• The SGR fixed more than we thought: gainsharing

    In addition to the well-publicized aspects of the SGR fix, the legislation also addressed a long standing problem in the fraud and abuse laws that limited hospital “gainsharing” programs.

    Gainsharing is similar to the ACO “shared savings” bonuses paid by Medicare if the health system achieves cost and quality targets, but classic gainsharing agreements are entirely private (i.e., between health systems and physicians who practice there).  For example, a hospital and a group of surgeons might sign a gainsharing agreement that shared savings in the OR from more economical ordering and use of medical supplies and devices.

    The catch was Section 1128A(b)(1) of the Social Security Act, which prohibited any payments by a hospital to a physician as an inducement to reduce or limit services provided to Medicare or Medicaid beneficiaries who are under the direct care of the physician. Hospital counsel worried — with good reason — that a gainsharing program would be considered a payment to induce a reduction in services, resulting in very substantial civil monetary penalties.

    Even if the services were wasteful, unnecessary or dangerous, federal law prohibited these gainsharing payments. I co-authored a paper for the American Health Lawyers Association describing the problem in detail – in 1999.

    Fast forward 16 years and Congress has finally acted, by adding the words “medically necessary” to the statute.  Gainsharing is now permitted, so long as medically necessary services are not reduced or limited.  Alternative payment models now need not fear the CMP as much (see my 2014 TIE post on alternative payment model language in the SGR fix bill).

    For more on this gainsharing development, see a briefing by my former firm, MWE.


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  • Do we get MRSA from pigs?

    Eli Perencevich and colleagues at the University of Iowa continue to publish interesting work on the epidemiology of MRSA, using data their patients in the VA and their farm-state location near many animals.

    In a previous study, they found that living within 1 mile of a high-density pig farm nearly doubled the risk of colonization with MRSA upon admission (ICHE, 2014 Feb;35(2):190-3). Building on that work, they now report (in Antimicrobial Resistance & Infection Control) the links between nasal colonization and MRSA clinical infections (many are colonized, but fewer are clinically sick at the moment), by genetic testing of both samples from the same patients. Paired samples like this are rarely tested.

    They found that paired samples were genetically and phenotypically indistinguishable, suggesting that colonization was the source for clinical infection. The more surprising result was that classic “livestock-associated MRSA” or LA-MRSA spa types were not identified in these patients:

    Livestock-associated MRSA does not appear to contribute significantly to the prevalence of MRSA colonization or the burden of MRSA infections in ICVAHCS, despite the high density of livestock in the region.

    Before you (rashly) conclude that high-density pig farms are not a threat to human health, consider the alternative:

    Taken together, these results suggest that swine may be a source of non-LA-MRSA colonization and infections in humans.

    An excellent research question, indeed.


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  • The National Action Plan on Combating Antibiotic Resistance

    Antibiotic resistance is a complex social problem, with alarming global implications. That’s why it is exceedingly good news that the White House released the full National Action Plan today.  We’ve known that antibiotic resistance is a problem for more than 70 years, but today is the first time any Administration has taken the threat this seriously.  It’s the boldest move by any President on this issue. Ever.

    Do I wish it had gone further? Sure, but I’m an academic researcher. I always have new questions to explore. The report needs more heft on what happens to reimbursement after FDA approval, for instance.

    But look at the solid targets across many areas, the goals set in agriculture, the emphasis on global and regional coordination, and the significant attention to diagnostics.  Not just a good first step, but a dozen good steps.

    Congress should fund this as an insurance policy against a post-antibiotic era.


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  • UK Report: Steps we can take now on antimicrobial resistance

    In London this morning, the second Report on antimicrobial resistance has now been issued by Jim O’Neill. While many complex issues require further study on resistance (prior TIE posts here), the Report finds sufficient evidence on five issues to warrant action now:

    1. Increase basic research funding, primarily in the university setting;
    2. Extend the lives of existing drugs;
    3. Create and deploy diagnostics to reduce unnecessary use;
    4. Invest in human capital – the grad students, post-docs, research teams, and ID physicians who will be on the front lines of this effort for decades; and
    5. Build a modern surveillance system for infectious diseases, with digital capabilities in real time.

    O’Neill is right that there is broad consensus in the policy community for all five, and has been for some time, with the possible exception of number 4. The human capital issues have only been recently raised with sufficient vigor, most notably by our colleagues over at Controversies in Hospital Infection Prevention (especially the famous dumpster fire post and its sequel – instant classics). So let’s focus on the human capital section of the O’Neill Report.

    First, follow the money, and ID docs are among the worst paid specialists in the US. Train for several additional years, take difficult call schedules, but make less money than your peers:

    doc pay

    Second, building on the analysis by the CHIP crew, when medical residents match in the US, one of the few unfilled specialties is ID, with a large number of programs having unfilled slots. Every unfilled slot is a loss to future efforts to control hospital infections. Applications for the better paid specialties are robust by comparison:


    Third, the Report found evidence that citation rates are lower for journals specializing in resistance and microbiology, which makes academic careers and grant funding more difficult when compared to “hot” fields like cancer.

    I also worry about the effect of flat to declining research expenditures in bacterial research. R01 grants are always difficult to start a career as a researcher, but in bacterial fields they are harder still. Given the robust funding over the past decade for some biodefense threats like anthrax or plague, a young researcher might reasonably choose these organisms instead of those responsible for large impacts on current human health, such as gonorrhea, acinetobacter, e.coli or staph.

    For the White House plan on these issues, see Maryn’s summary here. Hopefully, Congress will work with this budget proposal and move some significant funding forward.


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  • The puzzle of antibiotic innovation

    Cross-posted from Health Affairs Blog

    Dame Sally Davies, the Chief Medical Officer of England, warns that we are approaching an antibiotic apocalypse. A former chief economist at Goldman Sachs estimates that unless dramatic action is taken now, antimicrobial resistance could kill 50 million people a year and cause $100 trillion in cumulative economic damages. In the US, dire warnings have issued from the CDC, the President’s Council of Advisors on Science and Technology, and the President himself through an Executive Order on Combating Antibiotic-Resistant Bacteria in September 2014 (summary here). The President’s new budget asks for $1.2 billion to be spent on antibiotic resistance.

    But last week, the science press breathlessly celebrated the discovery of a new antibiotic, teixobactin, cultured from soil samples collected in a grassy field in Maine (the study was published in Nature). Crisis over?

    Not so fast. Teixobactin has only been studied in mouse models, not humans. The point estimate failure rate for antibiotics from early discovery stage to actual drug approval for humans is 97% (only 3% survive) (see the ERG Study for the US Government, page 3-9). After approval, most antibiotics fail in the marketplace for commercial and safety reasons; antibiotics suffer market withdrawals at triple the rate of all other drugs (JLME).

    The Price-Volume Model

    But let’s assume that teixobactin makes it through 5-10 years of clinical trials and is approved by the FDA with great fanfare. Hundreds of millions will have been invested in these clinical trials. How will the company see a profit on their investment? A recent study conducted by the Eastern Research Group for the US Government suggests the company will lose money, even on a “successful” antibiotic.

    Under the existing “price-volume” model, drug companies make money by selling drugs, either with high prices, high volumes, or both. The October 2014 Health Affairs issue on specialty drugs highlighted many examples, including the new drugs for Hepatitis C.

    For antibiotics, the price-volume model is broken. For excellent clinical reasons, new antibiotics are adopted very slowly. Hospital stewardship programs rightly control the use of new drugs to delay resistance. This is good news for patients, but terrible news for the companies trying to sell an innovative new antibiotic. Imagine if the new iPhone 6 could not be sold until all of the existing iPhone models were completely exhausted first.

    Due to the threat of resistance, antibiotic innovation cannot be based on high volume of sales. As Scott Podolsky notes in his new book The Antibiotic Era, the US overmarketed antibiotics in the 1950s and 1960s, leading to the crisis today.

    Looking Beyond High Prices

    High prices are also not a likely solution, as antibiotics are more substitutable than many drug classes and many generic antibiotics remain effective competitors. Higher prices would also give companies an incentive to overmarket, while worsening access to these drugs for millions of patients around the world who need effective antibiotics. For all the concern about future deaths from resistance, it is clear that more people die today from susceptible bacterial infections than resistant ones, meaning that improving access will save more lives.

    In an article published in this month’s Innovation issue of Health Affairs, my colleagues and I lay out alternatives to the price-volume model for antibiotic innovation. Fixing the business model is urgent if we want antibiotics to make it out of the lab and into the patients who need them.


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  • Agricultural antibiotics in the President’s budget request

    More than 80% of US antibiotic use occurs in agriculture, especially in the production of meat from poultry, pigs and concentrated feed lot operations for beef cattle. A useful recent survey of the research on this issue for poultry and pigs was just published by Aude Teillant and Ramanan Laxminarayan, Economics of Antibiotic Use in U.S. Swine and Poultry Production.

    Three main take-aways here:

    1. Most of the studies showing a significant benefit from antibiotics as growth promoters (AGPs) were conducted decades ago, before many farms improved animal husbandry practices and before resistance grew. Studies on more modern operations show little or no benefit from AGPs.

    2. New antibiotic classes have been rare, and it seems likely that new classes will be restricted to human use. If so, the agricultural sector needs to protect and extend the usefulness of the antibiotics currently available. Agricultural antibiotics are a limited resource; they should not be used when other substitutes (better practices, vaccination) are available.

    3. The President’s antibiotic proposal in the budget calls for $77 million for the Department of Agriculture, a four-fold increase (Maryn McKenna). These funds could help us dramatically reduce total US antibiotic consumption, improving human health while not burdening our farmers.


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  • 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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