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U.S. Department of Health and Human Services


Novel Partnerships, Payment Shifts, and Emerging U.S. Leadership for Antimicrobial Drugs

Author: Rick A. Bright, Ph.D., BARDA Director
Published Date: 8/5/2019 9:01:00 AM
Category: Medical Countermeasures; Public Health Preparedness;

Antimicrobial resistance (AMR) is an increasingly serious threat to America’s public health and national security. The resources necessary to discover, develop and commercialize innovative, life-saving antimicrobials are similar to other disease areas; however, the relative return on investment is exceedingly low.

In May, I highlighted the need for an immediate paradigm shift in the antimicrobials marketplace. I specifically called out the importance of building new business models, developing novel partnerships, focusing on market strengthening strategies, and ensuring BARDA’s leadership in this effort. One such novel and exciting partnership for BARDA is that with the Centers for Medicare & Medicaid Services (CMS).

Without payment reform, the antimicrobials marketplace will not survive. CMS Administrator Seema Verma understands this reality and the necessity for a strong marketplace for both public health and national security purposes. On Friday, August 2, CMS issued its fiscal year (FY) 2020 Hospital Inpatient Prospective Payment System (IPPS) Final Rule. Among other changes to the way CMS pays for Medicare services, CMS recognized the need for greater payment of newer, potentially safer and more effective antimicrobial drugs.

The new rule will (1) change the severity level designation for multiple ICD-10 codes for antimicrobial drug resistance from ‘non-CC’ to ‘CC’ (which stands for complications or comorbidities) to increase payments to hospitals due to the added clinical complexity of treating patients with drug-resistant infections, (2) create an alternative pathway for the new technology add-on payment (NTAP) for qualified infectious disease products (QIDPs), under which these drugs would not have to meet the substantial clinical improvement criterion, and (3) increase the NTAP for QIDPs from 50 percent to 75 percent.

This final rule lessens economic incentives to utilize older antimicrobial drugs such as colistin, and shift medical practice to employ more appropriate, newer generation antimicrobials. Payment more closely aligned with the value of these lifesaving medicines will shift the current market realities of these drugs for companies, investors, and patients.

No single action will solve the antimicrobial resistance problem; however CMS’ efforts undoubtedly can improve the marketplace and re-catalyze innovation in basic science discovery, and research and development efforts. We appreciate and congratulate Administrator Verma for taking such bold leadership in this fight. 

At BARDA, we will continue to lead efforts in the fight against antimicrobial resistance by building new relationships, new partnerships and new models. In partnership with HHS divisions, BARDA is seeking to re-catalyze investment into antimicrobial companies by supporting reimbursement reforms and creating market strengthening initiatives that increase forecasted peak sales of these antimicrobial drugs to a level where companies can become self-sustaining.

BARDA is exploring a four-pronged strategy which requires collaboration and action across HHS and potentially includes: (1) building upon these CMS reimbursement reforms, (2) commercial marketplace strengthening, (3) securing US-based infrastructure of medical countermeasure development, and (4) developing a clinical trial network to conduct the most challenging and medically important clinical studies for serious life-threatening infections.

We are proud to have collaborated with CMS on this effort, and we look forward to working with our partners – new and old – to save lives from antimicrobial resistant threats.


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