Key takeaways

  • The market for antibiotics is failing due to limited sales volumes, generic competition, and inadequate recognition of their value
  • A globally aligned, value-based, fully-delinked pull incentive is one possible solution
  • The incentive involves payers providing manufacturers with a subscription fee based on the value of the antibiotic, regardless of the volume used
  • This report brings together answers to some important remaining questions, such as the size of the incentive, which countries should contribute, and how to assign value to different antibiotics
  • International cooperation and agreement on these answers will be crucial for global implementation

Antibiotic Resistance is a major threat to global population health. Fighting it requires an active pipeline of effective products. However, the market for antibiotics is failing due to limited sales volumes, generic competition, and inadequate recognition of their value.

In this report, we describe the design of a globally aligned, value-based, fully-delinked pull incentive, where payers provide manufacturers with a pre-specified subscription fee based on the value of the antibiotic, regardless of the volume used. We also pose and provide answers to four crucial questions:

HOW LARGE SHOULD A GLOBAL INCENTIVE BE?

The best estimate for a 10-year ‘subscription’ type payment covering the entire development process and generating a large enough global incentive fully delinked from sales volumes is $4.2 billion (Outterson, 2021).

WHO PAYS?

At a minimum, the seven wealthiest nations (G7), based on their GDP. However, the burden for these countries would significantly be reduced if, for example, the twenty wealthiest nations and the European Union (G20 + EU) contributed.

WHAT FOR?

Antibiotics should be selected based on globally aligned criteria, including the unmet need and a target product profile (TPP). Following eligibility screening, the company and payer would enter into a contract guaranteeing the company a minimum subscription fee if the criteria and TPP are met.

HOW CAN VALUE BE REWARDED?

The system should include a value-based top-up that incentivises the development of higher-value products. The broader value of the antibiotic should be evaluated using the STEDI value framework (incl. Spectrum, Transmission, Enablement, Diversity, and Insurance value). Initially, the subscription fee for individual products could be set using a categorical, points-based scoring system. After five years, the aim should be a full population-level economic evaluation, linked to QALY, and incorporating an antibiotic’s STEDI value.

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