Analytical Framework for Examining the Value of 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.