Document Type

Article

Publication Date

4-15-2014

ISSN

N/A

Language

en-US

Abstract

Antibacterial resistance is a growing global problem. According to the most recent statistics from the Centers for Disease Control and Prevention (CDC), at least 2 million people acquire serious infections with bacteria that are resistant to one or more of antibacterial drugs designed to treat those infections in the United States alone. Of these, approximately 23,000 die as a result of drug-resistant infections. Even though estimates vary widely, the economic cost of antibacterial resistance in the United States could be as high as $20 billion and $35 billion a year in excess direct healthcare costs and lost productivity costs, respectively (U.S. Centers for Disease Control and Prevention, 2013). Despite the potential of new antibacterial products to reduce the social burden associated with resistant infections, some of the large companies have been exiting the markets for antibacterial drugs and vaccines in recent years and have also failed to respond to the possible social value of opportunities in production of rapid diagnostic products. These market exits have been driven by the most basic of reasons: insufficient return to capital invested in development of these products. Consequently, governments across the globe are looking to identify ways to stimulate the development of antibacterial products. This study, conducted by Eastern Research Group, Inc. (ERG) under contract to the U.S. Department of Health and Human Services (HHS), Office of the Assistant Secretary for Planning and Evaluation (ASPE) and partly funded by FDA, develops an analytical decision-tree model framework that can be used to assess the impacts of different possible market incentives on the private and social returns to product development of new antibacterial products (in contrast to those already under development). Using the model developed, we evaluate the private and social returns associated with the following types of antibacterial products for a hypothetical developer at the beginning of pre-clinical research phase:

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