Randi Hernandez was science editor at Pharmaceutical Technology from September 2014 to May 2017.

Randi Hernandez

	FDA announced on March 21, 2016, it has approved Anthim (obiltoxaximab), a monoclonal antibody (mAb) intravenous injection meant to treat patients after exposure to anthrax. It was also approved as an emergency injectable to prevent the inhalation of anthrax spores in instances where there is a threat of bioterrorism.

	Inhalational anthrax occurs when a person inhales the spores of the bacterium 

. According to the Centers for Disease Control (CDC), inhalational anthrax is the most deadly form of the disease, and without treatment, only about 10–15% of patients with inhalation anthrax survive. With aggressive treatment, says the CDC, about 55% of patients are able to overcome disease. When administered in combination with antibiotics (e.g., levofloxacin, ciprofloxacin and doxycycline), Anthim produced higher survival outcomes compared with the use of antibiotics alone. Although the mAb itself does not have any antibacterial activity, it works by binding to the protective antigen component of anthrax toxin and neutralizing its activity so that it cannot enter cells.

	“Elusys is delighted to receive FDA approval for Anthim and, in addition to FDA, we thank the Biomedical Advanced Research and Development Authority (BARDA), the National Institutes of Health (NIH), and the Department of Defense (DoD), as well as our group of prominent biotech investors, for their ongoing collaboration and support,” said Elizabeth Posillico, PhD, president and CEO of Elusys Therapuetics, the drug maker of Anthim. “This marks a historic milestone for our company, resulting from an unprecedented partnership with several government agencies, to develop a new anthrax antitoxin that will be an important addition to the Strategic National Stockpile (SNS) and help protect the safety of our citizens and emergency personnel in the event of biowarfare attack. We are continuing product development to deliver additional treatment options to the SNS and further protect Americans.”

	Although bioterrorism is one of the potential origins of inhalational anthrax, people who work with animals and animal hides are also susceptible to breathing in the spores if the animals are infected. There have also been documented cases of anthrax from the ingestion of raw or undercooked meat from infected animals and cases of cutaneous anthrax after exposure to contaminated animal hides. Lastly, in northern Europe, there have been some cases of anthrax as a result of using contaminated needles between drug users.

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The BARDA-supported monoclonal antibody was approved both as a treatment after anthrax exposure and as an anthrax prophylactic.

Inhalational Anthrax Treatment, Anthim, Receives FDA Approval

	On March 9, 2016, the Community Oncology Alliance (COA), a non-profit organization dedicated solely to the practice of community oncology, wrote a letter to the Centers for Medicare and Medicaid Services (CMS) stating its opposition to the new reimbursement rules for Medicare Part B that were proposed on March 8, 2016. The group, which said it will actively pursue “every legal, legislative, and related option to stop the CMS Medicare Part B Drug Payment Model,” provided numerous reasons in its letter why it thinks the plan is fundamentally flawed.

	First, the group says that as a result of a change in the Medicare Modernization Act (MMA), CMS mandated that pharmaceutical manufacturers include “prompt pay” discounts in the calculation of a drug’s average sales price (ASP). These discounts were traditionally only brokered between manufacturers and drug wholesalers, but were then required for ASP calculations. This change, according to the COA, artificially lowered “the Medicare reimbursement rate for cancer drugs from ASP plus 6% to closer to ASP plus 4%.”

	Second, the sequester to Medicare drug reimbursement lowered the payment for cancer drugs even further, dropping the effective reimbursement rate to approximately ASP plus 2%. After accounting for the actual costs related to procurement of drugs, handling, storage, inventory, drug preparation, and waste removal, financial incentives for physicians are virtually non-existent-and in some cases, drugs may now actually be reimbursed below cost.

	The plan was not created with input from industry experts or stakeholders, asserts the COA, and is not in alignment with the purpose of the Affordable Care Act. It is simply a “plan to circumvent Congress,” notes the letter.

The real increases to Medicare Part B are a result of practice consolidation


	The COA points the finger at hospital mark-ups for price increases of Medicare Part B drugs, and says that one of the main reasons so many smaller oncology practices are being purchased by large hospital systems is because physicians have no financial incentives to administer drugs, whereas hospitals can increase profits by absorbing smaller practices and billing for drugs at higher rates via the Medicare Hospital Outpatient Prospective Payment System. 340B discounts, the group says, also provide an enormous incentive for hospitals to incorporate smaller practices.

	“The proposed cut to the ASP plus 6% drug reimbursement rate to ASP plus 2.5% plus a flat fee is based on an insulting assumption that community oncologists practice medicine solely by financial incentives, not by what is in the best interests of their patients,” concluded the letter. “This is not only highly offensive and derogatory, but also simply not grounded in fact.”

The group argues that the so-called “incentives” for physicians to prescribe more costly medications are essentially non-existent following a handful of prior cuts to Medicare Part B reimbursement.

The Community Oncology Alliance Calls CMS’ Medicare Part B Reimbursement Proposal ‘Perverse’ and ‘Inappropriate’

	Concerns that physicians are not prescribing the most cost-effective medications available have prompted the Centers for Medicare and Medicaid Services 

 a set of new potential reimbursement schemes for Part B drugs in Medicare. CMS says the new proposed rule will test new payment approaches to reward good patient outcomes and will inject value into the system.

	Prescription drug spending in the United States totaled approximately $457 billion in 2015, or 16.7% of overall health spending, according to a 

 released on March 8, 2016. In 2015, Medicare Part B spent $20 billion on outpatient drugs administered by physicians and hospital outpatient departments.

	Medicare Part B drugs-which are typically administered in a hospital, in a physician’s office, or in an outpatient setting-are currently reimbursed by a drug’s average sales price plus 6%. Rather than this rate, which has the potential to give physicians an incentive to choose costlier medications when cheaper alternatives are available, CMS proposes that the rate be lowered to 2.5% and be coupled with a flat fee of $16.80 per drug per day. CMS estimates that this new reimbursement method will cover the cost of any drug paid under Medicare Part B, but did not provide examples of high-cost drugs that may not be fully reimbursed under this scheme. The new rates would provide bigger incentives than were previously available for physicians to prescribe lower-cost medications. Although providers would be making slightly less than before for choosing costly medications, they would still stand to make more of a profit in these circumstances than they would for choosing lower-cost alternatives.

	Under the proposal, CMS suggested various additional changes to help pay for drugs under Part B. These include decreasing or eliminating cost sharing for patients, using reference pricing for groups of therapeutically equivalent drugs, linking patient outcomes with pricing adjustments, providing physicians with feedback on prescription best practices and a physician’s patterns compared with other providers in a region or across the nation, and reimburse for a drug based on its proven efficacy for a particular indication.

	The CMS plan would run over the course of five years, but value-based purchasing tests would not be fully operational until the beginning of 2019. “These models would test how to improve Medicare beneficiaries’ care by aligning incentives to reward value and the most successful patient outcomes,” said Patrick Conway, MD, CMS deputy administrator for Innovation and Quality and CMS chief medical officer. “The choice of medications for beneficiaries should be driven by the best available evidence, the unique needs of the patient, and what best promotes high quality care.”

	The Pharmaceutical Research and Manufacturers of America group (PhRMA) released a statement on March 8, 2016 saying that the current Medicare Part B payment methodology already controls costs effectively, and that the United States Department of Health and Human Services (HHS) has already successfully tied 30% of Medicare payments to accountable-care organizations. PhRMA spokesperson Allyson Funk 

, "Proposing sweeping changes to Medicare Part B drug reimbursement without thoughtful consideration and stakeholder input is not the right approach and puts Medicare patients who rely on these medicines at risk."

	Meanwhile, the American Society of Clinical Oncology 

 the proposal that seeks to modify ASP "misses the mark" and says that "it is inappropriate for CMS to manipulate choice of treatment for cancer patients using heavy-handed reimbursement techniques." The organization plans to send detailed comments to CMS about the problems with the proposal, adding, "Physicians did not create the problem of drug pricing and its solution should not be on their backs."

The five-year Medicare initiative seeks to change the way in which drugs are reimbursed under Medicare Part B.

CMS Proposes New Payment Models for Part B Drugs

	The US Drug Enforcement Agency (DEA) has granted permission for the import of pharmaceutical-grade cannabidiol to Catalent Pharma Solutions for a feasibility study in conjunction with Kannalife Sciences, 

 to a company press release. Upon completion of the feasibility study, Kannalife will investigate the product’s ability to treat hepatic encephalopathy and chronic traumatic encephalopathy, which are neurodegenerative conditions. Additional research and development for the drug candidates will occur at The Pennsylvania Biotechnology Center in Doylestown, PA, and in other contract manufacturing facilities designated by Kannalife’s scientific team.

	Kannalife’s research is bolstered by two licenses from the National Institutes for Health for a 

 “Cannabinoids as Antioxidants and Neuroprotectants.” Specifically, the patent, licensed by Kannalife, claims cannabidiol could be used to prevent “glutamate-induced damage in the central nervous system,” among other things. The company’s specific product of interest, KLS-13019, is a novel cannabidiol-like therapeutic compound that is being investigated as a possible treatment for oxidative stress-related diseases.

	Kannalife teamed up with Catalent to conduct feasibility studies to investigate shelf stability and dose-dependent administration of the cannabidiol drug target being formulated for the company’s cannabinoid-derived therapeutic agent. The information gleaned from the feasibility studies will help Kannalife further its preclinical development of the target drug candidate and the company’s filing of an investigational new drug (IND) application for clinical studies in humans.

	The cannabidiol procured by Kannalife, which itself has no psychoactive effect, is a synthetic white solid that is not naturally derived, Kannalife CEO, Dean Petkanas, told 

. The sources for this synthetic product within the United States were limited, he noted, and the company needed a large quantity of this raw API to conduct feasibility studies. Although Petkanas said there were a few potential suppliers in the US, “capacity was constrained,” and therefore, the synthetic product had to be imported from a supplier outside of the country.

	Similar cannabis-based formulations and structural analogs of cannabidiol by other drug companies are currently in development for the treatment of other chronic conditions. One such company recently in the news is GW Pharmaceuticals. The combination of research on cannabidiol oil by GW and the company’s IND applications, coupled with the medical claims of online companies marketing and selling CBD oil, prompted FDA to send warning letters to these online merchants in early February 2016. Because CBD oil is being examined for its medicinal properties in an IND, it cannot be considered a dietary supplement-and thus, cannot be sold online under these pretenses, the FDA said in the warning 

The US Drug Enforcement Agency (DEA) has granted permission for the import of pharmaceutical-grade cannabidiol to Catalent Pharma Solutions for a feasibility study in conjunction with Kannalife Sciences, according to a company press release.

US Regulators Permit Kannalife Sciences to Import Cannabidiol for Feasibility Studies

	Kite Pharma noted in a fourth-quarter earnings call that the company has been studying different cell types within its final product to determine which phenotype of T cell is the best producer of quality effector cells. David Chang, chief medical officer and executive vice-president of research and development at Kite Pharma, said that in the past two to three years, the company has been trying to "skew the cell population to more naïve cells, because all the data indicate naïve cells are the ones that expand better and [are] more potent in terms of antitumor activity."

	Cell-culturing methods have been found to influence cell phenotype, and according to previous studies 

 "cells with a younger phenotype or higher proliferative capacity perform better in preclinical models." Cells with younger phenotypes are often called naïve cells or cells with stem memory phenotypes. Barrett et al. said that many early studies on chimeric antigen receptor T cells (CAR-T) were not successful because there were issues with the proliferation and persistence of cells following adoptive transfer.

	Chang attributed the success of Kite's investigational product candidate, KTE-C19, to the fact that the company has improved its cell-culture methodologies. "So one thing that we haven’t really talked about much is just the process of shortening the cell expansion duration," said Chang, who added that a shorter cell-expansion period could drastically improve cell proliferation. "Our manufacturing takes about six to eight days, and the shorter the duration of cell expansion allows you to keep the cells in a much more naïve state ... that alone I believe has led our KTE-C19 product to be more potent."

	The company is evaluating other methods to improve its cell-culture methodologies, noted Chang. "There are other ways to continue to keep the cells naïve and that includes using different cytokines during the cell manufacturing process or using inhibitors of certain pathways to keep the cells from differentiating." He added, "as we move forward with the next-generation products-T-cell receptor products-we’ll talk a lot more about how we’re refining the manufacturing itself to keep the cells more potent. And therefore, hopefully, they will work much better clinically."

The pharma company revealed in a fourth quarter call that it will improve its cell-culture capabilities by focusing on the use of naïve, highly proliferative cells to manufacture its CAR-T drug candidate.

Kite Pharma Stresses Importance of Cell-Culturing Techniques

	Repligen reported a revenue increase of 45% at constant currency in the fourth quarter of 2015, which was driven primarily by strong growth in sales of its bioprocessing products, Jon K. Snodgrass, CFO of Repligen, noted during a fourth-quarter conference call. Specifically, the increased revenue came from the sales of its growth factors, ATF (alternating tangential flow) systems and consumables, and products from its chromatography group (e.g., OPUS columns, Protein A resins, and ELISA kits).

	Tony J. Hunt, CEO of Repligen, said that the company's ATF system was instrumental in the company's success. Repligen obtained the ATF system through its acquisition of Refine Technology on June 2, 2014. The ATF system contributed to more than $15 million in Repligen’s 2015 revenue, which represents 40% growth in this business from 2014 figures. Additionally, Hunt said the company saw a 30% market increase in the use of benchtop units. "During Q4 we saw an acceleration and adoption of our ATF product portfolio as customers scaled up and implemented the ATF Systems in late-stage and commercial processes. This reinforces our position that the ATF technology is increasingly becoming an industry standard when it comes to improving cell-culture fermentation yields and streamlining cell harvesting."


	Although the company's main clients for its OPUS prepacked chromatography columns had historically been contract manufacturing organizations, the company is now getting more orders directly from pharmaceutical companies. Hunt said, "In fact, in 2015 we had greater than 50% increase in revenues from large pharma. A small but growing number of these large pharma customers are now beginning to commit to going 100% to prepack columns." In response, the company plans to add more capacity for OPUS columns and will add sales representatives to areas outside of Europe, where 50% of the company's direct sales currently occur.

Long-term agreements with key vendors renewed


	There are more monoclonal antibody products in the pipeline than ever before, which Hunt said will continue to help its Protein A ligands business. He noted that GE Healthcare signed on to extend its long-term supply agreement so that Repligen would be its main supplier of recombinant and native forms of ligands until the end of 2019. Repligen's supply agreement with Merck Millipore for growth factors and other products will also be extended until 2023, he noted.

An increase in biosimilars will support Repligen’s future business


	Hunt mentioned that whether a company is working on the development of an innovator molecule or a biosimilar, they will still need the same materials to complete the work, and Repligen is prepared to support both types of manufacturers. "So whether it is an originator molecule that moves through Phase III into approval or it’s a biosimilar, we’re agnostic because from a Protein A ligand point of view, its purely a volume play … we will ship to our top two customers in GE and Millipore the same amount of ligand to do purification of a biosimilar as [we] would [for] the purification of an originator molecule."

Company representatives said a bulk of the increase was due to strong sales of its bioprocessing products.