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Antibiotics Aren’t Profitable Enough for Big Pharma to Make More

Public health experts are calling for new incentives to reward companies for bringing drugs that are effective against resistant strains to market.

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Illustration: Amina Bouajila for Bloomberg Businessweek

Achaogen Inc. spent 15 years racing to develop antibiotics against resistant superbugs. It targeted one of the most-feared superbugs lurking in intensive care units: carbapenem-resistant Enterobacteriaceae, or CRE, a strain that can kill up to half the people it attacks. Last June its first drug, Zemdri, which kills CRE bacteria in the test tube, was approved by U.S. regulators. From a public health perspective, Achaogen is a success. But as a business, it’s a failure. Zemdri’s sales in its first six months on the market were less than $1 million. Achaogen filed for bankruptcy in April.

The failure has set off alarm bells among infectious disease doctors and public health experts. Big drug companies have been exiting antibiotic research for years, prompting the U.S. government and medical charities to step in with research funding. Now health experts are realizing that research funding doesn’t matter if there’s no market for the drugs when they get approved. “We have a broken antibiotic market, and this is a stunning example of how broken it is,” says Helen Boucher, a doctor at Tufts Medical Center and treasurer of the Infectious Diseases Society of America. The IDSA is “very worried” that other biotechs with promising new antibiotics are going to collapse if something isn’t done, she says.