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Introducing the Pasteur Act for AMR

  WARNING – This is long!  Today, I discuss the Pasteur Act, a new bill proposed in the US Senate by senators Bennet and Young, with…




WARNING - This is long!


Today, I discuss the Pasteur Act, a new bill proposed in the US Senate by senators Bennet and Young, with Ryan Cirz. You can find a summary of the bill hereand the full bill (as it stands) here. The Pasteur Act proposes a subscription plan not dissimilar to what is being implemented in the UK and Sweden.  The plan will purchase a specified number of doses (or the rights to such) at some price over a multi-year period.  The total commitment proposed over up to 10 years is not less than $750 million and not more than $3 billion! The proposal only covers federally funded programs such as Medicare, Medicaid, VA, etc. There is a statement that encourages HHS to encourage participation by private payers . . .The bill is planned to assure sponsors that they will have guaranteed income in the absence of marketing – a delinkage between sales volume and revenues. But, will it actually work that way?


Ryan Cirz:  We have a math problem in the field.  Revenues are limited by price x volume.  Durations of therapy are generally short, so volume is ~ number of patients.  Either price or number of patients must go up for products to be sustainable in the marketplace.


Enabling higher pricing is the focus of the DISARM act (an Act I believe is needed to make the PASTEUR act function properly and drive optimum behavior).  The low number of patients can be solved two ways:  just wait until there are more patients, or artificially bolster the economics by ‘buying’ access to more drug than you need at that moment in time – the latter is what I perceive PASTEUR as attempting to do. 


I’m sure some readers are thinking ‘if there aren’t that many patients, maybe there’s no need and we shouldn’t spend taxpayer money on this!’ – hey, maybe that’s correct.  I will say 37 years ago we decided <200,000 patients/year didn’t make a market, but we didn’t want to leave those patients without treatments – hence the Orphan Drug Act.  Here we are talking about a current market size where there are only 10,000 or 50,000 patients – and antibiotics cure people fast (unlike most orphan drugs) – so it’s no wonder the market is breaking.


If you are in the camp that you’d rather just wait until there are sufficient patients for the market to solve itself, it’s important to remember the vast majority of patients’ experience with an antibiotic is during its much longer lifespan as an inexpensive generic.  If you want those generics to exist in the future, there must be a way to reward the innovator companies (more importantly, their investors) during the short, branded years after launch – then 10-15 years later, when the market is big, society gets cheap access ad libitum.


There are other examples of this in the US.  One is the State of Louisiana’s subscriptionfor HCV therapeutics for their Medicaid population. In that case, Louisiana guarantees a purchase of a specific number of doses of these drugs at a negotiated price (lower than the usual retail price). The company is guaranteed revenues upfront. The State saves money over the number of patients treated and – therefore – can treat more patients.  This is a win-win for taxpayers, patients and Louisiana.


1.     The subscription is for government payers only.  While this is a large number of very key payers (VA, Medicare, Medicaid etc), it does not include private insurers. The bill encourages HHS to encourage private payers to participate, but how will this work exactly in your opinion?

Full disclosure:  I have no idea how this will work – related though - I prefer a system with a de-linked incentive and a natural competitive market. My fear is, without some sort of competitive market, there will be regression to minimum standards to be eligible for a subscription contract.  There are infinite parameters that can be dialed when designing and developing a drug and without market forces, the pressure to strive for the very best you can achieve will be absent.  So I’m open-minded as we start to really experiment and get specific with these pieces of legislation but hoping we have a stabilized base of revenue from a PASTEUR-type system and perhaps leave the private payer market separate so there’s reason to compete to make the very best product – even within the subscription tiers – TBD as things unfold


2.     If I am a hospital pharmacist, when I order an antibiotic covered by Pasteur, will I need to pay the upfront price to stock the drug before being reimbursed by a payer one patient at a time?  I don’t know the answer to this and neither does Ryan (apparently). But I suspect that hospitals will have to pay upfront to stock the new drug.


3.    If I am a sponsor, will I need to work to get my product on the formulary (assuming I have to pay to stock the drug)? How much will this interfere with the presumed delinkage of the model?

 This is a great question because it costs a lot of money to support formulary review.  Pharmacists often depend on the sponsor to generate additional data beyond what’s in the approval package – sometimes even assembling the information for the hospitals.

DS here – In my view, Pasteur will have to have a contractual mechanism obligating sponsors to support formulary decisions in hospitals.

4.     If I am HHS, how will I determine how many doses to order and how do you see price negotiations progressing?

This is an open question I have – and where I could see things breaking down if there isn’t a normal competitive market to supplement the subscription.  The only super clear number to me is there will be an annual payment and the totals for all payments will range from $750M - $3B.  Also, revenues from federally insured will be subtracted, but at what unit price?  The only information is a price floor, which I assume is there to avoid enticing use over expensive generics like carbapenems. 

If there is a set number of doses that must be available, that imputes a price per course.  If the number of doses that must be available is determined based on disease prevalence, then could that entice people to go for the rarest condition as long as it qualifies for the highest reward? – why? - if I only have to supply super small numbers – I don’t have to worry about cost of goods, re-stocking, or frequent pharmacovigilance reporting…

It would be important to see just a bit more detail on the proposed mechanics here.  For a number of scenarios I can picture, having some component of a normal competitive market may help counteract some behaviors I could see going awry in a subscription-only incentive world.

6.  If I am a sponsor, how will this effect my development, post-approval development and marketing plans?

If PASTEUR passed tomorrow, for me at least - I’d say no change right away to the pipeline focus.  It will take quite a bit of time to spin up the committees and see how the different tiers are defined.  There’s even some funding to bridge that initial period – Pandemic stockpile purchases and contracts that could provide post-market development support.

 We need to see how this committee values different attributes – of course we can all predict the types of things that would drive value of an award.  HABP/VABP label > cUTI/cIAI; including non-fermenters is a higher value tier. (From DS – an oral cUTI drug active against high priority pathogens would also be1st tier I would think). But nuances around narrow vs. broad spectrum (do I just need 1 non-fermenter or many?), what discounts apply to the almost infinite spectrum of safety considerations, and my fear novel mode of action, and not novel spectrum of activity will be the definition of novel could swing the incentive structure quite dramatically.

 So I’d do what I’ve always done – keep a diverse pipeline of assets at different stages of maturity so you can pivot as the rules change.  Perhaps some pipeline programs that clearly have no hope in the current reimbursement environment (say a narrow-spectrum inpatient only program) you might push a little further along at risk if legislation passes – but otherwise no immediate change until we see how value is defined.

 Post-approval plans – it seems obvious that one of the goals of PASTEUR would be to provide some incentive for label expansion.  While it’s not explicitly stated, there is language around ‘upgrading’ your subscription tier at a later date.  So for example if I come up with a drug active against CRE/CRAB/CRPA and initially develop it in cUTI, say that gets me the middle tier – but if I get a HABP/VABP indication later, I get the higher tier.  I do like that it creates incentives to keep studying the drug post approval – I know physicians want this.  It will be interesting to see if that could incentivize any adverse behaviors – for example delays to market:  HABP/VABP labels typically come several years after initial approval – so is it better to delay approval 5 years for 5 more years of top tier payments or get my 5 years of cUTI payments and then take 5 of the top tier?

 Again in the immediate term, it looks like there will be PBS-style contracts to bridge those companies that are nearing approval now – so I’d focus on making sure I’m in position for those as the idea is they’d cover the post-approval costs and purchase some drug to bolster initial revenues while we sort the rest of this out!


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Royal Caribbean Shares Huge News on Covid Testing, Vaccine Rules

President Michael Bayley gave some straight answers on pre-cruise covid testing and potentially dropping vaccine requirement at a Q&amp;A during the cruise…



President Michael Bayley gave some straight answers on pre-cruise covid testing and potentially dropping vaccine requirement at a Q&A during the cruise line's President's Cruise.

Being on a cruise has largely returned to the same experience it was before the pandemic. Mask requirements have been dropped, capacities have returned to normal, and social distancing requirements have been dropped.

In fact, aside from crew members still having to wear masks and some stray passengers opting to do so in certain indoor situations, there's really no sign of covid rules once you board your cruise.

Before you board, however, the pandemic still has an effect on cruising. Every passenger 12 and older must be vaccinated (and must prove so before getting on board) and all passengers must produce a negative covid test taken no more than two days before getting on the ship.

And, while covid remains a problem, the cruise industry sees some light at the end of the tunnel when it comes to pre-cruise protocols. Executives from the major cruise lines -- Royal Caribbean International (RCL) - Get Royal Caribbean Group Report, Carnival Cruise Lines (CCL) - Get Carnival Corporation Report, and Norwegian Cruise Line (NCLH) - Get Norwegian Cruise Line Holdings Ltd. Report -- have said very little about plans to drop pre-cruise testing and vaccination requirements,

Now, however, Royal Caribbean President Michael Bayley has spoken out on both issues and has given cruise fans some real answers.


When Will Covid Tests and Vaccinations Get Dropped?

The major cruise lines have largely stayed quiet about covid protocols because they remain somewhat beholden to the Centers for Disease Control (CDC). The current CDC rules are voluntary, but voluntary is sort of a relative term when it comes to the power the federal agency has over the cruise industry.

It makes sense that the industry has been cautious in commenting on when covid protocols may change, but with the end at least seeming feasible Bayley answered questions about both the end of pre-cruise testing and potentially dropping vaccination requirements during the 2022 Royal Caribbean President's Cruise on Ovation of the Seas, the Royal Caribbean Blog reported.

"I think pre-cruise testing is going to be around for another couple of months," Bayley said. "We obviously want it to go back to normal, but we're incredibly cognizant of our responsibilities to keep our crew, the communities and our guests safe."

Bayley was less hopeful about the end of vaccinations, according to the blog, which has no connection to Royal Caribbean.

"The no vaccine question is is a huge question that none of us know the answer to," he said. "I'm skeptical that's going to change in the in the real short term. Many and most of the destinations that we visit require a high degree of vaccination, and they expect our crew to be vaccinated."

Cruise Lines Covid Protocols Are Working

Covid has not gone anywhere, but the cruise industry has been very successful at controlling the impact of the virus. Bayley noted that the CDC shares some information with him about the "millions" of people who have sailed from U.S. ports over the past 12 months.

"And the number of people who died from COVID who'd sailed on ships over the past year was two," the Royal Caribbean Blog reported. "Two is terrible. But against the context of everything we've seen, that's it's truly been a remarkable success."

Vaccine requirements remain a touchy issue as some people have chosen not to be vaccinated and that means they cannot cruise. That seems unlikely to change anytime soon given the destinations Royal Caribbean visits and the CDC information which shows that the current protocols are working.

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Trial of potential universal flu vaccine opens at NIH Clinical Center

A Phase 1 clinical trial of a novel influenza vaccine has begun inoculating healthy adult volunteers at the National Institutes of Health Clinical Center…



A Phase 1 clinical trial of a novel influenza vaccine has begun inoculating healthy adult volunteers at the National Institutes of Health Clinical Center in Bethesda, Maryland. The placebo-controlled trial will test the safety of a candidate vaccine, BPL-1357, and its ability to prompt immune responses. The vaccine candidate was developed by researchers at the National Institute of Allergy and Infectious Diseases (NIAID). The single-site trial can enroll up to 100 people aged 18 to 55 years and is led by NIAID investigator Matthew J. Memoli, M.D.

Credit: NIAID

A Phase 1 clinical trial of a novel influenza vaccine has begun inoculating healthy adult volunteers at the National Institutes of Health Clinical Center in Bethesda, Maryland. The placebo-controlled trial will test the safety of a candidate vaccine, BPL-1357, and its ability to prompt immune responses. The vaccine candidate was developed by researchers at the National Institute of Allergy and Infectious Diseases (NIAID). The single-site trial can enroll up to 100 people aged 18 to 55 years and is led by NIAID investigator Matthew J. Memoli, M.D.

“Influenza vaccines that can provide long-lasting protection against a wide range of seasonal influenza viruses as well as those with pandemic potential would be invaluable public health tools,” said NIAID Director Anthony S. Fauci, M.D. “The scientific community is making progress on this pressing global health priority. The BPL-1357 candidate influenza vaccine being tested in this clinical trial performed very well in pre-clinical studies and we look forward to learning how it performs in people.” 

BPL-1357 is a whole-virus vaccine made up of four strains of non-infectious, chemically inactivated, low-pathogenicity avian flu virus. A study in animals, led by NIAID investigator Jeffery K. Taubenberger, M.D., Ph.D., and posted online as a pre-print, found that all mice receiving two doses of BPL-1357 vaccine delivered either intramuscularly or intranasally survived later exposure to lethal doses of each of six different influenza virus strains, including subtypes that were not included in the vaccine. Similar results were obtained in challenge experiments with BPL-1357-vaccinated ferrets. 

In the Phase 1 trial, volunteers will be randomized in a 1:1:1 ratio into three groups and will receive two doses of placebo or vaccine spaced 28 days apart. Group A participants receive BPL-1357 intramuscularly along with intranasal saline placebo; Group B will receive doses of the candidate vaccine intranasally along with intramuscular placebo; volunteers in Group C receive intramuscularly and intranasally delivered placebo at both visits to the clinic. Neither the study clinicians nor the volunteers know the group assignments. Volunteers must not have received any type of flu vaccination in the eight weeks prior to enrollment and must agree to forego seasonal flu vaccination for approximately two months after the second vaccine (or placebo) dose. 

The study duration for each participant is approximately seven months. In addition to the two clinic visits to receive vaccine (or placebo), volunteers will be asked to return to the clinic seven times to provide blood and nasal mucosal samples that will be used by the investigators to detect and characterize immune responses. 

“With the BPL-1357 vaccine, especially when given intranasally, we are attempting to induce a comprehensive immune response that closely mimics immunity gained following a natural influenza infection,” said Dr. Memoli. “This is very different than nearly all other vaccines for influenza or other respiratory viruses, which focus on inducing immunity to a single viral antigen and often do not induce mucosal immunity.” 

“Our study will examine the safety of BPL-1357 and also will allow us to assess the importance of mucosal immunity against flu and whether a strategy of inducing both the cellular and antibody arms of the immune system can provide broader protection against the ever-changing influenza virus,” he added. 

For additional information about the trial, visit and search on the trial identifier NCT05027932. 

NIAID conducts and supports research—at NIH, throughout the United States, and worldwide—to study the causes of infectious and immune-mediated diseases, and to develop better means of preventing, diagnosing and treating these illnesses. News releases, fact sheets and other NIAID-related materials are available on the NIAID website. 

About the National Institutes of Health (NIH): NIH, the nation’s medical research agency, includes 27 Institutes and Centers and is a component of the U.S. Department of Health and Human Services. NIH is the primary federal agency conducting and supporting basic, clinical, and translational medical research, and is investigating the causes, treatments, and cures for both common and rare diseases. For more information about NIH and its programs, visit 

NIH…Turning Discovery Into Health®

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China Stocks Outperform On Unexpected COVID Shift

China Stocks Outperform On Unexpected COVID Shift

Update (0920ET): China’s move to ease quarantine rules for inbound travelers from three…



China Stocks Outperform On Unexpected COVID Shift

Update (0920ET): China's move to ease quarantine rules for inbound travelers from three weeks to just one week has bolstered sentiment for Chinese equities. 

Bullish calls are rising on Chinese stocks as the CSI 300 Index inches near a bull market. 

Fred Hu, the founder of China-based investment firm Primavera Capital Group, told Bloomberg that he believes Chinese tech firms have turned the corner after a $2 trillion rout sparked by Beijing's yearslong technology crackdown. 

NASDAQ Golden Dragon China Index plunged more than 76% since its peak in early 2021, coinciding with Beijing's crackdown start. The index hit a low in March and has since bounced 67% -- because the crackdown fears show signs of softening. 

Hu believes "this could be the beginning of a new era for China tech ... There's a lot of value to be discovered," adding that investors still need to be selective in picking stocks. 

Adding to support is the People's Bank of China's accommodative monetary policy, which is the opposite of global central banks that aggressively tighten interest rates to prevent the surge in inflation from turning into dreaded 1970s-style stagflation. Today's quarantine reduction news, tech crackdown abating, and PBOC easing have produced a more optimistic outlook for Chinese stocks. 

However, a lingering threat of a US slowdown could be problematic for all investors. 

Lorraine Tan, director of equity research at Morningstar, told Bloomberg TV: "Even if we do get some China recovery in 2023, which could be a buffer for this region, it's not going to offset the US or global recession."

* * *

China unexpectedly slashed quarantine times for international travelers, to just one week, which suggests Beijing is easing COVID zero policies. The nationwide relaxation of pandemic restrictions led investors to buy Chinese stocks.

Inbound travelers will only quarantine for ten days, down from three weeks, which shows local authorities are easing draconian curbs on travel and economic activity as they worry about slumping economic growth sparked by restrictive COVID zero policies earlier this year that locked down Beijing and Shanghai for months (Shanghai finally lifted its lockdown measures on May 31). 

"This relaxation sends the signal that the economy comes first ... It is a sign of importance of the economy at this point," Li Changmin, Managing Director at Snowball Wealth in Guangzhou, told Bloomberg

At the peak of the COVID outbreak, many residents in China's largest city, Shanghai, were quarantined in their homes for two months, while international travelers were under "hard quarantines" for three weeks. The strict curbs appear to have suppressed the outbreak, but the tradeoff came at the cost of faltering economic growth. 

The announcement of the shorter quarantine period suggests a potentially more optimistic outlook for the Chinese economy. Bullish price action lifted CSI 300 Index by 1%, led by tourism-related stocks (LVMH shares rose as much as 2.5%, Richemont +3.1%, Kering +3%, Moncler +3%). 

"The reduction of travel restrictions will be positive for the luxury sector, and may boost consumer sentiment and confidence following months of lockdowns in China's biggest cities," Barclays analysts Carole Madjo wrote in a note. 

CSI 300 is up 19% from April's low, nearing bull market territory. 

Jane Foley, a strategist at Rabobank in London, commented that "this news suggests that perhaps the authorities will not be as stringent with Covid controls as has been expected." 

"The news also coincides with reports that the PBOC is pledging to keep monetary policy supportive," Foley pointed out, referring to Governor Yi Gang's latest comment. 

She said, "this suggests a potentially more optimistic outlook for the Chinese economy, which is good news generally for commodity exporters such as Australia and all of China's trading partners." 

Even though the move is the right step in the right direction, Joerg Wuttke, head of the European Chamber of Commerce in China, said, "the country cannot open its borders completely due to relatively low vaccination rates ... This, in conjunction with a slow introduction of mRNA vaccines, means that China may have to maintain a restricted immigration policy beyond the summer of 2023." 

Alvin Tan, head of Asia currency strategy in Singapore for RBC Markets, also said shortening quarantine time for inbound visitors shouldn't be a gamechanger, and "there's nothing to say that it won't be raised tomorrow." 

Tyler Durden Tue, 06/28/2022 - 09:20

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