HTA and Payment Mechanisms for New Drugs to Tackle AMR

Article by: Margherita Neri, Adrian Towse

A new OHE research paper summarises the findings of a project funded by the Wellcome Trust on innovative HTA methods and contracting for antibiotics. The paper provides an overview of the current state of HTA and contracting for antibiotics in France, Germany, Italy, Sweden, and the UK (England and Scotland), and of the recent proposals in the literature for revising them. It also includes the recommendations developed following a Forum on ‘Value Assessment and Contracting for Antibiotics’, which was held in February 2019 and involved various stakeholders from the countries included in this study.

Antimicrobial resistance (AMR) is a growing public health threat, limiting the ability of health care systems to prevent and treat infections and save lives. O’Neill (2014) [PDF] estimated that the value of the economic output that could be lost due to AMR, if action is not taken, could amount to $100 trillion by 2050. In parallel, global antibiotic development pipelines are weak, due to the scientific, regulatory, and economic challenges of bringing new antibiotics to the market. Various R&D incentives (‘push’ and ‘pull’) have been proposed to address the challenges associated with low economic returns from investment in antibiotics, including market entry rewards to provide predictable revenue to manufacturers. Value assessment methods recognising the value of new antibiotics to the whole health system are needed to help match the size of the required payments to the value that they offer.

The challenge with antibiotics assessment is that a considerable part of their value arises from ‘externalities’, namely the benefits and costs to the health system beyond those attributable to the treated patient. Examples of these ‘public health effects’ are linked to preventing the transmission of infections to other patients and slowing down the development of AMR. However, conventional HTA methods only include the effects associated with treating the immediate patient.

Previous OHE work by Karlsberg Schaffer et al. (2017) identified a number of public health benefits of antibiotics that are relevant to the health system but are traditionally not considered. These are transmission value, insurance value, diversity value, novel action value, enablement value, and spectrum value. Morton et al. (forthcoming) and Rothery et al. (2018) considered methods to include some of these elements of value in HTA systems that use quality-adjusted life years (QALYs). The proposed approaches aim to capture the public health effects of antibiotics as part of the cost-effectiveness estimates, for example by considering the relevant strategies of use of antibiotics and using dynamic modelling techniques to quantify the effects of resistance transmission and development.

A second challenge arises with the pricing of antibiotics. With traditional pricing arrangements, companies rely on volumes sold to generate revenues. In the case of antibiotics, stewardship will limit use of the drug depending on the pathogen-specific rate of AMR, while use will increase in the long-term, when the build-up of resistance means that the antibiotic is used as a first-line treatment. Hence, even if HTA methods can capture the public health value of antibiotics, it will be of no benefit to the innovator as larger volumes will be sold after patent expiry when the product is priced as a generic.

Daniel et al. (2017) have proposed an alternative contracting approach for antibiotics called the Priority Antimicrobial Value Entry (PAVE) award. The PAVE award combines a pre-set market entry reward in the first years after launch as a form of predictable revenue, and a progressive shift over time towards value-based contracts to stimulate continuous stewardship over the useful life of the antibiotic.

Awareness of the need to tackle AMR in the European countries of this study is high, as demonstrated by important policy measures that have been put in place to address AMR. In England for example, NICE and NHS England have recently announced a pilot programme of a delinked payment-based system. However, reforms to processes for rewarding and paying for new antibiotics are not high on the priority list in most European countries.

Our recommendations for encouraging further progress in antibiotic assessment and contracting are:

  • Governments and funding institutions should continue to advocate change to HTA and contracting for antibiotics around the world, and particularly within Europe.
  • Countries gaining first-hand experience with innovative HTA and contracting for antibiotics, like the UK, should share the learnings with other countries to contribute to the common understanding of the most effective policy interventions.
  • Governments should promote awareness of the need for, and approaches to, change of antibiotics assessment and contracting with internationally coordinated initiatives. EUnetHTA for example, or successor bodies, could be tasked with a role in developing a joint assessment of a new antibiotic, thus hopefully stimulating independent action.
  • To facilitate the adoption of the proposed approaches for measuring the public health value of antibiotics, which rely on complex modelling techniques, the elements of value that are most relevant for particular types of antibiotics and usage scenarios should be identified and expert elicitation should be used to inform modelling.
  • Antibiotic value should be determined on consideration of actual strategies of usage, even if these differ markedly from those tested in registration trials.
  • There is an overlap between the elements of value that are relevant for vaccines and antibiotics. The advanced modelling approaches that are used for vaccines could be transferred to antibiotics to model the patterns of transmission and herd immunity.
  • In the short-term, new antibiotics should be excluded from DRG-bundled payments to disincentivise the use of cheaper drugs when more expensive ones may be appropriate. ‘Volume-delinked’ payments may instead represent a longer-term solution because these schemes encourage better adherence to stewardship.



Neri, M., Hampson, G., Henshall, C. and Towse, A., 2019. HTA and payment mechanisms for new drugs to tackle AMR. OHE Research Paper, London: Office of Health Economics. Available at:

Related research

Ferraro, J., Towse, A. and Mestre-Ferrandiz, J., 2017. Incentives for New Drugs to Tackle Anti-Microbial Resistance. OHE Briefing. London: Office of Health Economics. RePEc.

Karlsberg Schaffer, S., West, P., Towse, A., Henshall, C., Mestre-Ferrandiz, J., Masterson, R. and Fischer, A., 2017. Assessing the Value of New Antibiotics: Additional Elements of Value for Health Technology Assessment Decisions. OHE Briefing. London: Office of Health Economics. RePEc.

Posted in Countering AMR, Health Technology Assessment, Pricing and Reimbursement | Tagged Research Papers