Coronavirus bill includes antibiotic, net operating loss carryback, drug shortage provisions

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The phase three coronavirus stimulus bill that is expected to be signed into law next week is likely to include provisions that are intended to stimulate development of antibiotics, relax limits on carrying back net operating losses, mitigate drug shortages, and speed FDA review of medicines to treat and prevent COVID-19.

Republican Senate leaders are negotiating with Democrats in both houses of Congress on revisions to the CARES Act. A final vote is expected over the weekend or Monday.

The Coronavirus Aid, Relief, and Economic Security Act (CARES) Act introduced by Senate Republican leaders Thursday includes the Developing an Innovative Strategy for Antimicrobial Resistant Microorganisms (DISARM) Act, which seeks to create economic incentives for new antibiotic development and for antibiotic stewardship.

The DISARM legislation, which is supported by antibiotic manufacturers as well as medical and infectious disease advocacy groups, would create higher Medicare reimbursement for some new antibiotics, removing incentives for hospitals to choose lower-cost antibiotics. In exchange for receiving high reimbursements for using newer antibiotics, hospitals would have to institute antibiotic stewardship programs.

As part of a broad set of measures that are intended to stimulate business activity, the bill seeks to dial back provisions in the 2017 tax law that eliminated the ability of companies to carry back net operating losses. The bill would allow a five-year carryback for losses from 2018, 2019 and 2020.

The CARES Act would create an FDA Priority Review pathway to expedite the review of animal drugs that have the potential to prevent or treat zoonotic diseases that could cause serious adverse health consequences in humans. It also would instruct FDA to expedite reviews of COVID-19 therapies and codify steps the agency has taken to facilitate laboratory developed tests for SARS-CoV-2, the virus that causes COVID-19.

Other provisions in CARES are aimed at mitigating drug shortages caused by supply chain disruptions. In an attempt to address data gaps exposed by manufacturing shutdowns in China in December and January, the bill seeks to extend drug company reporting requirements about possible shortages to include information about supplies of active pharmaceutical ingredients (APIs).

CARES also would consolidate responsibility for the strategic national stockpile in the hands of HHS’s assistant secretary for preparedness and response (ASPR). Currently responsibility is shared by the ASPR, CDC and Department of Homeland Security.

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