Science and Technology

Analytical Framework for Examining the Value of Antibacterial Products. 5.1.3 Clinical Research Costs

Depending upon the characteristics of the diagnostic, manufacturers might be required to perform one or more clinical trials, to obtain data for a 510(k) and data to obtain a CLIA Waiver for POC use. While only a small fraction of 510(k) devices perform any clinical trials, most of the FDA-approved rapid diagnostics for bacterial diseases have c

Analytical Framework for Examining the Value of Antibacterial Products. 5.1.2 R&D Costs

R&D costs for a new rapid POC diagnostic are variable based on whether the diagnostic would require the development of a new platform (i.e., instrumentation) along with the test. Other factors also influence R&D costs, such as the existence of a predicate device. Given that there currently are FDA-approved MRSA tests in the market, we

Analytical Framework for Examining the Value of Antibacterial Products. 5.1.1 Real Opportunity Cost of Capital

As previously discussed (see Sections 3.2.1 and 4.2.1), the real opportunity cost of capital represents the rate of return (net of inflation) that a developer would otherwise be able to earn at the same risk level as the investment in the new rapid POC diagnostic that has been selected. Based on discussions with industry experts and published st

Analytical Framework for Examining the Value of Antibacterial Products. 5.1 Rapid POC Diagnostic Private ENPV Model Parameters and Assumptions

For the purposes of modeling the decision-making process and expected returns for a rapid point-of-care diagnostic producer, we selected a new rapid point-of-care diagnostic designed to identify methicillin-resistant Staphylococcus aureus (MRSA) that can cause serious infections, such as skin or wound infections, pneumonia, or infections of the bl

Analytical Framework for Examining the Value of Antibacterial Products. 5 Rapid Point-of-Care (POC) Diagnostics

There is a need for specific and inexpensive rapid point of care (POC) diagnostic tests that can be used for clinical management of infectious diseases. Diagnostics are important as they allow tailoring treatment with antibacterial drugs, reducing unnecessary antibacterial drug use and thereby delaying the development of antibacterial resistance

Analytical Framework for Examining the Value of Antibacterial Products. 4.5 Social EPV Results

We estimated the social EPV for a new ABOM vaccine to be $2.281 billion. Comparison of the social EPV value to private ENPV shows that the social EPV is substantially higher than the private ENPV by $2.213 billion.

Analytical Framework for Examining the Value of Antibacterial Products. 4.4.3 Per-Patient Willingness to Pay

Willingness to pay to avoid illness is calculated as the product of VSLY ($178,775) and the number of lost QALYs per patient (0.00493), which equals $881.

Analytical Framework for Examining the Value of Antibacterial Products. 4.4.2 Average Number of Lost QALYs for Patients with ABOM

The method by which the average number of lost QALYs due to ABOM was calculated is described in detail in Section 3.6.5.1.

Analytical Framework for Examining the Value of Antibacterial Products. 4.4.1 Expected Effectiveness of Vaccine

The expected effectiveness of the vaccine is used to determine how many cases of ABOM might be avoided as a result of the new vaccine being available, a component of social benefit. To estimate the effectiveness of a new ABOM vaccine, we used the midpoint of the range of 1 to 50 percent (25.5 percent) given by O’Brien, et al. (2009), which is

Analytical Framework for Examining the Value of Antibacterial Products. 4.4 Social EPV Model Parameters and Assumptions

The framework we used to assess social benefits for a new ABOM vaccine is the same as that used for antibacterial drugs and described earlier in this report. We use the same values for the real annual social discount rate, VSL, and VSLY as in the antibacterial drugs model. Table 20 presents the point estimates for the social EPV model parameters

Analytical Framework for Examining the Value of Antibacterial Products. 4.3 Private ENPV Results

We found that the private ENPV for a new ABOM vaccine is $515.1 million. This is positive, indicating that the expected returns from developing such a vaccine are greater than the development costs. It is also worth noting that the private ENPV for developing a new ABOM vaccine are much higher than the private ENPV for developing a new antibacteri

Analytical Framework for Examining the Value of Antibacterial Products. 4.2.8 Average Expected Price per Dose and Number of Doses

Before calculating the expected revenues that would be earned by the manufacturer of a new ABOM vaccine, we first estimated the total number of doses that would be required per patient and the average expected price per dose. These were then multiplied by the projected portion of the population that would use the vaccine over the next 20 years (

Analytical Framework for Examining the Value of Antibacterial Products. 4.2.7 Product Launch Success Probability

According to Griffin (1997), only about 60 percent of new product launches end up being commercially successful. As we did for antibacterial drugs, we use this as our basis for new vaccines. For sensitivity analysis, we use a triangular distribution for the product success probability with a lower bound of 40 percent and an upper bound of 80 p

Analytical Framework for Examining the Value of Antibacterial Products. 4.2.6 Total Product Life

As for drugs, we use 20 years to characterize the average life cycle of a new vaccine upon market approval (DiMasi, Grabowski, & Vernon, 2004). Though the span of time over which a vaccine is used may extend beyond this 20-year period, expected revenues from sales in years beyond 20 contribute very little to private ENPV due to discounting,

Analytical Framework for Examining the Value of Antibacterial Products. 4.2.5 Costs of Supply Chain Activities

Vaccine developers, like drug sponsors, need to undertake a variety of additional activities concurrently with clinical development, including sample preparation, process research, process development, process design, and plant design and construction. These activities are discussed in greater detail in Section 4.2.5, and Table 9 in Section 4.2.

Analytical Framework for Examining the Value of Antibacterial Products. 4.2.4 Pre-clinical, Clinical, BLA Submission Success Probabilities

Success probabilities (phase transition probabilities) applicable to vaccines were found in Struck, 1996. These were used as likely point estimates in the model, bounded as follows:

Analytical Framework for Examining the Value of Antibacterial Products. 4.2.3 Pre-Clinical, Clinical, and BLA Submission Phase Durations

As with drugs, private ENPV for vaccine development is dependent on the duration of each phase and the distribution of out-of-pocket costs throughout each phase. To estimate the lengths of these phases, we consulted DiMasi & Grabowski (2006), in which phase lengths of 52.0, 19.5, 29.3, and 32.9 months are reported for the pre-clinical phase,

Analytical Framework for Examining the Value of Antibacterial Products. 4.2.2 Pre-Clinical, Clinical Phase, and BLA Submission Costs

We estimated per-phase costs for vaccine development using out-of-pocket pre-clinical and clinical period costs per investigational biopharmaceutical compound from DiMasi & Grabowski (2006). These estimates were given in 2005 dollars; therefore, we inflated them using a consumer price index for medical care from BLS. This resulted in cost

Analytical Framework for Examining the Value of Antibacterial Products. 4.2.1 Real Opportunity Cost of Capital

The real opportunity cost of capital represents the rate of return (net of inflation) that the vaccine developer would otherwise be able to earn at the same risk level as the investment in the new vaccine that has been selected.

Analytical Framework for Examining the Value of Antibacterial Products. 4.2 Vaccine Private ENPV Model Parameters and Assumptions

For the purposes of modeling the decision-making process and expected returns for a vaccine producer, we chose to model a theoretical new vaccine effective in preventing acute bacterial otitis media (ABOM). ABOM was chosen because otitis media is an infectious disease for which efforts to develop a preventive vaccine are already underway; theref

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