This one might tweak your brain. There would be MORE interest in developing new antibiotics if NO ONE needed them today. Huh? Yep... let’s think about it. Today, no one needs drugs for smallpox nor pandemic flu. But those have been developed precisely because... 1/18
...we KNOW that we MIGHT need them in the future. The US contracts through BARDA w/ companies to develop drugs & vaccines (commit to buying a certain number of doses/year at a guaranteed price) b/c it’s buying an insurance policy. Members of Congress understand that. 2/
Media seems to understand that. Academics understand that. Presumably the public understands that. Drugs we don’t need AT ALL today are still worth buying to have in our back pocket JUST IN CASE. Logical. It’s insurance! 3/
That’s exactly what’s most useful about new antibiotics. We know that bacteria are always evolving resistance to antibiotics we have (just like COVID is evolving to become resistant to the first vaccines). So we need to make different antibiotics to stay ahead of the bugs. 4/
That’s true for Covid vaccines and antibiotics. And YET! Why if we have managed to developed drugs for smallpox and pandemic flu strains are we not seeing much interest in developing new antibiotics to combat future superbugs? BECAUSE... we actually NEED them a little but NOW!
What?! Yes. New antibiotics are sometimes today for the few people who get infected w/ still rare bacteria that are resistant to all old antibiotics. The problem is that’s when they are paid for... ONLY when actually used. So revenues are low. 6/
And b/c latest antibiotics sell poorly, innovators/investors see no reward for next generation antibiotics. Yet their real value is in reassuring us against what’s coming for us in the future. Sadly, we don’t even talk about (let alone pay for) their “reassurance” value. 7/
IF ONLY no one needed them, we would be developing them under contracts w/ BARDA that assured a reward for success. This is exactly the kind of thinking that has some economists proposing that new antibiotic development be incentivized with promises of “subscription contracts”.
Companies would then make and sell doses of these antibodies and get paid whether they are needed or not at any given time, just as for smallpox or pandemic flu. As with insurance, better to never need it, though we remain reassured we have it. 9/
Unfortunately, this kind of “freakonomic” thinking is uncommon. So we continue to worry about millions dying in coming decades from multi-drug resistant bacteria simply because today we RARELY need these antibiotics instead of not at all. 10/
This notion of “insurance” or “reassurance” value isn’t just relevant to infectious diseases. If your partner has ever told you they felt a nodule & you worried for them, your kids, your whole family b/c cancer is scary, you know the pain of fearing a disease. 11/
Thankfully, cancer survival rates continue to improve b/c we have better screening, diagnostics, surgical procedures, & drugs. Over time, drugs go generic, becoming inexpensive yet still saving lives, freeing up room in our budget for new medicines. That’s progress! 12/
And with each step forward, each new test and drug, we are pushing back cancers such that someday we’ll live with much less fear of cancer on our minds, just as we don’t give a second thought to smallpox, just as antibiotics make an abscess less scary than would be 100y ago. 13/
Treatments we develop for all sorts of diseases are therefore not just for the benefit of those who actually needs them (as most assume) but for everyone who fears they someday might need them, too. In other words, biomedical innovation offers more peace of mind. 14/
There is reassurance value in all drugs, and that value is being overlooked in all areas of innovation EXCEPT for smallpox, anthrax, pandemic flus, and other such diseases where we aren’t distracted by anyone actually needing treatment today. Ironic, isn’t it? 15/
And when people support price controls & look to cost effectiveness formulas (eg ICER) to tell us the “correct” price to pay for a drug, they don’t realize such math doesn’t take “reassurance value” into account. Such math only values wellbeing of people actually treated. 16/
So those formulas would say that indeed new antibiotics aren’t worth it & neither are smallpox drugs nor vaccines for pandemic flus we haven’t suffered yet. These formulas COULD be amended to reveal overlooked reassurance value, making these products worth paying for...
...& some economist have made this case... but for those set on price controlling drugs, upgrading the math interferes w/ a vote-winning anti-pharma political strategy that’s easier to understand. It’s cynical, but now at least you know what’s up & what’s at stake. 17/
If you find this interesting, consider reading my book, We can solve affordability w/insurance reform (lower out of pocket!), should encourage innovation to save money & improve life, & can get value by ensuring all drugs go generic w/o undue delay. 18/18

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More from @PeterKolchinsky

4 Feb
Some people think we overpay for only incrementally better medicines. That only home runs deserve high prices. But as in baseball- most are trying as hard as they can & job is to at least get on base. Sometimes, biology allows for a home run, but it’s not the strategy.
However you reward progress, it just takes a certain level of revenues to support industry of certain size, baseball or biopharma. Not paying for singles means paying more for home runs. It means less certain employment since not every disease lends itself to big breakthroughs.
But if you offer little reward for just getting on base in, let’s say, pancreatic cancer or lupus, which are tough pitchers, then no one will bother to step up to the plates against them. Those players will only want to go up against diseases where bigger advances seem possible.
Read 25 tweets
2 Feb
Fascinated by biotech & good it can do? Interested in how industry works & innovators get funding for their ideas? RA Capital opened registration for its virtual Business of Biotech discussion Spring session. Open to students/professionals... lawmakers.…
This is part of ongoing flipped course that RA Capital hosts with lectures, slide decks, & other materials available for anyone to study online anytime... & periodically we host Zooms w/ small breakouts, case studies, & in this case an optional funding pitch competition.
Note: Lots of reading, including of, since we’ll be talking about insurance, drug pricing, & how innovators & investors would be impacted by price controls.
Read 4 tweets
28 Jan
New data from Novavax vaccine just showed that UK & esp South African variants are more problematic in real world than lab experiments suggested. Implications are profound for 2021 and beyond.…
Vaccine worked well to stop original strain (96%), like mRNA vaccines, but less effective for new strains (86% for UK strain, 60% protective against South African strain). My guess is that if mRNA vaccines were tested now in a clinical trial in South Africa...
...they would show similar reduction in effectiveness. Bottom line, new SA strain has evolved SOME (not total) resistance to current vaccines. Current vaccines still help blunt severity, so worth getting even in South Africa.
Read 19 tweets
17 Jan
This new variant is making a lot of people REALLY nervous. Here’s why it should & shouldn’t. I’ll hit on infectivity, lethality, vaccine effectiveness, & some “what ifs”. Yes, it’s more infectious. That means that w/ comparable carelessness... 1/17 variant will infect more people. Once a person is infected... new variant is not more lethal (though like original strain, it’s bad enough). While not more lethal at level of individual person once they are infected, it’s more lethal at societal level b/c more infectious.
Lethality aside for a moment, not enough attention has been given to what this virus does short of killing. For example, it can rob you of sense of smell, which means taste, for weeks or months. Sound mild until you experience it- it’s a pretty miserable condition. 3/17
Read 18 tweets
24 Dec 20
Does being vaccinated mean you don’t have to wear a mask? Answer: no, mask up, please. B/c vaccine protects you from getting sick if you are exposed to virus, but it doesn’t reliably stop virus from hitching a ride in your nose & jumping to someone else. 1/6
We know the vaccines don’t entirely stop people from getting sick if exposed. They reduce risk by 95% (20-fold). But as people start mingling much more after vaccination, they increase their odds of exposure. 2/6
So think of it this way. Social distancing and masks reduce your risk of being exposed to the virus. And a vaccine reduces your risk of getting sick if you are exposed. But if you stop social distancing, you are way more likely to get exposed. 3/6
Read 6 tweets
25 Oct 20
What would you change US stock market hours to if you could & why? (long on thoughtfulness please, funny is an option, keep puns short)
Here’s another thought. How about introducing newly public companies to market by starting with short trading hours, 3 days a week & then opening up to standard hours after 1-2 years?
What would be ideal public exchange hours from the standpoint of emerging biotech companies (consider their needs) and the funds that provide most of their backing?
Read 5 tweets

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