Personal ViewAntibiotic reimbursement in a model delinked from sales: a benchmark-based worldwide approach
Introduction
Antibiotics have transformed modern medicine and society, but the development of resistance is inevitable with their use. Resistance is of particular concern as a result of the weak development pipeline and the emergence of strains for which there are few therapies.1, 2
The causes of the thin pipeline are well understood: the discovery of antibiotics is difficult, clinical development of antibiotics is constrained and costly, and economic return on new antibiotics is generally poor.3, 4, 5 The first two challenges are being addressed via collaborative public–private partnerships6 and updates to regulatory pathways.7, 8, 9, 10 However, the economic challenge of antibiotics is rooted in a fundamental tension between the need for antibiotic conservation and the need for a sales-based return on investment to recoup development costs. New antibiotics are appropriately restricted from use, thus lowering sales. This decrease in sales leads to a low projected value and has reduced private antibiotic investment.5, 7, 11, 12, 13
Furthermore, estimating the market for a novel antibiotic is difficult. For example, carbapenem-resistant Enterobacteriaceae (CRE) are one of three urgent pathogens listed in the 2013 threat assessment produced by the US Centers for Disease Control and Prevention (CDC);2 however, predicting the size of the market a decade from now is a struggle for companies. For example, the market in Sweden for such a drug effective against CRE is currently exceedingly small: the entire country recorded only 94 cases of isolation of CRE during 2007–13, with only 24 cases of symptomatic infection.14 Furthermore, an entirely new drug might not have been needed since 73% of the isolates were susceptible to at least three classes of antibiotics. In the USA, the CDC has estimated about 9000 clinical cases of CRE per year,2 but many of these will be susceptible to a few existing drugs. Thus, the actual number of CRE cases per year in the USA requiring a new antibiotic is likely to be less than 9000. If infection prevention efforts are successful, future trends would be even lower: the US National Strategy projects a 60% decrease in CRE infections in US hospitals by 2020.15 These reductions are excellent public health targets but make the commercial case even more daunting.
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Addressing the economic challenge via a delinked model
Breaking the link between sales volume and return on investment is one possible approach to resolving the tension between antibiotic stewardship and business imperatives. Antibiotic delinkage pays companies on some basis other than sales volume, such as value or milestone-based payments. Delinkage could be implemented through payments of a predictable size and duration after successful registration of a new qualifying drug. Such payments would guarantee regulatory maintenance of the drug (eg,
Calculation of the size of delinked payments
Economic models might be useful in estimating the size of potential delinkage payments on the basis of recovering research and development costs. One model of net present value (NPV) of a new antibiotic transforms a money-losing drug to one with an NPV of US$300 million at the start of the research and development process through the promise of future payments of $500 million per year for the first 5 years after initial registration.18 The Review on Antimicrobial Resistance19 commissioned in
Analogy to the insurance value of fire prevention and control services
Antibiotics could offer insurance value merely by being available for use, hence creating an environment wherein medical care, travel, and commerce can be confidentially pursued. In this regard, antibiotics and infection control bear a striking resemblance to the fire-fighting infrastructure: the microbiology laboratory serves as the smoke detector, medical personnel are the fire fighters, and antibiotics are the water supply. All of these elements have to be established before the fire
Benchmarks for delinked incentives
Delinked incentives should require delivery to market of a qualified drug; however, they equally need to recognise that initial approval is only one step towards understanding a new drug. The updated regulatory pathways that permit initial registration with small datasets in many ways implement an adaptive (or progressive) licensing approach28 in which initial registration is presumed to be followed by further investigations. Thus, delinkage should not be front-loaded at the moment of
Limitations and further questions
This proposal has many limitations and questions for further study (panel). The benchmark payment values in table 2 need to be modelled on the basis of audited parameters and agreed by many stakeholders. Stable funding will be needed, with incremental worldwide funding in the range of $2–4 billion per year. However, since the worldwide antibiotic market is roughly $40 billion per year, investments of this magnitude are quite reasonable to preserve this life-saving class of drugs.35 Creation of
Conclusion
We need new antibiotics that have the greatest societal value. Delinked payments can be designed with a base payment linked to the registration of a new qualifying antibiotic and a set of incremental benchmark payments earned by demonstration of specific properties of the new drug. The strength of this proposal comes from the simplicity of benchmarks and their direct linkage to features offering societal value. The scheme encourages novel drugs, foresees the need for multiple drugs in a class,
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Cited by (75)
Challenges in the development of novel antibiotics
2023, Antibiotics - Therapeutic Spectrum and LimitationsAntimicrobial Resistance: Is Health Technology Assessment Part of the Solution or Part of the Problem?
2021, Value in HealthCitation Excerpt :Even if we could have perfect data about resistance patterns up to the present and perfect trial data about the performance of a new technology (and currently we are far from having either), we would not know how to extrapolate this information to predict future resistance trends if the technology were to be deployed. Nevertheless, despite this uncertainty, we need antimicrobial agents to provide protection against a potential future pandemic or rapid change in epidemiology, much as we need the protection that fire departments and the military provide, even if future demand for the new technologies proves to be lower than predicted.41 The shortcomings of HTA agencies identified in the previous section relate to their capacity to make assessments of new technologies to combat AMR in particular.
Reimbursement models to tackle market failures for antimicrobials: Approaches taken in France, Germany, Sweden, the United Kingdom, and the United States
2021, Health PolicyCitation Excerpt :England represents approximately 2% of global pharmaceutical sales and 3.5 % of G20 GDP; applying these proportions to the estimated required global incentives results in a “share” of US$40–140 million (or about £30–100 million) over 10 years. The cap of £10 million per year per antimicrobial cap thus represents the top end of this range [5,36,37]. The UK pilot model is the first that switches from procurement of antibacterials by volume to procurement of antibacterials as a service (or ‘subscription’).
Needs assessment for novel Gram-negative antibiotics in US hospitals: a retrospective cohort study
2020, The Lancet Infectious DiseasesCitation Excerpt :A growing number of antibiotics for Gram-negative infections (GNIs) have gained approval in recent years, but the projected pipeline lacks paradigm-shifting innovation.1 Private sector investment has dwindled owing primarily to lack of return on investment, in part attributed to the relative rarity of drug-resistant infections.2 Furthermore, as of 2020, the sales-based revenue model seems misaligned with the ethos of antibiotic stewardship programmes aimed at slowing resistance and minimising cost.3
Strategies to improve antibiotic access and a way forward for lower middle-income countries
2024, Journal of Antimicrobial Chemotherapy