Antibiotic Reimbursement in a Model Delinked from Sales: A Benchmark-Based Worldwide Approach

Abstract

Despite the life-saving ability of antibiotics and their importance as a key enabler of all of modern health care, their effectiveness is now threatened by a rising tide of resistance. Unfortunately, the antibiotic pipeline does not match health needs because of challenges in discovery and development, as well as the poor economics of antibiotics.

Discovery and development are being addressed by a range of public-private partnerships; however, correcting the poor economics of antibiotics will need an overhaul of the present business model on a worldwide scale. Discussions are now converging on delinking reward from antibiotic sales through prizes, milestone payments, or insurance-like models in which innovation is rewarded with a fixed series of payments of a predictable size. Rewarding all drugs with the same payments could create perverse incentives to produce drugs that provide the least possible innovation.

Thus, we propose a payment model using a graded array of benchmarked rewards designed to encourage the development of antibiotics with the greatest societal value, together with appropriate worldwide access to antibiotics to maximise human health.

Keywords: antibiotic resistance, patents, intellectual property, health law, pandemics

JEL Classification: I12, I18, I19, K32, K39