• All Topics
  • Health Technology Assessment (HTA)
  • Antimicrobial Resistance (AMR)
OHE OHE
Newsletter SignupSubscribe

News & Insights
  • News
  • Events
  • Insights
  • Bulletin
  • News
  • Events
  • Insights
  • Bulletin

News & Insights

  • News
  • Events
  • Insights
  • Bulletin
Newsletter SignupSubscribe
  • News
  • Events
  • Insights
  • Bulletin

Close
OHE OHE
  • Research & Publications
  • News & Insights
  • Education
  • Innovation Policy Prize
  • Events
  • About Us
  • OHE Experts
  • Contact Us
Newsletter SignupSubscribe

Research & Publications

All Publications

Filter by:
  • Antimicrobial Resistance (AMR)
  • Biosimilars
  • Cell and Gene Therapies
  • Chronic Diseases
  • Combination Therapies
  • COVID-19 Research
  • Digital Health
  • Drug Development/R&D
  • Emerging Markets
  • EQ-5D and PROMs
  • Health Care Systems
  • Health Data and Statistics
  • Health Technology Assessment
  • Precision Medicine
  • Real-World Evidence
  • Use of Medicines
  • Value-Based Pricing
  • Vaccine Research
  • Economics of Innovation
  • Measuring and Valuing Outcomes
  • Policy, Organisation and Incentives in Health Systems
  • Value, Affordability and Decision Making

News & Insights

  • News
  • Events
  • Insights
  • Bulletin

Education

  • Education Hub
  • OHE Graduate School
  • EVIA Programme
  • IRA Programme

Innovation Policy Prize

  • The Prize Fund
  • 2022 Prize Fund

Latest Research & Publications

  • Health Technology Assessment…
  • Israel

NICE enough? Do NICE’s Decision Outcomes Impact International HTA Decision-making?

andrew-butler-aUu8tZFNgfM-unsplash
Read more
  • Health Technology Assessment…
  • Value, Affordability, and…
  • Gene therapies

Are Recommendations for HTA of Gene Therapies Being Achieved?

cover 3
Read more
  • Chronic Diseases
  • Value, Affordability, and…
  • Dermatology

The Burden of Hidradenitis Suppurativa on Patients, the NHS and Society

jakob-braun-HfOOKAPsE28-unsplash
Read more
  • Digital Health
  • Economics of Innovation
  • Mental Health

Dementia in the UK: Estimating the Potential Future Impact and Return on Research Investment

image option 1
Read more
  • Precision Medicine
  • Economics of Innovation

The Case for Expanding Uptake of Next-Generation Sequencing for Lung Cancer in Europe

NGS report_AdobeStock_406823942_portrait
Read more
  • Antimicrobial Resistance (AMR)
  • Economics of Innovation

A Novel Incentive Model for Uptake of Diagnostics to Combat Antimicrobial Resistance

Roche AMR diangostics_national-cancer-institute-2fyeLhUeYpg-unsplash_portrait
Read more
  • Health Technology Assessment…
  • Value, Affordability, and…
  • Pricing and Reimbursement

Real-World Evidence: Current Best Practice for Reimbursement Decision-Making

RWE_clay-banks-b5S4FrJb7yQ-unsplash_portrait
Read more
  • Value-Based Pricing
  • Economics of Innovation
  • Pricing and Reimbursement

Delivering the Triple Win: A Value-Based Approach to Pricing

Triple_Win_AdobeStock_249059909_portrait_v2
Read more
Close
OHE
  • All Publications

    Filter by:
    • Antimicrobial Resistance (AMR)
    • Biosimilars
    • Cell and Gene Therapies
    • Chronic Diseases
    • Combination Therapies
    • COVID-19 Research
    • Digital Health
    • Drug Development/R&D
    • Emerging Markets
    • EQ-5D and PROMs
    • Health Care Systems
    • Health Data and Statistics
    • Health Technology Assessment
    • Precision Medicine
    • Real-World Evidence
    • Use of Medicines
    • Value-Based Pricing
    • Vaccine Research
    • Economics of Innovation
    • Measuring and Valuing Outcomes
    • Policy, Organisation and Incentives in Health Systems
    • Value, Affordability and Decision Making
    • News
    • Events
    • Insights
    • Bulletin
    • Education Hub
    • OHE Graduate School
    • EVIA Programme
    • IRA Programme
    • The Prize Fund
    • 2022 Prize Fund
  • Events
  • About Us
  • OHE Experts
  • Contact Us
Newsletter SignupSubscribe
Back
  • News
11 min read 22nd September 2017

An Insurance Framework for Funding New Antibiotics

A new paper sets out an insurance model as part of a global solution to incentivise R&D for new antibiotics to tackle multi-drug resistance. It offers (i) a reasonable return on R&D; (ii) risk mitigation for payers, providers and manufacturers,…

Share:
  •  Twitter
  •  LinkedIn
  •  Facebook
  • has-icon Email

A new paper sets out an insurance model as part of a global solution to incentivise R&D for new antibiotics to tackle multi-drug resistance. It offers (i) a reasonable return on R&D; (ii) risk mitigation for payers, providers and manufacturers, (iii) stewardship by delinking revenues from volume of use, and (iv) conservation of antibiotic effectiveness by ensuring the continued availability of new antibiotics in the long-term.

A new paper entitled “Time for a Change in How New Antibiotics are Reimbursed: Development of an Insurance Framework for Funding New Antibiotics based on a Policy of Risk Mitigation” has been published online in Health Policy

OHE Director Adrian Towse and OHE Visiting Fellow Jorge Mestre-Ferrandiz are co-authors along with Chris Hoyle, Jonathan Goodall, Mark Hirsch, and John Rex. 

Healthcare systems depend on the availability of new antibiotics. However, there is a lack of treatments for infections caused by multidrug resistant (MDR) pathogens and a weak development pipeline of new therapies. One core challenge to the development of new antibiotics targeting MDR pathogens is that expected revenues are insufficient to drive long-term investment.

In the USA and Europe, financial incentives have focussed on supporting R&D through “push” incentives, reducing regulatory burden, and extending market exclusivity. The authors use resistance data to estimate global revenues, comparing them with estimated R&D costs for developing a new antibiotic. The results demonstrate that the combined effects of current incentives are unlikely to rekindle investment in antibiotics. This is because the build of resistance is gradual, leading to the greatest use of the product being after 10 years, when the patent has expired. Only a catastrophic acceleration of the build-up of resistance, could give the company enough sales to cover costs.

The paper analyses two supplemental approaches: (i) a premium price model and (ii) an insurance model.

A premium price model is familiar and readily implemented but the required price and local budget impact are both highly uncertain and sensitive to cross-sectional and longitudinal variation in prevalence of antibiotic resistance. It is also not aligned with the development of good stewardship.

Their analysis shows that an insurance model delivering risk mitigation for payers, providers and manufacturers would provide an incentive to drive investment in the development of new antibiotics while also facilitating antibiotic conservation. Health systems pay a flat annual fee plus a price for each unit of antibiotic used. The modeling suggests that annual total payments of $260m for each of 10 years (a total of $2.6bn) would generate an eNPV of $100m.

An insurance model may therefore prove to be part of a global solution. It is a partial de-linkage model that is consistent with recent global initiatives. It offers (i) a reasonable return to the manufacturer; (ii) risk mitigation for payers, providers and manufacturers, (iii) stewardship by delinking revenues from volume of use, and (iv) conservation of antibiotic effectiveness by ensuring the continued availability of new antibiotics in the long-term.

The authors suggest significant efforts should be made to test the insurance model as one route to stimulate investment in novel antibiotics.

The full article is available here [open access]. 

  • Antimicrobial Resistance (AMR)
  • Economics of Innovation
  • External Publications

Related News

NGS report_AdobeStock_406823942_landscape
  • News
  • July 2023

NGS testing for lung cancer across Europe still limited, despite clear case for adoption

Read more
Prize event
  • News
  • January 2023

Professor Aidan Hollis wins first £40,000 OHE Policy Innovation Prize

Read more
  • News
  • October 2020

Opportunities to Increase Efficiency in Healthcare

Read more
  • News
  • September 2020

Establishing a Reasonable Price for an Orphan Drug

Read more
footer_ohe_logo

Leading intellectual authority on global health economics

Sign Up for OHE Insights, Events & News Bulletin

Newsletter SignupStart Sign Up

Research & Publications

News & Insights

Innovation Policy Prize

Education

Events

About Us

OHE Experts

Contact Us

Sign Up for OHE Insights, Events & News Bulletin

Newsletter SignupStart Sign Up

The Office of Health Economics (OHE) is a company limited by guarantee registered in England and Wales (registered number 09848965) and its registered office is at 2nd Floor Goldings House, Hay’s Galleria, 2 Hay’s Lane, London, SE1 2HB.

Terms & Conditions

Privacy Policy

Cookies Policy

© 2023 Website Design

An error has occurred, please try again later.An error has occurred, please try again later.

We are using cookies to give you the best experience on our website.

You can find out more about which cookies we are using or switch them off in .

 Twitter
 Facebook
 LinkedIn
 Copy
 Email
Powered by  GDPR Cookie Compliance
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.

3rd Party Cookies

This website uses Google Analytics to collect anonymous information such as the number of visitors to the site, and the most popular pages.

Keeping this cookie enabled helps us to improve our website.

Please enable Strictly Necessary Cookies first so that we can save your preferences!