Big Pharma Exit: Who's Fighting the Superbugs?

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A looming shortage of antibiotic drugs threatens to derail efforts to fight the so called superbugs, according to a new report.

The Infectious Diseases Society of America, (IDSA) released a study last week stating that with just four of the big pharma firms researching any kind of antibiotics and so few new drugs being developed, the dangers posed by normal bacteria and the superbugs resistant to medicines contribute to a major health hazard to the public.

"This is a crisis. If nothing gets done, we could be facing life before antibiotics," said Dr. Helen Boucher, an IDSA board member and an infectious disease specialist at Tufts Medical Center.

"We could have people going in for simple surgery like having their appendix out and dying because there aren't enough antibiotics," Boucher said. " We aren't used to seeing those things in this country, but the possibility is real."

Since 1998, only four antibiotics have been approved by the Federal Drug Administration for use by doctors, according to the ISDA. The last approval came in 2010. Only seven antibiotics are currently in any kind of advanced stage of development and are years away from approval and use.

At one time, 11 big pharmaceutical companies were involved in antibiotic research and development. But the ISDA report says that figure is down to four: GlaxoSmithKline, Pfizer, AstraZeneca and Merck.

"Big pharma has downsized so much. It's reflective of the fewer businesses opportunities they see," said Dr. Henry Chambers, an ISDA member.

"Only about 10 percent of any drugs researched and developed make it to the market place," Chambers said. "It's not a real recipe for business success as antibiotics are cheaper in sales price than many other drugs but they can cost a lot to develop."

"And there's the FDA, which hasn't always made it easy to get antibiotics approved," Chambers added. "It takes a lot of time to get them through the FDA." (Read More: Superbugs Creeping Into Food at Alarming Rate)

Bristol-Myers Squibb spent decades working on antibiotics but stopped in 2006. When asked why, the company responded in an email saying, "Our focus is not on antibiotic research."

Johnson & Johnson has gone on record saying it is no longer involved in antibiotic research and development, citing a high cost/benefit ratio and FDA rules. Even though Pfizer continues some R&D in the area, it closed its main antibiotic center in 2011. (Read More: Health Care Reform Is US's 'Biggest Challenge': J&J CEO)

So what's standing between the public and rampant antibiotic resistant bacteria? Smaller pharma firms.

"There are only a handful of companies like us out there," said Steve Gilman, chief scientific officer and executive vice president of Cubist, a bio-pharmaceutical company based in Lexington, Mass.

"We're focusing exclusively on the superbugs of today and other types of anti-resistant bacteria." Gilman said. "But we can't do it all. We need more like us." (Read More:Superbugs Are a 'Costly War We Can't Win': Doctors)

Cubist, a publicly traded company, has been in business for 20 years and works on various health care areas, including antibiotics. It employs about 750 people — with some 300 dedicated to drug R&D in antibiotic medicines, Gilman said.

"Our guidance for R&D for 2013 is between $400 and $420 million, with the bulk of that focused on antibiotics," Gilman said.

As for profits in antibiotics, Gilman said a smaller firm is more likely to find them than the bigger ones.

"Our overhead is much less than a larger firm," Gilman said about Cubist, which reported net revenue in 2012 of $926.4 million, up 23 percent from 2011.

"We've been able to find a steady stream of revenues that keeps growing. We're happy to pursue a $500 million market, where the bigger firms won't," he added. "I don't think the bigger pharmaceutical firms are going to change their mind about getting back into antibiotic research anytime soon. It's up to us (smaller firms) to get this solved."

What might help Gilman's company and similar ones solve the problem is aid from Congress. A law referred to as the Gain Act (Generating Antibiotics Incentives Now) went into effect last year. Its provisions include priority review by the FDA with increased government funding.

"This will help speed up the process for approval and slow down the brain drain from antibiotic research," said Boucher.

"But it's still a tough economic road, even for small firms. We mentioned in our report that one small firm doing antibiotic research, PolyMedix filed for bankruptcy this month, its most advanced drug only in stage two (of three) clinical trials," she said.

A study by reports that superbugs are responsible for $20 billion a year in excess U.S. health care costs, plus $35 billion in lost wages and other societal costs from the almost 8 million days that infected patients spend in the hospital.

And it's not just superbugs doing damage. Other bacteria strains cause an estimated 3.6 million cases of food poisoning each year, according to the Centers on Disease Control and Prevention. The symptoms can range from diarrhea to kidney failure, paralysis and even death. Salmonella-caused illnesses alone kill 400 people a year and cause 23,000 hospitalizations.

"We need to get the pipeline of antibiotics flowing again, and it needs to be soon," Chambers said. "This is going to get out of hand if we don't. It's the superbugs and other bacteria that we have to fight."

Gilman said his firm is taking the long view in the battle to find new drugs.

"It's not just a bottom line issue," Gilman said. "We want to provide for our shareholders, but we want to do something for the public as well. This is a very serious problem and it's important for us to go home at night knowing we've done something for the world. That's how we look at this."