From GAIN to Bain

  • by: |
  • 08/15/2012
Some intriguing insights from a recent Pink Sheet article on the GAIN Act.

The passage of the Generating Antibiotic Incentives Now (GAIN) provisions in the latest PDUFA agreement is being applauded for adding incentives like an additional five years of market exclusivity and priority review for qualifying antibiotics – but they may not be the game-changing incentives as some in the industry hoped.

High development hurdles for antibiotics, the availability of low-cost generics and reimbursement challenges for pricey new antibiotics are likely to keep most investors on the sidelines at least until big pharma starts to show more interest in the space.

The pharmaceutical industry, particularly at the top tier, has largely abandoned the therapeutic area because of development, regulatory and commercial challenges.

GAIN, which had been a pending stand-alone bill for years, was created as a partial solution to the dilemma, driven by groups like the Infectious Diseases Society of America, the Robert Wood Johnson Foundation and the Pew Health Group’s Antibiotics and Innovation Project as well as major companies in the space – what one lobbyist called the perfect storm of academia and industry, with industry using the thought leaders’ support to make it happen on the Hill. GAIN is intended to encourage development of new antibiotics as part of an effort to combat growing antibiotic resistance by providing incentives to companies developing drugs that target resistant pathogens.

One of the key challenges facing antibiotic drug developers is uncertainty in the approval pathway for antibiotics. One of the provisions in GAIN requires FDA to review antibiotic guidelines and update them where appropriate. The agency already has been working to update guidance for industry by type of infection, as required by the previous round of PDUFA, and has turned its efforts to complicated urinary tract infections, acute bacterial skin and skin structure infections, and community- and hospital- acquired pneumonia. Nonetheless, the clinical trial requirements, statistical analyses and endpoints in some cases are considered overly burdensome by many in the industry.

A more dramatic change to FDA’s approval requirements for antibiotics could spark a sea change in antibiotic R&D. Industry had pushed Congress to consider more aggressive changes that would reduce the clinical trial requirements for new antibiotics by allowing drug makers to study new drugs by pathogen rather than by indication, or only in the most severely ill patients, which would raise the threshold for safety and create a market for antibiotics similar to that for orphan drugs, where high-priced treatments are used in only a small subset of critically ill patients. IDSA asked Congress to consider such an approach, which it calls the Limited Population Antibacterial Drug mechanism.

Beyond the regulatory hurdles, generic antibiotics are widely available, posing reimbursement challenges for expensive new brands that do reach the market. Antibiotics for resistant pathogens are mainly used in hospitals so they face the added pressure of needing to secure placement on hospital formularies. On top of all that, antibiotics are prescribed for short-course therapy, generally just a matter of days, which limits their sales potential compared to chronic treatments, and in turn, limits a company’s return on investment.

The increasing prevalence of drug resistant pathogens means there is a clear need for new agents – and a significant market opportunity for drugs that can fight resistant strains and demonstrate a compelling pharmacoeconomic value story in the process, mainly by reducing the length of time patients are required to stay in the hospital. Almost two million Americans per year develop hospital-acquired infections resulting in 99,000 deaths, according to the Centers for Disease Control and Prevention. Sepsis and pneumonia alone killed nearly 50,000 Americans in 2006 and cost the health care system more than $8 billion.

How much antibiotic developers will benefit from the GAIN provisions depends on the molecules in development. The five years of additional market exclusivity, which comes on top of the five years of exclusivity already granted to brand manufacturers through Hatch-Waxman, is a big incentive but only in cases where patent protection doesn’t run in parallel.


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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