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Analytical Framework for Examining the Value of Antibacterial Products

Publication Date
Apr 14, 2014

Antibacterial resistance is a growing global problem. At least 2 million people in the U.S. acquire serious infections with bacteria that are resistant to one or more of antibacterial drugs designed to treat it. Despite the potential of new antibacterial products to reduce the social burden associated with resistant infections, development of antibacterials has been limited by insufficient return to capital invested in development of these products. This study, conducted by ERG develops an analytical decision-tree model framework that can be used to assess the impacts of different possible market incentives on the private and social returns to product development of new antibacterial products.
ERG evaluated the private and social returns associated with the development of antibacterial drugs for acute bacterial otitis media (ABOM), acute bacterial skin and skin structure infections (ABSSSI), community acquired bacterial pneumonia (CABP) complicated intra-abdominal infections (CIAI), complicated urinary tract infections (CUTI), hospital acquired/ventilator associated bacterial pneumonia (HABP/VABP); a new vaccine effective in preventing ABOM; and a new rapid point-of-care diagnostic designed to identify MRSA.
For antibacterial drugs, the average private return ranges from -$4.5 million (HABP/VABP) to $37.4 million (CABP). The average social value for the development of antibacterial drugs, however, ranges from a low of $486.6 million (ABOM) to a high of $1.217 billion (HABP/VABP). The private and social value for a new ABOM vaccine was estimated at $515.1 million and $2.281 billion, respectively. Similarly, the private and social value for new rapid point-of-care diagnostic designed to identify methicillin-resistant Staphylococcus aureus (MRSA) that can cause serious infections is estimated at $329.0 million and $22.1 billion, respectively.
The gap between the current private and social values of drug development suggests that incentives are desirable to stimulate the development of drugs to treat the six indications considered. It is also important to note that simultaneous institution of conservation mechanisms, such as education campaigns to promote prudent use, and other stewardship programs, are likely to alter the incentive levels identified in this study.