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Incentives for new antibiotics: the Options Market for Antibiotics (OMA) model.

Brogan DM, Mossialos E - Global Health (2013)

Bottom Line: Antimicrobial resistance is a growing threat resulting from the convergence of biological, economic and political pressures.The goal of this new model is to provide an effective mechanism for early investment and risk sharing while maintaining a credible purchase commitment and incentives for companies to ultimately bring new antibiotics to market.Additional work must be done to develop a more robust mathematical model to pave the way for practical implementation.

View Article: PubMed Central - HTML - PubMed

Affiliation: Department of Social Policy, London School of Economics and Political Science, London WC2A 2AE, United Kingdom. E.A.Mossialos@lse.ac.uk.

ABSTRACT

Background: Antimicrobial resistance is a growing threat resulting from the convergence of biological, economic and political pressures. Investment in research and development of new antimicrobials has suffered secondary to these pressures, leading to an emerging crisis in antibiotic resistance.

Methods: Current policies to stimulate antibiotic development have proven inadequate to overcome market failures. Therefore innovative ideas utilizing market forces are necessary to stimulate new investment efforts. Employing the benefits of both the previously described Advanced Market Commitment and a refined Call Options for Vaccines model, we describe herein a novel incentive mechanism, the Options Market for Antibiotics.

Results: This model applies the benefits of a financial call option to the investment in and purchase of new antibiotics. The goal of this new model is to provide an effective mechanism for early investment and risk sharing while maintaining a credible purchase commitment and incentives for companies to ultimately bring new antibiotics to market.

Conclusions: We believe that the Options Market for Antibiotics (OMA) may help to overcome some of the traditional market failures associated with the development of new antibiotics. Additional work must be done to develop a more robust mathematical model to pave the way for practical implementation.

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Related in: MedlinePlus

Number of New Molecular Entities Approved by the FDA per 5 year period through March 2011.  Source: [10]. By permission of Oxford University Press/on behalf of the Infectious Disease Society of America. Any reuse requires permission from Oxford University Press.
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Figure 1: Number of New Molecular Entities Approved by the FDA per 5 year period through March 2011. Source: [10]. By permission of Oxford University Press/on behalf of the Infectious Disease Society of America. Any reuse requires permission from Oxford University Press.

Mentions: As a class of drugs, antibiotics have several unique properties which make them less profitable and therefore less attractive to corporate investment. To begin with, many antibiotics are prescribed for a relatively short course, anywhere from 3 days to 2 weeks, as compared to a course of years or decades for anti-hypertensive or cholesterol medications. Contributing to the decline is the fact that most effective antibiotics currently available are generics, with new medications often having difficulty gaining ground or showing adequate cost-effectiveness to justify a premium price [7]. Additionally, consumption of antibiotics is intentionally kept low by prescribers, for fear of breeding “super-bugs” – bacteria resistant to multiple classes of antibiotics. However, even with judicious prescribing of antibiotics, a century’s worth of experience has demonstrated a constant struggle to find new methods to combat bacteria, as bacteria evolve new mechanisms to resist current drugs. A high cost and significant technical effort is required to find new antibiotics, particularly against Gram negative bacteria [8]. Additionally, after the technical challenges are overcome, clinical trials for antibiotics can be costly and demanding as they require different trials for each new indication in varying organ systems [8], resulting in higher clinical costs than drugs in other therapeutic categories [9]. All of these factors combine to produce an inherent tension between health policy and industry research objectives. The market also fails specifically for antibiotics because the necessity for continual development of new antibiotics stems from the impending future threat of resistance, not just the current lack of efficacy. A critical market demand large enough to spur development may not exist until a crisis has emerged. The result, as shown in Figure 1, [10], is that the total number of new molecular entities of antibacterials approved annually has slowly declined over the past two decades.


Incentives for new antibiotics: the Options Market for Antibiotics (OMA) model.

Brogan DM, Mossialos E - Global Health (2013)

Number of New Molecular Entities Approved by the FDA per 5 year period through March 2011.  Source: [10]. By permission of Oxford University Press/on behalf of the Infectious Disease Society of America. Any reuse requires permission from Oxford University Press.
© Copyright Policy - open-access
Related In: Results  -  Collection

License
Show All Figures
getmorefigures.php?uid=PMC4226193&req=5

Figure 1: Number of New Molecular Entities Approved by the FDA per 5 year period through March 2011. Source: [10]. By permission of Oxford University Press/on behalf of the Infectious Disease Society of America. Any reuse requires permission from Oxford University Press.
Mentions: As a class of drugs, antibiotics have several unique properties which make them less profitable and therefore less attractive to corporate investment. To begin with, many antibiotics are prescribed for a relatively short course, anywhere from 3 days to 2 weeks, as compared to a course of years or decades for anti-hypertensive or cholesterol medications. Contributing to the decline is the fact that most effective antibiotics currently available are generics, with new medications often having difficulty gaining ground or showing adequate cost-effectiveness to justify a premium price [7]. Additionally, consumption of antibiotics is intentionally kept low by prescribers, for fear of breeding “super-bugs” – bacteria resistant to multiple classes of antibiotics. However, even with judicious prescribing of antibiotics, a century’s worth of experience has demonstrated a constant struggle to find new methods to combat bacteria, as bacteria evolve new mechanisms to resist current drugs. A high cost and significant technical effort is required to find new antibiotics, particularly against Gram negative bacteria [8]. Additionally, after the technical challenges are overcome, clinical trials for antibiotics can be costly and demanding as they require different trials for each new indication in varying organ systems [8], resulting in higher clinical costs than drugs in other therapeutic categories [9]. All of these factors combine to produce an inherent tension between health policy and industry research objectives. The market also fails specifically for antibiotics because the necessity for continual development of new antibiotics stems from the impending future threat of resistance, not just the current lack of efficacy. A critical market demand large enough to spur development may not exist until a crisis has emerged. The result, as shown in Figure 1, [10], is that the total number of new molecular entities of antibacterials approved annually has slowly declined over the past two decades.

Bottom Line: Antimicrobial resistance is a growing threat resulting from the convergence of biological, economic and political pressures.The goal of this new model is to provide an effective mechanism for early investment and risk sharing while maintaining a credible purchase commitment and incentives for companies to ultimately bring new antibiotics to market.Additional work must be done to develop a more robust mathematical model to pave the way for practical implementation.

View Article: PubMed Central - HTML - PubMed

Affiliation: Department of Social Policy, London School of Economics and Political Science, London WC2A 2AE, United Kingdom. E.A.Mossialos@lse.ac.uk.

ABSTRACT

Background: Antimicrobial resistance is a growing threat resulting from the convergence of biological, economic and political pressures. Investment in research and development of new antimicrobials has suffered secondary to these pressures, leading to an emerging crisis in antibiotic resistance.

Methods: Current policies to stimulate antibiotic development have proven inadequate to overcome market failures. Therefore innovative ideas utilizing market forces are necessary to stimulate new investment efforts. Employing the benefits of both the previously described Advanced Market Commitment and a refined Call Options for Vaccines model, we describe herein a novel incentive mechanism, the Options Market for Antibiotics.

Results: This model applies the benefits of a financial call option to the investment in and purchase of new antibiotics. The goal of this new model is to provide an effective mechanism for early investment and risk sharing while maintaining a credible purchase commitment and incentives for companies to ultimately bring new antibiotics to market.

Conclusions: We believe that the Options Market for Antibiotics (OMA) may help to overcome some of the traditional market failures associated with the development of new antibiotics. Additional work must be done to develop a more robust mathematical model to pave the way for practical implementation.

Show MeSH
Related in: MedlinePlus