Models for valuing novel antibiotics and the UK “Netflix” model for purchasing antibiotics

Activity: Talk or presentation typesInvited talk


The existing business models for purchasing antibiotics are intrinsically flawed, pitting pharmaceutical companies’ incentives against antibiotics stewardship and failing to promote research and development in novel drugs. Only two novel classes of antibiotics have been introduced since the 1970s, and companies that have developed novel drugs such as Achageon have filed for bankruptcy. A number of groups (e.g., DRIVE-AB and EEPRU) have discussed how the value of antibiotics differ from other health technologies and have developed conceptual frameworks for valuing them. However, no clear methods and processes that could be used by a health technology assessment body exist.

We explore two models for valuing antibiotics. First, we explore the option value of preserving an antibiotic for an extreme event. We consider an example of secondary bacterial infections during pandemic influenza. Second, we present a “delinked” model —removing the link between reimbursement for use and sales—that the UK government is testing. We study these models to understand how to value antibiotics, what the structure of the fixed and volume-based payments in the delinked (“Netflix”) model should look like, and (time-permitting) how we may be able to use expert judgment to support the model and the HTA process.
PeriodFeb 2020
Held atMathematics And Statistics