FDA considers changing reimbursement model for new antimicrobial drugs

Scott Gottlieb

The FDA is discussing changing the reimbursement model for certain new antimicrobial drugs that target multidrug-resistant infections, FDA Commissioner Scott Gottlieb, MD, said today.

“Developing new drugs is a costly endeavor,” Gottlieb said in a statement. “But the current reimbursement model, where drugs are reimbursed based on each episode of their use, presents incentives that run contrary to effective stewardship over new antibiotics that might be highly effective against very rare and dangerous pathogens.

“When such drugs become available, we try to use them sparingly, lest pathogens become overexposed to a new mechanism of attack and develop resistance to it. So, providers have imposed understandable restrictions on the use of such drugs. While this represents responsible stewardship, it also means that a novel antibiotic may have a very limited market. If product developers know that they will not be able to recoup their investments, there may be reduced incentive to invest the significant money needed to discover and develop such a drug.”

Gottlieb said the FDA is discussing with other agencies, including CMS, a licensing model that would replace the current approach of paying for drugs on a per-use basis. The plan would include charging acute-care institutions that are most likely to prescribe these medicines a fixed licensing fee for access to the drugs, allowing them a certain number of annual doses.

“This is similar to the way that software often gets reimbursed, where institutions pay a licensing fee for a fixed number of installations,” Gottlieb said. “We have been speaking to our counterparts at CMS as to whether such an approach is feasible, whether it can be formulated as a demonstration, and as a demonstration, whether it would have the intended public health records.”

He said the FDA plans to release more information soon on the proposed reimbursement model.

“Such an approach potentially delinks the return on investment on an important antimicrobial drug from the volume of that drug that’s used,” Gottlieb said. “This would achieve an important public health purpose since these are drugs that we would want to hold in reserve.”

The FDA also issued a draft guidance to assist the development of drugs using the Limited Population Pathway for Antibacterial and Antifungal Drugs, (LPAD) pathway, which was established by Congress under the 21st Century Cures Act.

“The FDA believes this program will advance development and approval of antibacterial drugs to treat serious or life-threatening infections in limited populations of patients with unmet needs,” Gottlieb said.

According to the draft guidance, the agency will consider “the severity, rarity or prevalence of the infection that the drug is intended to treat” in reviewing applications submitted under the LPAD pathway.

Availability or lack of an alternative treatment for a limited population also will be considered in the decision. Gottlieb said the guidance “will also assist companies in developing labeling, including prescribing information, patient labeling and carton/container labeling, to inform the medical community that the drug was approved under the LPAD pathway based on a benefit-risk assessment in a limited population.” – by Bruce Thiel

Reference:

FDA. Pathway for antibacterial and antifungal drugs: guidance for industry – draft guidance. 2018. https://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM610498.pdf. Accessed June 12, 2018.

FDA statement. https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm610503.htm. Accessed June 12, 2018.

Disclosure: Gottlieb works for the FDA.