Hearings on new business models for antibiotics

I testify on Friday Sept 19 at the House Energy & Commerce Committee hearing, part of the ongoing series 21st Century Cures. I call for dramatic changes in how we create, use and pay for antibiotics.

As we seen before here, the antibiotic business model is broken. In a recent study undertaken by the Eastern Research Group for HHS/FDA, none of the six antibacterial targets yielded an expected net present value even close to the $100 million benchmark (previous TIE coverage here, with charts). In all six, the 90% confidence interval included negative NPVs. Few businesses will commit millions to a long-term R&D program with so little upside potential. This stands in stark contrast to the remarkable social value of antibiotics, even when you limit that calculation to quite direct effects (you don’t die). More expansive definitions would include the things that antibiotics make possible, like surgery and chemotherapy (Ramanan Laxminarayan is working on those numbers).

If the business model is broken, how do fix it? Download testimony here; download ppt here.


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