Antibiotic resistance is a growing concern across most parts of the world. Multi-drug resistant pathogens are emerging that used to be treated easily with typical antibiotics, leading to patient suffering, hospitalizations and excess spending, and thousands of deaths each year in the US directly attributable to drug-resistant infections. For many common bacteria, resistance rates can be over 30-40%, and the impact on patients continues to rise.

Resistance occurs when bacteria adapt to the antibiotic’s mechanism of action, such as by changing how they produce their cell wall. This is caused by a number of factors:

• Overuse – 30% of outpatient antibiotic courses are unnecessary in the US, e.g. in viral infections
• Misuse - some patients stop taking their regimens before their infection is completely cured
• Poor stewardship – using agents reserved for certain situations inappropriately causes resistance in cases where they were intended
• Use in livestock – unregulated use drives resistance that can be transferred to humans

Arix has invested in two anti-infective companies, Iterum and Amplyx, with the hope of developing new treatments for resistant pathogens. Iterum is developing a new drug in the class known as -penems for urinary tract and abdominal infections. Amplyx is developing first-in-class antifungals for vulnerable, immunocompromised patients, such as those undergoing chemotherapy. Both are being developed in both intravenous and oral form, so patients can take them from home and leave the hospital earlier.

Reimbursement for anti-infectives continues to be a concern. Anti-infectives given in the hospital to the sickest patients have been reimbursed in the US under the inpatient diagnosis related group (DRG) reimbursement scheme. This system pays hospitals a fixed amount for each hospital day based on the patient’s principal diagnosis and how sick they are. As a result, hospitals are incentivized to keep costs low, such as by using a cheaper anti-infective first. This comes as many hospitals are stressed with operating margins in the range of 2-4%.

In 2019, there have been several signals from the Centers for Medicare and Medicaid Services (CMS) and Congress that there may be a change in policy soon.

• Seema Verma, administrator of CMS, announced a proposal in August 2019 to reimburse hospitals for qualified antibiotics under the New Technology Add-on Payment (NTAP), increasing the payment level from 50% to 75% of costs, to be paid on top of the DRG payments. It also introduced a severity adjustment to ICD-10 diagnosis codes, allowing hospitals to qualify antibiotic resistant infections as a complication/comorbidity (“CC” designation) to be paid more under DRGs
• In 2018, Congress considered the REVAMP Act to provide 12 additional months of exclusivity to drugs designated as priority anti-infectives, which could be worth more than $1 billion
• Another bill on Congress called the DISARM Act was introduced earlier in 2019, which would build on CMS’s proposal to increase reimbursements for anti-infectives

Policymakers are realizing that reimbursement policy can have important implications for antibiotic resistance. First, this would likely lead to earlier definitive treatment for elderly patients who may have comorbidities that put them at risk for complications if they do not receive the newest antibiotics. Second, it could reduce further development of resistance by improving stewardship. Ideally, improving reimbursement will also spur new innovation to add additional weapons in the anti-infectives arsenal.

World Antibiotic Awareness Week takes place 18-24 November 2019.

Source: The Center for Disease, Dynamics Economics & Policy. ResistanceMap: Antibiotic resistance.