Antibiotic Reimbursement in a Model Delinked from Sales: A Benchmark-Based Worldwide Approach

6 Pages Posted: 27 Mar 2016 Last revised: 4 May 2016

See all articles by John Rex

John Rex

Independent

Kevin Outterson

Boston University School of Law

Date Written: March 22, 2016

Abstract

Despite the life-saving ability of antibiotics and their importance as a key enabler of all of modern health care, their effectiveness is now threatened by a rising tide of resistance. Unfortunately, the antibiotic pipeline does not match health needs because of challenges in discovery and development, as well as the poor economics of antibiotics.

Discovery and development are being addressed by a range of public-private partnerships; however, correcting the poor economics of antibiotics will need an overhaul of the present business model on a worldwide scale. Discussions are now converging on delinking reward from antibiotic sales through prizes, milestone payments, or insurance-like models in which innovation is rewarded with a fixed series of payments of a predictable size. Rewarding all drugs with the same payments could create perverse incentives to produce drugs that provide the least possible innovation.

Thus, we propose a payment model using a graded array of benchmarked rewards designed to encourage the development of antibiotics with the greatest societal value, together with appropriate worldwide access to antibiotics to maximise human health.

Keywords: antibiotic resistance, patents, intellectual property, health law, pandemics

JEL Classification: I12, I18, I19, K32, K39

Suggested Citation

Rex, John and Outterson, Kevin, Antibiotic Reimbursement in a Model Delinked from Sales: A Benchmark-Based Worldwide Approach (March 22, 2016). Lancet Infect Dis 2016; 16: 500-505; Boston Univ. School of Law, Public Law Research Paper No. 16-14. Available at SSRN: https://ssrn.com/abstract=2755033 or http://dx.doi.org/10.2139/ssrn.2755033

John Rex

Independent ( email )

No Address Available

Kevin Outterson (Contact Author)

Boston University School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States

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