Analysis is estimating the appropriate size of global pull incentives
A new analysis published by Kevin Outterson in the Health Affairs journal is estimating the appropriate size of global pull incentives for antibacterial medicines.
Antibacterial medicines should be foundational for modern medicine—a key part of the infrastructure of contemporary practice. Recently, however, antibacterials have struggled commercially. Even with “push” incentives (grants paid before regulatory approval), antibacterials have failed on the market because revenues are tied to volume sold. There are policy initiatives under way in the United States and United Kingdom that explore paying for exceptional antibacterials with “pull” incentives (paid after regulatory approval) by delinking the payments from volume via other payment formats such as market entry rewards and subscriptions. This article discusses these initiatives but also proposes an expected net present value model for calculating the global incentives required to create a functional antibacterial market, exploring options such as antibacterial subscriptions, market entry rewards, push incentives, higher prices, and drug development through charitable efforts. The model estimates that current push incentives should be continued, but governments must also enact pull incentives that will add several billion dollars to the global revenue stream of a highly innovative antibacterial, reduced by any grants received supporting clinical development of that product. The amounts in the proposed Pioneering Antibiotic Subscriptions to End Upsurging Resistance (PASTEUR) Act of 2021 and a UK pilot program are well within the bounds of an effective antibacterial pull incentive.
Read full article here: https://www.healthaffairs.org/doi/10.1377/hlthaff.2021.00688
For a discussion of the article in one of John Rex’ newsletters, click here