Recommended Post-Market Incentive Strategies to Support the Development of Innovative Antibiotics

  22 September 2020

New antibiotics struggle to generate financial returns for several reasons. First, hospital antibiotic stewardship programs restrict the use of newer antibiotics to cases where there are few or no other treatment options.

1 Because unit-sales generate revenue under current fee-for service (FFS) payment schemes, stewardship limits revenue. Second, regulatory approvals based on non-inferiority trials do not provide comparative effectiveness evidence to justify rapid adoption of new antibiotics or enhanced reimbursement for innovative characteristics.

2 Widespread adoption is delayed until data regarding new antibiotics’ effectiveness and susceptibility to resistance is collected and disseminated.

Third, rising reimbursement pressures and constrained hospital budgets encourage providers to first prescribe the least expensive therapeutic option. New antibiotics are usually more expensive, which may reduce their frequency of use. Because new antibiotics face these persistent challenges, post-market incentives are needed to sustain antibiotic research and the development pipeline.

Further reading: Duke Margolis Center
Author(s): Monika Schneider, Nicholas R. Harrison, Mark B. McClellan
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