. Finally, this does nothing for reimbursement for infection control, diagnostics, vaccines, and antibiotic stewardship. Medicare should pay for those things too: we know that infection control has been essential in bending the curve on MRSA.

    The US Congress and the Administration have an opportunity to work together to truly reform the broken business model for antibiotics. Let’s make policy based on the best available evidence.

    Prior TIE coverage on antibiotics.


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  • Homegrown bioterror

    Conventional wisdom says “superbugs” emerge in places like India or Africa and move to the US through global travel. That was certainly the case with the Ebola virus recently and the NDM-1 bacteria from India.

    However, an interesting research letter in Nature Genetics examined the global evolution and spread of a particularly nasty epidemic caused by Clostridium difficile. Last year, the CDC listed C. difficile as one of the top 3 antimicrobial resistance threats in the US. This disease already kills more than 14,000 Americans a year and sickens a quarter million more, a bigger toll by far than the global death count from Ebola.

    But before Gov. Christie tries to close the borders, this paper tells us that epidemic strains of C. difficile first emerged in North America, especially in the northeast US.

    The study comes from the Wellcome Trust Sanger Institute in Cambridge, England, applying whole genomic sequencing to 151 clinical samples collected around the world over the past 25 years. Here’s the map, showing the emergence of two distinct fluoroquinolone-resistant (FQR) epidemic strains from the US (red) and the US/Canada (blue):


    This highly infectious disease originated in North America and spread to health care facilities across the globe.  Note also the subsequent transmission within the UK (box on right, red lines) after the 4 initial “invasions” from the US (directly and via France).

    Why did FQR C. difficile emerge in the US? It is probably our own fault, for overusing antibiotics:

    Furthermore, our data suggest that the acquisition of resistance to commonly used antibiotics is a major feature of the continued evolution and persistence of C. difficile 027/BI/NAP1 in healthcare settings. It is notable that fluoroquinolone antibiotics were one of the most commonly prescribed antibiotic classes in North America during the late 1990s and early 2000s, such that it is during this time that selective pressure for the acquisition and maintenance of fluoroquinolone resistance within healthcare settings would have been at its highest, explaining the near simultaneous emergence of more than one clone of FQR C. difficile 027/BI/NAP1.

    A second important finding related to agriculture, food and the environment:

    The derived phylogeny suggests that C. difficile 027/BI/NAP1 has transmitted between human and non-human sources in both directions. For example, multiple isolates from food sources or animals in Arizona were derived from a historical Arizona human isolate (BI-2 from Tucson, 1991). In a sub-lineage of FQR1, a number of isolates from food sources or animals were found in the exact same position in the phylogeny as human isolates, suggesting an identical genotype; the tip of this sub-lineage being a human isolate from New Jersey (BI-13). These data suggests C. difficile 027/BI/NAP1 transmits through the food chain, and human C. difficile could contaminate the environment. However, a more comprehensive strain collection would be needed to confirm this. (emphasis added)

    Re-read that last sentence:  we really don’t know the scope of transmission because of the small number of samples in this study (n=151). The recently-announced US National Strategy to Combat Antibiotic-Resistant Bacteria calls for much greater investment in “One Health” surveillance so we can better understand what we are up against. Considering the threat, this should be a major priority.


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  • 10 million deaths by 2050 from antimicrobial resistance?

    This morning, the Prime Minister of the UK announced the first findings from the Review on Antimicrobial Resistance, chaired by economist Jim O’Neill. The numbers are eye-popping: 10 million deaths by 2050, with equally huge global economic costs. These numbers dwarf the estimates in the 2013 CDC Threat Assessment.

    All microbial resistance is included in these estimates, bacteria, viruses, parasites and fungi. Much of the global burden of resistance will come in malaria, TB and HIV, in addition to bacteria.

    These numbers are based on model projections created by KPMG and Rand Europe for the Review Commission. Like all models, they are open to criticism, but many are viewing these estimates as a “worst case” scenario, assuming the governments of the world don’t achieve global collective action to address the problem of antimicrobial resistance.

    But this might not represent the worst case. The models do not include true pandemics such as the 1918 influenza. Last year, no one would have guessed that 2014 would be the year of Ebola.

    My bottom line: these model estimates require much careful additional work, but correctly identify the magnitude of the problem and the potential macroeconomic impact. It should also help us frame an appropriate response.


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  • The Obama plan for combatting antibiotic resistance is out

    After several months of intense study, President Obama released a package of actions today designed to combat antibiotic resistance.

    The most surprising action item is the creation of a one-time $20 million prize for a new point-of-care diagnostic for highly resistant infections. That is a big deal, on top of the £10 million UK Longitude prize on the same topic. Hopefully, HHS (NIH & BARDA) will coordinate with the UK on this prize. This is very encouraging news.  In the 2014 ERG Report, we found a MRSA rapid point-of-care diagnostic to have a value to society exceeding $22 billion.  These prizes are bargains – if they work, we get an exceedingly valuable diagnostic; if they don’t, no federal money is spent.

    President Obama issued an Executive Order to direct federal agencies to implement the President’s Council on Science and Technology (PCAST) Report. We will also have a National Strategy with Cabinet level leadership, led by HHS with Defense and Agriculture.

    Additional limits are proposed on antibiotic use in agriculture, above and beyond the recent FDA actions, especially for classes useful for humans. This is a “One Health” strategy, using WHO language, a combination of human and animal health, including food safety and the environment. For antibiotics, we are just now understanding the spread of antibiotic resistance genes in the environment and the interaction between animal use and human health is a serious concern. 80% of US antibiotics by weight are used in agriculture.

    I was also encouraged by the emphasis on international coordination.

    Actual texts will be released in an hour. I’ll update with links.

    UPDATE:  Executive Order here. The PCAST Report is here. The National Strategy is here.

    Key proposals from PCAST today, my comments in bold italics:

    • Double federal spending on antibiotic resistance research, surveillance and prevention, an additional $450 million per year. This is a huge increase, exactly what is needed. Will need Congress to appropriate the funds.
      • including $90 million in additional CDC grants to strengthen state and local public health surveillance and response to bacterial resistance
      • National surveillance based on genomic sequencing ($190 million per year)  A good time to be a post-doc in whole genomic sequencing of bacteria
      • $150 million over 7 years to basic research to support non-traditional approaches to overcoming antibiotic resistance
      • $25 million per year to develop alternatives to antibiotics in agriculture.  Give the farmers options – another good idea.
      • $25 million to create a national clinical trials infrastructure for antibiotics.  Will reduce costs for everyone.
    • Replenish BARDA funding for public-private partnerships in antibiotic R&D, with approximately $800 million per year, roughly equal to one new antibiotic per year. This is huge – a stunning announcement and precisely what many have been privately calling for.  BARDA has supported many key antibiotics in the pipeline. This announcement is a prominent vote of confidence in BARDA’s model.
    • Make antibiotic stewardship a condition of participation in Medicare by 2017 and a condition for receiving federal grants.  Hospitals were expecting this.
    •  $25 million prizes for “rapid, inexpensive, and clinically relevant diagnostics that can substantially improve therapy in important clinical settings.”  Joins the UK Longitude Prize and promises to work with prizes from other nations and private foundations. This is a larger prize than reported separately by the White House and contemplates multiple prizes, not just one.
    • “PCAST strongly supports FDA’s new Guidances 209 and 213, designed to promote the judicious use of antibiotics in agriculture.” No solid action beyond existing FDA Guidance.
    • “Vigorously support” the WHO Global Action Plan Good news, as the WHO Plan will need resources to be effective globally.


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  • Hearings on new business models for antibiotics

    I testify on Friday Sept 19 at the House Energy & Commerce Committee hearing, part of the ongoing series 21st Century Cures. I call for dramatic changes in how we create, use and pay for antibiotics.

    As we seen before here, the antibiotic business model is broken. In a recent study undertaken by the Eastern Research Group for HHS/FDA, none of the six antibacterial targets yielded an expected net present value even close to the $100 million benchmark (previous TIE coverage here, with charts). In all six, the 90% confidence interval included negative NPVs. Few businesses will commit millions to a long-term R&D program with so little upside potential. This stands in stark contrast to the remarkable social value of antibiotics, even when you limit that calculation to quite direct effects (you don’t die). More expansive definitions would include the things that antibiotics make possible, like surgery and chemotherapy (Ramanan Laxminarayan is working on those numbers).

    If the business model is broken, how do fix it? Download testimony here; download ppt here.


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  • Higher quality antibiotics

    Sometimes a single chart can jumpstart a movement.  This chart certainly qualifies:


    Looking at this, you might conclude that the 1980s and early 1990s were the “glory years” for new antibiotic introductions.

    But that would only be partially correct. Twenty of the new antibiotics on this chart were not commercially or clinically successful and were ultimately withdrawn or discontinued from the market. An additional six antibiotic drugs were formally withdrawn for safety-related reasons, while for others, safety questions played a role in limiting clinical and commercial success.  Since 1980, antibiotics have suffered market withdrawals at triple the rate of all other FDA-approved drugs.

    High-quality antibiotics High-quality antibiotics

    Approval of these drugs didn’t help patients much, nor were the companies rewarded because sales were low. In short, we should not celebrate antibiotic introductions from the 1980s and early 1990s in the way the chart above implies. When discontinued and withdrawn drugs are backed out, the chart looks quite different:


    Antibiotics look pretty steady by decade. In other data (not shown) antimicrobial innovation shifted in a massive way to anti-retroviral drugs to treat HIV and to a lesser extent, fungi.

    Governments and think tanks are mooting many proposals to boost antibiotic innovation. We must focus on the quality of the new drug, not just the sheer quantity.

    h/t to the good folks at CDDEP for help with the charts and for cross-posting.


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  • Halbig

    As Nick predicted, the DC Circuit vacated the prior opinion and will rehear the case en banc. See Jon Cohn for the plain language context.

    First round of briefing is due Oct. 3. Oral arguments Dec. 17. Order here.

    Expect a flood of amicus briefs. We will cover the interesting ones.


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  • Antibiotic prizes

    From the New Yorker article today on the economics of Ebola (introducing a new word, Ebolanomics):

    What people in the West need, health officials agree, is new drugs that we can keep in reserve against an outbreak that regular antibiotics can’t contain. 

    The article suggests prizes and delinkage (paying for R&D without linking revenues to volume), quoting me.

    Chatham House paper here (Chatham House website) or here (SSRN); Yale J Health Policy, Law & Ethics here; the Strategic Antimicrobial Reserve is also discussed in this 2010 Health Affairs paper.


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  • 4.683 million unanswered questions in Halbig

    Appeals will continue, but let’s take today’s Halbig decision at face value. How much will this decision cost the working poor? The amount varies with income and other variables, but for a 40 year old individual making $30,000 a year, the tax credit was estimated at $1345 (KFF estimate here). Retroactive tax bills under Halbig will be significant and everyone impacted will have trouble paying for health insurance going forward (about 57% of exchange participants were previously uninsured, according to a KFF survey).

    How many people will be hurt?

    At first glance: anyone receiving tax credits in the 27 states with federally facilitated exchanges (FFEs): (AL, AK, AZ, FL, GA, IN, KS, LA, ME, MS, MO, MT, NE, NJ, NC, ND, OH, OK, PN, SC, SD, TN, TX, UT, VA, WI and WY; KFF list here). But the government reports 36 states as having FFEs, including 9 additional states not included on the list above (ID, NM, AR, DE, IL, IA, MI, NH, and WV; more on this below). Using this broader definition, 4.683 million Americans may now have a surprising tax bill and be at risk of losing health insurance, being told retroactively that they didn’t qualify for tax credits after all. The breakdown of the 4.683 million at-risk enrollees by state (based on this ASPE report and these state-specific excel files):

    FFE statesWhy are the additional nine states included? Seven are partnership states and two (ID/NM) have short term agreements.

    Idaho and New Mexico couldn’t set up their IT in time and signed agreements to allow CMS to start up their exchanges until the states are ready to take over. Will 95,156 of their residents (69,780 and 25,376, respectively) have to refund their tax credits until the switch occurs?

    The data from ASPE includes as FFE the seven states with “partnership” exchanges (AR, DE, IL, IA, MI, NH and WV). Do these arrangements count as “an Exchange established by the State?” If so, 527,000 people don’t lose their tax credits today. But if this model works, why can’t any state negatively affected by today’s decision simply sign a quick “partnership” agreement with CMS? If this works prospectively (as was suggested at oral arguments before the 4th Circuit in a related case), what about the tax credits from 2014? Will Halbig just punish about 4.683 million working poor for 2014 – but not 2015 and beyond – if quick agreements are signed by CMS and the states?

    But some state-based exchange states are in flux, which could increase the totals above. Oregon is in the process of switching to a FFE because of an epic website failure. Does that mean that 54,663 Oregon residents lose their tax credits once the switch occurs in November? Maryland is also considering the federal exchange after start up troubles. In Maryland, the number at risk is not separately reported, but could be estimated at 58,271 (86% of 67,757; 86% is the overall percentage of FFE enrollees qualifying for financial assistance). No one has told the working poor in Oregon and Maryland that over 110,000 people could lose these tax credits.

    And what about states that might outsource their exchange to another state? (MA, MD, MN and NV are considering this). Does an exchange operated by another state qualify as “an Exchange established by the State” under IRC sec. 36B(b)(2)(A) (emphasis added)? Seem likely, but if not, up to another 170,000 are at risk.

    Some special situations deserve mention. In Utah and Mississippi, the state runs the SHOP exchange and the federal government runs the individual exchange. Does that mean that if you are insured through a small business in Biloxi or Provo you keep your tax credits, but if you purchased as an individual you owe a tax bill?

    In addition, consider the seven “plan management” states? (KS, ME, MT, NE, OH, SD, VA). Some functions in these FFEs are performed by the states by agreement with CMS. If these ostensible FFE states are actually “established by the State,” then 442,000 people keep their tax credits. (Kansas claimed in amicus briefs that their citizens will lose tax credits, which is inconsistent with this argument).

    ASPE also collected racial data:



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  • Crowd sourcing fraud detection

    Medicare and Medicaid have active fraud detection units that are setting records for recoveries. The HHS effort is not entirely in-house, but also partners with insurance companies and other stakeholders to detect fraud. And yet the programs suffer billions in “improper payments:”


    Source: GAO 2012

    We need some fresh ideas. Perhaps we could use crowd sourcing, like the work that Charles Ornstein at ProPublica is doing with Medicare biller data that was recently made public:

    On Friday, I emailed you my story about how a misdirected fanny pack unraveled a Medicare fraud scheme.

    I’m back today with another story that was buried in Medicare’s doctor data dump, about why Illinois leads the nation in group psychotherapy sessions for patients. I found three ob/gyns and a thoracic surgeon who were paid for more than 37,000 psychotherapy sessions in 2012—more than all providers in the state of California COMBINED…

    The billings for group psychotherapy reveal other unusual patterns. A Queens, N.Y., primary care doctor, Mark Burke, was paid for more sessions than anyone else in the country — 20,841. He accounted for nearly one in every six sessions delivered in the entire state of New York in Medicare, separate data show. He did not return messages left at his office.

    Another large biller was Makeba Gordon, a social worker in Detroit. She was reimbursed for nearly 5,000 group therapy sessions for her 26 Medicare patients, an average of 190 each. She also billed for 2,820 individual psychotherapy visits for the same 26 patients, who allegedly would have received an average of 298 therapy sessions apiece in 2012. Gordon could not be reached for comment. [see the Chicago Tribune].

    If we really wanted to jumpstart fraud detection, we’d give a reward for identifying cases like this. Whistleblowers can receive 25 – 33% of the settlement, but crowd sourcing (and investigative reporting like this) won’t qualify because the key data was public, hidden in plain sight.

    UPDATE: The FY 2013 improper payments numbers didn’t report Medicare Part D, but note how the estimates vary over time:

    2013 chartSource: GAO 2014

    UPDATE 2: Good points from twitter & email:

    1.  Not all “improper payments” are fraud. Fraud requires proof of intent; “improper payments” could be innocent mistakes – see the definition in the GAO reports (h/t Paul Van de Water)
    2.  Before we heap condemnation on the gov’t for high rates of “improper payments,” what is the rate for comparable private businesses? (h/t Ezra Abrams)
    3.  HHS has a small rewards program for information leading to recoveries, but it is capped at the lesser of 10% of the recovery or $1000. (Details here.) Remove the cap and publicize the program = crowdsourcing fraud prevention.” (h/t @FrankPasquale)


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