• 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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  • Obama’s report on antibiotics

    Not to be outdone by the Prime Minister, President Obama’s Council on Science and Technology met this morning to approve their report on preserving antimicrobial effectiveness (PCAST webcast here; report won’t be public for a few weeks; my unofficial transcript is here: PCAST Transcript; I live tweeted #PCAST).

    Main points: we need surveillance, stewardship and new drugs. This is a “rate question” – we need to slow evolution and speed new drugs, balancing the two to protect public health.

    Recommendations to the President in bold, with my comments in italics:

    1. Stronger federal coordination on antimicrobial resistance, with cabinet-secretary level engagement and new responsibilities assigned to an existing White House office, overseen by a new Strategic Advisory Council. This seems a sensible plan, better than a new “bug czar” with no clear power.

    2. Surveillance: increased funding for state and local surveillance, praising existing CDC efforts. New efforts will expand use of whole genomic sequencing as a surveillance tool. We are operating blind without comprehensive surveillance. Excellent idea.

    3. New drugs:

    • Additional basic research funding. Absolutely essential. NIH funding for antibacterial resistance research is low and falling; we need to double real funding in this area over the next decade, giving researchers a sustainable research funding base.  

    US NIH Research Spending on Antimicrobial Resistance Research (FY 2010 – 2015, adjusted annually for US CPI, FY2010 base) (my data, not PCAST)


    • Streamlined clinical trialsThe FDA and EMA have already completed most of this work; this is an endorsement of that process. Antibiotic drug trial sizes are already quite small (n<200 in the treatment arm) and making them smaller will miss safety signals.
    • Build a national infrastructure for abx trials. Perhaps like the Duke Clinical Trials initiative?
    • “[T]remendous creativity” to develop alternatives to agricultural antibiotics. One way out of the political problem of agricultural use is to give US farmers cost-effective alternatives.
    • New economic models to decrease cost and risk, including:
      • BARDA-style grants. BARDA has been an important source of capital for antibiotic development and deserves more funding and a broader mandate.
      • Advance Market Commitments. A model from vaccine procurement, not really R&D.
      • Delinkage.  Don’t pay for antibiotics based on volume because of resistance. This is the focus of most of my academic work lately.
      • Tradeable vouchers.  A easily grasped but wrong-headed idea.
      • Prizes for diagnostics that shift clinical practice (mentions the UK Longitude Prize). A terrific idea, also one of the items modeled in the ERG Report.
    • Educate policy makers and the public on the need for increased public investment in these “partial public goods.Agreed. Continued antibiotic effectiveness are common pool goods, like fisheries.

    4. Stewardship: It is “time to use the levers of the federal government [CMS] ” to support stewardship. Need to require stewardship programs in hospitals, reporting measures, make federal grants conditional on stewardship. Did not mention increased funding or a “billing code” for stewardship or infection control.  Hospital CFOs see infection control as a cost center; help them do the right thing.

    5. Agriculture: This is a politically sensitive topic. Report concludes that we need more data on just how much of the problem is from agricultural use, but says we still know enough to act now with “judicious use” on the farm. Praises recent FDA voluntary action on label revisions for growth promotion, with the potential for additional action later, after seeing results. I was hoping for at least a discussion of something stronger, like a user fee on agricultural use to fund further R&D, or the Preserving Antibiotics for Medical Treatment Act.

    6. International cooperation: notes with approval the WHO Global Action Plan; did not mention the G7 process. The US has a global health security agenda for antibiotics. Right now, we have political mobilization at the highest levels ever seen. The US needs to build on that momentum and take Prime Mister Cameron up on his offer to address this at the G7 level, aggressively support this at the WHO; address resistance in the UN’s post-2015 development goals; and make it an important part of the global health security agenda. I should note that I’m a visiting fellow at the Chatham House Centre for Global Health Security, which has taken a leading role to address new business models for antibiotics, including the need for global cooperation.  


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  • New Massachusetts law on compounding pharmacies

    photo-11The NECC tragedy involving compounded drugs was the largest healthcare-induced public health tragedy in many years, killing 64 and sickening more than 700 others with vials contaminated with fungi (CDC). Massachusetts responded with a quick set of emergency regulations and inspections, but everyone knew more structured rules were necessary.

    Almost 2 years later, after careful study & following legislative action by Congress, the Massachusetts House and Senate passed an excellent new law (my NEJM profile of it is here), unanimously. Governor Patrick signed it this morning.

    The law is a model for the states, closing loopholes in a thoughtful way while effectively complementing the relatively weak new federal law. The only thing I’d change can be addressed in regulations: require compounding pharmacies to carry adequate insurance.


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