Evidence-Based Immunology and Infectious Disease

The Economics of Resistant Pathogens and Antibiotic Innovation | Page 3

Published Online: April 23, 2014
Michael R. McKellar, BA; Michael E. Chernew, PhD; and A. Mark Fendrick, MD
In 2012, Optimer Pharmaceuticals Inc obtained approval for one of its antibiotics (Dificid) to be covered under NTAP. The designation was renewed in 2013. Together, these actions suggest that other antibiotic manufacturers may be able to receive the same add-on payment. Other federal programs could work in a similar way. For example, new antibiotics could be excluded from 340B pricing. The 340B Drug Discount Program requires drug manufacturers to provide outpatient drugs to certain health facilities, such as critical access hospitals, at significantly reduced prices. Excluding novel antibiotics from this requirement would decrease the price pressure on manufacturers and create more economic incentive for potential developers that hope to see a

promising return on investment.


There is no magic bullet to guarantee innovation in antibiotics development. It is difficult to determine whether R&D incentives or reducing the costs of bringing new antibiotics through expedited FDA review will be sufficient. Likely, the most effective method would be to simply allow higher prices. While this could increase the total costs to payers, a strategy of limited use at a higher price could increase the value generated by the healthcare system. Moreover, an increase in price must be coupled with controls to protect against overutilization, which could exacerbate problems of resistance.

Simultaneously, strategies to reduce underutilization, which could lead to adverse health outcomes for patients, will be important also. Quality measures that capture both overuse and underuse will be necessary to promote the optimal utilization of these highly valuable medications. The ultimate policy goal is to ensure that antibiotics are both used appropriately, with the right patients receiving the right medication at the right time, and that the world has a steady stream of future antibiotics that effectively treat the resistant organisms that will inevitably emerge.

Author Affiliations: Harvard Medical School Department of Health Care Policy, Boston, MA (MRM, MEC); University of Michigan, Ann Arbor, MI (AMF).

Source of Funding: Funding for this work was provided by Cubist Pharmaceuticals. Author Disclosures: The authors (MRM, MEC, AMF) report receiving payment from Cubist for their work on this article.

Authorship Information: Concept and design (MRM, MEC, AMF); acquisition of data (MEC); analysis and interpretation of data (MEC, AMF); drafting of the manuscript (MRM, AMF); critical revision of the manuscript for important intellectual content (MRM, MEC).

Address correspondence to: Michael R. McKellar, BA, Harvard Medical School, Department of Health Care Policy, 180 Longwood Ave, Boston, MA 02115. E-mail: mckellar@hcp.med.harvard.edu.

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