Perspectives

Health Care Current: June 2, 2015

The five unanswered questions surrounding biosimilars

This weekly series explores breaking news and developments in the US health care industry, examines key issues facing life sciences and health care companies and provides updates and insights on policy, regulatory and legislative changes.

The five unanswered questions surrounding biosimilars

After James Wilson Marshall discovered a certain shiny metal in the America River in California, he later recalled that his discovery “made my heart thump, for I was certain it was gold.” It was 1848, the year before the gold rush began. By the end of 1849, California’s population had grown to 100,000, nearly 80,000 more than the end of the prior year.1 It was all for gold.

The biologics market has grown exponentially over the last several years. These products represented more than $150 billion in global sales in 2013 and are projected to generate $290 billion and make up 27 percent of the pharmaceutical market by 2020.2 This, along with the increasing worldwide focus on improving health care access and costs, presents an attractive opportunity for biosimilar – or follow-on biologic – manufacturers. Analysts expect the worldwide biosimilars market to reach $25 to $35 billion by 2020. Since the first biosimilar approval in EU in 2006, there are now more than 700 biosimilars approved or in the pipeline globally.3

But do industry players currently view it as a possible gold rush, or a misguided hunt for fool’s gold? While it may not be as easy to mine as gold was in California back in the mid-19th century, there’s little question in my mind that the biosimilars market could be a prospective gold mine for major pharma companies, generics manufacturers and even smaller drug producers. There could be potential for this market to make an enormous impact in the development, manufacturing and marketing of complex medicines for years to come.

However, health care and life sciences organizations must tackle a series of critical assessments before determining how quickly they rush to the scene. While many believe that biosimilars hold exciting promise for drug manufacturers, their leaders should consider the answers to five key questions before they proceed and expect to achieve that promise.

Can the business afford it? Certainly the largest pharma companies may be best positioned by virtue of the fact they have higher revenue, greater resources, existing manufacturing capacity and broader research and development capabilities to facilitate including biosimilars as a core part of their business model and organizational strategy. This may yield a competitive advantage for branded drug manufacturers that have enough capital and the ability to build to scale. It may also prove to be an opportunity for a number of smaller manufacturers that have the ability to scale up sufficiently to become profitable. But there may be a number of companies that simply won’t have the financial wherewithal to compete.

What are the state and federal legislative mandates that may determine the growth and expansion of this new sector? Predicting future regulatory pressures is a tough business. Biosimilars are, after all, not an exact match. They involve living tissue, not small molecule generics that can be easily applied. Interchangeability is a key consideration. In more than a dozen states, products cannot be switched unless they are classified as interchangeable. That means additional clinical trials and higher expenses. For companies working to launch new products, the process can be slowed, if not made prohibitive altogether.

What is the organizational appetite for investment? At a time of industry change and contraction driven by evolving marketplace demands, will biopharma companies be as aggressive in devoting financial resources to an emerging segment of the market that requires substantial investment and carries additional risks? The approach may differ by organization: generic manufacturers may need to acquire capabilities, while biologic innovators may have to overlay this new business onto their current portfolio.

What kind of pricing structure needs to be put in place? How do organizations create enough margin to maintain a pricing model that will make the investment worthwhile? While branded pharma companies might view this as a challenge, it’s not an insurmountable one. However, many smaller companies facing smaller margins – even those that have demonstrated success with generics – may find this demanding and dynamic new market more difficult.

Will we experience the level of consumer discounts long associated with the growth of generic drugs? The short answer is probably not. Generic products have generated remarkable savings for consumers over the years. But generics and biosimilars are not an apples-to-apples comparison. Consumers have become used to generic cost reductions in the neighborhood of 80-90 percent.4 Given the complexities of manufacturing and regulatory hurdles for biosimilars, the cost savings for consumers using biosimilars will probably fall in the 30-percent range, at least in the short term.5 Will consumers opt for a biosimilar treatment if it is not significantly cheaper than the reference product?

Once all of these questions have been addressed, one overarching question still remains: Is the risk worth it? By 1850, merely two years after the beginning of the gold rush, most of the surface gold in California had disappeared. Miners continued to flock to the area, but they faced difficult and dangerous conditions.

Making the strategic decision to compete in the biosimilars market is riskier than generics. But it could have enormous upside. For industry players, sitting on the sidelines may not be wise. Organizations can use scenario planning to determine what products may succeed in the marketplace, what products may not and how best to invest strategically.

For those determined to push ahead after weighing these five critical questions, they could end up capturing a significant share of the estimated tens, even hundreds, of billions in biosimilar-generated revenue over the next decade. That could be the gold that makes it worthwhile for companies to invest.

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Sources:

1 http://www.history.com/topics/gold-rush-of-1849
2 IMS Health, 2013
3 BioWorld, 2014
4 https://www.pharmacychecker.com/news/us_generics_more_expensive_than_foreign_brands.asp
5 http://www.rand.org/content/dam/rand/pubs/perspectives/PE100/PE127/RAND_PE127.pdf

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My Take

By Homi Kapadia, Vice Chairman, US Life Sciences Leader, Deloitte LLP

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What are the various scenarios to look for in the US Supreme Court decision?

As Anne Phelps, Principal, US Health Care Regulatory Leader, Deloitte & Touche LLP, explained in a recent Reg Pulse Blog post, the Supreme Court is expected to issue a ruling this month in King v. Burwell, a case that challenges an important coverage provision of the Affordable Care Act (ACA). The major issue the US Supreme Court will determine is whether it was an allowable interpretation of the ACA for the Internal Revenue Service to make federal tax credits available to individuals who purchase coverage through the federally-facilitated Exchanges.

The Supreme Court will be evaluating the case based on a reading of the statute and an examination of the Obama Administration’s regulatory interpretation of the statute. What are the various scenarios to look for in the Supreme Court decision? While it is difficult to predict what the Supreme Court will decide in any given case, we can look to the questions raised before the Court and think through various decision scenarios to help prepare for the outcome. Phelps outlines four possible scenarios when the decision is handed down next month.

For more, see the May 27, 2015 Reg Pulse Blog post, “What to look for in the Supreme Court decision in King v. Burwell.

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Implementation & Adoption

CMS intends to update Medicaid managed care regulations through proposed rule

Last week, the US Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that would update Medicaid managed care regulations for the first time since 2002. The rule is broad in scope, and health plans have been monitoring its release after the Office of Management and Budget began reviewing the rule in March.

The proposed rule would update regulations that govern Medicaid managed long-term care services. CMS would revise the regulations to make sure that all Medicaid managed long-term care plans operate in accordance with the 10 key principles that CMS defined as necessary for a strong long-term care program. These principles include adequate planning, stakeholder engagement, enhanced provision of home and community-based services, qualified providers, quality and more. The rule would also allow beneficiaries in Medicaid Long-Term Services and Supports to switch to a different plan or into traditional Medicaid fee-for-service if they discover their provider is not in their managed care plan network.

Other significant provisions in the proposed rule include:

Analysis: Medicaid is the largest payer of long-term care services in the US. The Congressional Budget Office (CBO) predicted that spending on long-term care will grow by 60 percent by 2023. In 2012, approximately 389,000 Medicaid beneficiaries received managed long-term care services. In 2004, only eight states had managed long-term care services and supports programs. By 2014, 12 more states had implemented such a program. A recent Kaiser Family Foundation report highlighted a large concern among many stakeholders about the quality of care in many long-term care facilities. Kaiser’s survey of nursing facilities certified by Medicare or Medicaid found that 39 percent have one- or two-star ratings on the five-star quality rating system. However, the survey also found that 45 percent of the facilities have star ratings of four and five stars. As states continue to move Medicaid beneficiaries into managed care programs, CMS will likely continue to monitor and emphasize quality of care.

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Hospital readmission penalties spread more evenly across types of hospitals

After three years of the Hospital Readmissions Reduction Program (HRRP), penalties are less concentrated in teaching and other safety-net hospitals, according to an analysis performed by Ashish Jha at the Harvard School of Public Health. Jha was interested in what types of hospitals sustain penalties under the HRRP and the effect on the program of adding penalties for readmissions related to surgical conditions in the third program year.

Jha’s analysis indicates that about 80 percent of hospitals eligible for the program (hospitals with high readmission rates for specified conditions) sustained a penalty during fiscal year 2015. More than half of hospitals (57 percent) were penalized all three years of the program. Jha found that in year three, the gap in penalties between teaching hospitals and other types of hospitals narrowed. Jha attributed this shift to penalties including surgical readmissions. Readmissions related to surgery are usually due to complications, which can be mitigated by more successful surgeries and higher quality post-operative care. Jha also found that while safety-net hospitals still receive higher penalties than other hospitals in the program – which may be due to the fact that they treat more low-income patients – the gap is narrowing.

Background: The HRRP, which was established by the ACA, aims to reduce hospital readmission rates by penalizing hospitals with higher than anticipated readmission rates. Jha analyzed HRRP program data provided by CMS. The data include information regarding the size, populations served, location and safety-net status of hospitals.

(Source: Jha, Ashish, An Ounce of Evidence, “Readmissions Penalty at Year 3: How Are We Doing?” May 14, 2015)

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CMS releases solicitation notice for Provider Compliance Reporting System

In early May, CMS released a solicitation notice seeking a contractor to develop and maintain a Provider Compliance Reporting System (PCRS). The primary function of the PCRS will be to allow CMS to review providers’ Medicare claims to identify fraud. Having a comprehensive view of Medicare activity among providers could help CMS better prevent and protect Medicare against fraud.

According to Modern Healthcare, Medicare fraud costs the US government up to $90 billion per year. To better coordinate the reviews that contractors such as Medicare Administrative Contractors, Recovery Audit Contractors, Zone Program Integrity Contractors and more perform on providers, the site will indicate when providers received education and what claims are under review.

The site is expected to allow providers to find information on themselves. Right now, providers have to visit three different websites to get information from three different contractors. Ideally, the new site will provide information about Medicare reviews and education activity in one place.

Analysis: Together with the US Department of Health and Human Services (HHS) Office of Inspector General (OIG), state Medicaid agencies and the Medicaid Fraud Control Units, the Federal Trade Commission and Department of Justice, CMS uses various programs to control fraudulent spending in the Medicare program. As CMS and other federal agencies continue to enhance their capacity to control fraud and abuse in federal health care programs, the pressure will likely continue to grow on individual companies and organizations within health care to anticipate and prepare for these types of reviews. Organizations can apply analytics and other tools to their data and programs to comply with program requirements and help prevent fraud from becoming an issue.

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Study finds marked progress in personalized medicine, but challenges remain

Last month, the Tufts Center for the Study of Drug Development released the findings of a survey of biopharmaceutical stakeholders about the progress and challenges of personalized medicine. Researchers surveyed 15 personalized medicine manufacturers and 22 drug and diagnostics companies involved in developing personalized medicines. Interviewees reported significant progress. However, challenges also remain. Highlights of the report include:

Related: Personalized medicine, also commonly referred to as precision medicine, has gained momentum. Earlier this year, President Obama announced the Precision Medicine Initiative in his State of the Union address. A proposal of $215 million was included in the President’s fiscal year 2016 budget to finance the launch of the initiative, which supports drug research and treatment options around personalized medicine. Just last month, the Senate Committee on Health, Education, Labor, and Pensions held a hearing on Precision Medicine to better understand the role interoperability and cyber-security will play in the new program (see the May 12, 2015 Health Care Current).

(Source: Milne, Christopher-Paul, Cohen, Joshua P., Tufts Center for the Study of Drug Development, “Personalized medicine gains traction but still faces multiple challenges,” May/June 2015)

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House Energy and Commerce committee proposes $13.2 billion in offsets for 21st Century Cures

Earlier this month, the House Energy and Commerce (E&C) Committee unanimously passed the 21st Century Cures legislation. From there, it heads to the House Ways and Means Committee, as that committee has jurisdiction over some of the provisions in the bill. The bill’s progress has been an iterative one as lawmakers have been changing some of the provisions and finding ways to pay for the cost of implementing many of the new policies. The last round of changes to the bill made revisions that:

  • Include $13.2 billion in offsets: The bill includes provisions that would sell off some of the Strategic Petroleum Reserve ($5.2 billion), implement an HHS OIG recommendation to delay prepayments for certain Medicare Part D plans ($5-$7 billion), limit Medicaid payments to states for durable medical equipment to Medicare rates ($2.8 billion) and create an incentive to transition X-ray imaging to digital radiology ($200 million).
  • Seek to appropriate $550 million for a Cures Innovation Fund: The bill would fund $110 million per year from 2016 through 2020. This funding would go to the US Food and Drug Administration (FDA) and National Institutes of Health (NIH).
  • Protect FDA user fees from being sequestered: The bill would exempt FDA user fees from being sequestered. In 2013, sequestration took approximately $85 million in user fees from the FDA. They are currently protected from sequestration through 2016, but this bill would make that permanent.

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On the Hill & In the Courts

New CBO chief expects to use dynamic scoring more, especially as it relates to health care

In May, the new director of the CBO announced that the agency will increase use of dynamic analysis in its scores of policy changes. In a May 19 hearing before the Senate Budget Committee, Keith Hall explained that the agency would begin incorporating dynamic scoring for certain legislation, particularly for changes to health care policy. Hall specifically referenced health care because of recent spending growth in the US.

This push to incorporate more dynamic scoring is the result of Congress passing a concurrent resolution for the fiscal year 2016 budget. The resolution requires CBO to incorporate the updated scoring technique “to the greatest extent practicable” for major legislation. The switch from static scoring to dynamic scoring will likely affect future legislation impacting Medicare, Medicaid and other federal health programs and any potential modifications to the ACA.

Background: The CBO has used a similar scoring methodology to evaluate policy effects on federal spending and revenues since the budget process began in 1974. This process only examines microeconomic changes, whereas dynamic scoring takes into account macroeconomic effect and estimates the impacts that policies have on economic growth and employment. This can give a more complete picture of the economic effects of policies to determine that the full effect of policies is considered. Dynamic analysis, however, requires assumptions about future policy changes and is extremely sensitive to those assumptions, which can lead to distortions of its own. Hall also said that the CBO has been training new analysts to be able to use this new scoring on the health care industry and future projections.

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House lawmakers introduce a bill to create the Comprehensive Care Payment Innovation program

On May 21, Representatives Diane Black and Richard Neal introduced the Comprehensive Care Payment Innovation Act (H.R. 2502). The legislation would create a permanent, voluntary program within Medicare that pays health care providers and suppliers per episode of care. An episode is currently defined by the legislation as the time period of three days before a patient is admitted to the hospital through 90 days post-discharge.

The Comprehensive Care Payment Innovation (CCPI) program would require participating providers to enter a five-year agreement and meet certain quality measures in order to receive bonuses/shared savings. Initially, it would cover only six conditions:

  • Hip or knee joint replacement
  • Lumbar spine fusion
  • Coronary artery bypass graft
  • Heart valve replacement
  • Percutaneous artery intervention with stent
  • Colon resection

Additionally, the bill gives the Secretary of HHS discretion to include additional conditions or procedures in the program.

The CCPI program would provide a comprehensive payment for certain Medicare Parts A and B services, including readmissions for related conditions. Two payment models would be available to qualified providers. The first is a retrospective model based on fee-for-service payments. This model would compare provider payments to designated spending targets for a given condition and share savings or losses with health care providers depending on whether their payments fall below or above the targets. The second model is a prospective payment bundle for a particular episode. Providers who select this model would be paid at the target rate for an episode of care.

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New law expands veteran access to private care under Veteran’s Choice program

Last week, President Obama signed into law the Construction Authorization and Choice Improvement Act (H.R. 2496). In addition to providing critical funding for the construction of a health center in Denver, Colorado, the law also amends the Veterans’ Choice program. This program was established last year to help improve veterans’ access to care by allowing eligible individuals to receive private medical care paid for by the US Department of Veterans Affairs (VA). The eligibility criteria for the program have come under some scrutiny since its inception last August, so these changes are welcomed by many veterans and their advocates.

Previous law stated that if a veteran lives 40 miles or more from a VA facility (defined to include community-based outpatient clinics), he or she is eligible to receive non-VA care through the Veterans’ Choice program. There has been confusion on whether the 40 miles is measured as a straight-line path or by actual driving distance. This law clarifies that the 40 miles should be calculated based on distance traveled. Many lawmakers and veteran advocates see this change as a step in the right direction, but seek additional reform to the program. VA facilities are often within 40 miles, but may not provide the services that a veteran requires. Many want the law to take into account veterans’ needs when assessing the 40 miles requirement. But proposals to solve this problem have been estimated to cost between $4 billion and $34 billion according to Deputy Secretary of the VA, Sloan Gibson.

The law allows veterans with a medical condition that impacts their ability to travel to be eligible for the program. Additionally, it adds environmental factors (e.g., traffic, inclement weather) to the existing factors deemed to cause unusual or excessive burden in accessing a VA facility. If any of these criteria are met, veterans can use a non-VA provider to receive the care they need even if there is a VA facility within 40 miles.

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Legislation in five states addresses interchangeability of biosimilar products

Five states – Colorado, Georgia, Tennessee, Utah and Washington – have passed laws that would allow FDA-approved interchangeable biosimilar products to be used in place of the drug prescribed without provider approval.

These laws are important because while the FDA oversees the approval of biosimilars, states decide if biosimilars may be substituted and if a pharmacist must inform patients and doctors about the substitution. Prior to the advent of biosimilars, at least 14 states and Puerto Rico required pharmacists to substitute a generic version of a drug if all prescription requirements were met.

However, because biologic medicines are made from living organisms, they are more complex than traditional, chemically synthesized drugs. No biosimilar can exactly replicate the living organisms, and this creates slight variation. To address these concerns, at least 23 states have considered various legislative proposals to establish standards for biosimilar substitution over the past two years. Before any biosimilar product can be considered for substitution, it must be approved by the FDA as "interchangeable.”

Background: Many groups have expressed concern about the high cost of biologic drugs. In 2010, spending on biologics in the US was approximately $67 billion and comprised roughly 30 percent of the overall prescription drug market. The hope is that biosimilar versions of drugs will cost much less than their reference products. Biosimilar industry groups, such as the Generic Pharmaceutical Association (GPhA) and its Biosimilars Council, have been pushing for automatic substitution laws to increase market demand for biosimilars.

Though the majority of laws passed in the states still require provider or patient notification, the GPhA continues to oppose legislation that would mandate prescriber notification. Most states are finishing the final days of their legislative sessions, but policies governing biosimilar use likely will continue to be an issue to watch moving forward.

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Around the Country

Study finds that even with narrow networks in marketplace plans, access is similar to commercial plans

A new study on provider networks in California’s health insurance marketplace suggests that narrow networks in these plans do not limit access. The study, published in Health Affairs, found that in California, consumers with marketplace plans have similar access to care compared with consumers who are insured through commercial plans in the state. The authors looked at differences in hospital networks across similar plan types offered both on and off the marketplace. They found that while the networks were typically more restrictive within the marketplace, there did not seem to be differences in access between individuals in the same geographic areas.

Shortly after the public health insurance marketplaces began enrolling new customers, many patient advocates expressed concern that the narrow networks health plans had built into the new insurance plans would limit access for enrollees. They argued that in narrow networks, physicians’ offices that are in the network might have longer waitlists and patients might have to drive farther to seek care or turn to emergency departments for non-urgent care.

The researchers used two approaches to evaluate network and access: 

  • Network size: The researchers determined the percentage of hospitals in an area included in a plan relative to the total number of hospitals in the area. They then compared the percentage of hospitals in marketplace plans to the percentage of hospitals in commercial plans. Overall, the marketplace plans covered about 83 percent of networks that the commercial plans covered.
  • Access: The researchers used geographic information systems (GIS) software to define hospital services areas with a radius of 15 miles around each hospital. On average, 92 percent of residents were within at least one hospital market area in marketplace plans while 93 percent of those in commercial plans were in one hospital service area.

The researchers also looked at quality differences of the hospitals included in the network. They used three different sources for measuring quality – the Agency for Health Care Quality (AHRQ) and Research and California’s Office of Statewide Health Planning and Development, Leapfrog’s Hospital Survey and the Joint Commission’s Top Performers Ranking survey. The latter two data sources suggested that hospitals in marketplace networks were on average better than those in commercial plans, though the AHRQ data found no statistical difference in quality.

Though the focus of this study was limited to one state, it raises important points about access and quality for consumers purchasing plans through the new insurance marketplaces. On average, the networks are more limited, but this study suggests that marketplace consumers have comparable access to quality providers.

Related: Findings from the forthcoming Deloitte 2015 Survey of US Health Care Consumers indicate that marketplace enrollees reported an increase in access to care with their new coverage. Two-thirds of marketplace enrollees surveyed have used their plan benefits, and nearly three-fourths of benefit users believe they may not have been able to afford those services without their marketplace coverage. Additionally, marketplace enrollees are more than twice as likely as the uninsured to report having a primary care provider.

More importantly, willingness to accept network limits in exchange for lower premiums and copays has reached a new high, especially among younger enrollees. Up to 60 percent of surveyed insured consumers are now “willing” or “somewhat willing” to accept a smaller network of hospitals or a smaller network of doctors for a lower price, and just over half (52 percent) of the respondents express some willingness to accept a network that does not include their current primary care provider.

However, it’s important to note that consumers continue to struggle with health care affordability. One in three marketplace respondents have had trouble paying their out-of-pocket health care expenses. Overall, marketplace enrollee respondents are less confident they can get care that is affordable. They also feel less prepared financially to handle their future health care costs than individuals with other coverage. Ultimately, plan designs that optimize coverage-price tradeoffs and align closely with consumers’ personal coverage preferences may help to attract new enrollees and reduce churn within insurers’ books of business.

(Source: Simon F. Haeder, David L. Weimer and Dana B. Mukamel, “California Hospital Networks Are Narrower In Marketplace Than In Commercial Plans, But Access And Quality Are Similar,” Health Affairs, May 2015)

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Minnesota eases EHR requirements for certain physicians

On May 22, Minnesota enacted a bill to exempt solo practitioners and cash-only physicians from the state’s requirement that all providers use interoperable electronic health records (EHRs) in hospitals and clinical practices. In 2007, Minnesota mandated that all health care providers in the state implement an interoperable EHR system by January 1, 2015.

This comes shortly after Congress passed the Medicare Reauthorization and CHIP Reauthorization Act (MACRA), which mandates that EHRs be interoperable by 2018 and emphasizes enhanced EHR use as part of the new Merit-Based Incentive Payment System (see the April 21, 2015 Health Care Current).

Analysis: Ongoing changes in the medical industry continue to challenge the way many physicians practice medicine. Deloitte’s 2014 Survey of US Physicians found that though physicians think EHRs provide useful analytics (70 percent) and support value-based care (60 percent), 75 percent still report that EHRs increase costs and do not save time. As the industry continues to evolve to address challenges and integrate care, most physicians expect physician-hospital integration to increase. So the question remains whether exempting solo physicians from EHR mandates will support a critical need or if it will prolong the transformation toward integrated population health.

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Maple syrup’s potential for combatting antibiotic resistance

Maple syrup’s effectiveness on pancakes has long been recognized, but a recent study shows that the sap from maple trees may also increase the effectiveness of antibiotics. The study suggests that adding maple syrup extract to certain antibiotics may help destroy disease-causing bacteria. The findings are preliminary, and the mechanism has not been tested on animals or humans. But, the researchers hope that the extract may offer a strategy to address the worldwide antibiotic resistance crisis.

A research team from McGill University in Quebec purchased maple syrup from a Montreal market and then isolated phenolic compounds found in the syrup to create an extract. Phenols are a similar chemical to alcohol but also have their own set of unique properties, including higher levels of acidity. The team first added the extract to various infection-causing bacteria, such as E.coli, and found that it was partially effective in halting the spread of bacteria. Combining it with antibiotics increased the effectiveness.

More research is needed to understand the interaction between the maple syrup and antibiotics, but one mechanism the team identified is that the maple syrup appears to permeate the protective membrane surrounding the bacteria. The membrane around bacteria contains “pumps” that expel antibiotics. The maple syrup appears to knock out the function of these pumps so the antibiotic can do its job. Additionally, the maple syrup extract limited the gene expression responsible for how infectious the bacteria are. It also stopped the proliferation of bacteria on surfaces, known as biofilms.

Only one new class of antimicrobial drugs has been introduced in clinical practice in the last three decades. The lack of new novel drugs combined with overuse of antibiotics in humans and animals is the cause of the expanding problem of antimicrobial resistance. The research team hopes that more research will show combining the maple syrup extract with antibiotics could mean the same treatment can result from using less antibiotics. The study indicates that pharmaceutical companies could add the maple syrup extract to antibiotic pills to increase effectiveness.

Related: A new policy brief from Health Affairs and the Robert Wood Johnson Foundation illustrates the consequences of antibiotic resistance. In the US, methicillin-resistant Staphylococcus aureus (MRSA) kills more than 19,000 people annually. The policy brief examines the overuse and misuse of antibiotics, which resulted in many of the “superbugs” in the US and beyond. The brief describes efforts taken by federal health agencies to prevent the spread of drug-resistant bacteria and spur development of new antibiotics. The Generating Antibiotic Incentives Now Act of 2011 provides incentives for drug companies by adding a five-year extension to the exclusivity period of new antibiotics. The White House’s recent National Action Plan for Combating Antibiotic-Resistant Bacteria was accompanied by a proposed funding increase for the next fiscal year. The brief notes that new antibiotics are being developed in the research lab. Unfortunately, the failure rate for antibiotics moving from early discovery to actual drug approval is 97 percent.

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Breaking Boundaries

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