The $2 Billion Bomb: Rewards for New Antibiotics

When legislators and policymakers try to do just about anything to encourage innovation—especially in drug research—it rarely works. This is because, for the most part, they have absolutely no idea what it takes to discover a drug. None.

So, it should be of no surprise that H.R. 1776: Improving Access To Affordable Prescription Drugs Act, recently introduced by Rep. Jan Schakowsky (D-IL) is a big mess. The bill is supposed to control drug prices, while at the same time, offering a cash prize for any individual or company that brings to market a new antibiotic that has certain properties.

If anyone knows about what it takes to discover and develop new antibiotics, it is Council advisor Dr. David Shlaes, a world-renowned expert in the field. Dave is decidedly unhappy with H.R. 1776. Here are a few of his comments:

• "It is great that someone in Congress wants to address the market failure for antibiotics with a government funded pull incentive. We’ve all been waiting for this news for a long time. But – it looks like we’ll have to keep on waiting.  This bill is so full of poison pills that my only hope is that it never passes as is."
• "The prize is to be doled out by the Director of NIH. Although the NIH has a small number of antibiotic experts in its ranks, it has been pretty much the opposite of an antibiotic R&D powerhouse for decades." 
• "The company has to set a “reasonable price” for the product (whatever that means) and must at the same time give up exclusivity.  How does that work? Obviously, if you no longer control the patent on the product and you are immediately beset by generics, there is no motivation to spend money on marketing or anything else." 
• " In addition, any marketing materials must be submitted to NIH, CDC and FDA before release That guarantees a delay of 10 years." 
• "It is very disturbing, frustrating and demoralizing (but not surprising) to see such an important idea, pull incentives to stimulate antibiotic research and development, receive such a bludgeoning at the hands of the political party that should know better."

To really understand the deficiencies of this legislation, you can read Dave's entire blog piece on the subject here. Highly recommended.