Modeling the value of an effective antibiotic — Megiddo et al.

Dear All:

I have previously written about the challenge of applying health technology assessment (HTA) to estimate the monetary value of an effective antibiotic:

  • To my knowledge, the most detailed attempt to estimate the value of antibiotic was in 2014 by Sertkaya et al. 
  • In that analysis, the value that the developer might receive through sales ranged from -$5 to +$40m across six standard indications.
  • On the other hand, the value to society ranged from $0.5b to $12.2b: $0.5b for a new drug for acute bacterial otitis media (ABOM), $9.4b for a new drug for community-acquired bacterial pneumonia (CABP), and $12.2b for a new drug for hospital- or ventilator-associated bacterial pneumonia (HABP/VABP).
  • In Sertkaya’s analysis, the value calculation focused on the societal value to the United States and combined the ideas of Value of a Statistical Life Year (VSLY, an estimate of of how much people are willing to pay to live a certain amount longer) with estimates of reduced Quality-Adjusted Life Years (QALYs) based on both mortality (QALYs go to zero) and morbidity (QALY is reduced during illness).

The striking thing about Sertkaya’s paper was how it showed that the value to society wildly exceeded the return to the developer. Taking a very different approach to estimating societal value (but coming to a similar conclusion as you’ll see), a new DRIVE-AB-sponsored analysis by Megiddo et al. (link and full cite below my signature) approaches the problem by estimating the value of a new oral antibiotic that could potentially manage the secondary S. aureus infections that are often the actual cause of death following an influenza pandemic. The value is estimated by comparing societal costs in two scenarios:

  • Scenario A: A new oral antibiotic is invented and then held completely in reserve until the moment of a pandemic. Because it is not being used, resistance does not develop.
  • Scenario B: A new oral antibiotic is inventedimmediately released for use, and society benefits promptly from its availability. But, resistance does begin to develop.

In both scenarios, it is assumed that at the point of a pandemic the ability to provide an IV antibiotic (and a hospital bed) for these secondary infections is overwhelmed by the sudden case load. In Scenario A, the new oral antibiotic is released and is often able to allow someone to be treated by mouth and ex-hospital. In Scenario B, the oral antibiotic is already available, but its use pre-pandemic has led to the inevitable induction of resistance and thus its utility during the pandemic is reduced.

Based on preparedness estimates from the UK Department of Health, the authors then apply this idea specifically to the population of the UK. In their base case analysis, they found that Scenario A (hold in reserve) has a value to the UK of $2-4b. Sensitivity analyses show how the value can go to zero (pandemics are really rare) or climb enormously (pandemics are common or more severe).

Keeping in mind that this is for the UK (population 66m) … if scaled to the US (~325m) or the EU (~515m), the value goes up 5- to 8-fold. You can carry on with the math from there, but the similarity Megiddo’s estimate scaled to the US population ($10-20b) with the estimate by Sertkaya et al. is apparent.

As George Box said, “All models are wrong, some are useful” and this paper by Megiddo et al. is obviously very useful. Contrasting immediate vs. delayed value is an innovative way to get at the question of having vs. not having an antibiotic. And the focus on just one value of the antibiotic (rather than trying to incorporate the value of use for infections other than an influenza pandemic, possible use for multiple pandemics, etc.) helps counter concerns about the robustness of the underlying assumptions in the model. In short, antibiotics have significant social value that is not tapped by a sales-based (volume-based) approach to income for the developer.

And as the authors note, a positive value in their model does not mean that a developer will perceive an adequate incentive to invest in a new antibiotic on the off-chance that is might be needed in the future. Rather, we as a society must immediately implement Pull incentives (more reading choices are here). The work of DRIVE-AB and others has clearly laid out the choices and we now need action at the government level. It is thus exciting to see the UK commit to finding Pull models and to know that legislative efforts are underway in the US to the same end.

Onward! All best wishes, –jr

John H. Rex, MD | Chief Medical Officer, F2G Ltd. | Expert-in-Residence, Wellcome Trust. Follow me on Twitter: @JohnRex_NewAbx. See past newsletters and subscribe for the future:

Full cite: Megiddo, I., D. Drabik, T. Bedford, A. Morton, J. Wesseler and R. Laxminarayan. “Investing in antibiotics to alleviate future catastrophic outcomes: What is the value of having an effective antibiotic to mitigate pandemic influenza?” Health Economics 11 Feb 2019 doi: 10.1002/hec.3867 (go here for the published paper)

Upcoming meetings of interest to the AMR community:

  • 21 Feb 2019 (everywhere, 17:00-18:30 CET): GARDP-sponsored webinar entitled “NIAID Resources to Facilitate Discovery & Development of Anti-Infectives.” Register here.
  • 5-6 Mar 2019 (Washington): NIAID-sponsored workshop: Vaccine strategies for endemic fungal pathogens. Register here.
  • 8 Mar 2019 (everywhere): Deadline to respond to NIAID’s request for comments as its next 5-year strategic plan is produced. Go here for more.
  • 14-15 Mar 2019 (Berlin): BEAM-, Novo REPAIR-, CARB-X-, DZIF-, ND4BB-ENABLE-sponsored (among a long list!) Berlin Conference on Novel Antimicrobials and AMR Diagnostics. Details here. Poster submissions are being accepted through 9 Jan (details here).
  • 18 Mar 2019 (everywhere): Deadline for responding to the WHO call for data on preclinical antibiotic programs. Details here.
  • 21-22 Mar 2019 (Birmingham, UK): BSAC Spring Conference.
  • 26 Mar 2019 (London, UK): Sponsored by The Economist, a 1-day symposium entitled “Antimicrobial Resistance: Preventing an antibiotic apocalypse.” Register here.
  • 28 Mar 2019 (everywhere, 4-5.30p GMT): GARDP-sponsored webinar entitled “Clinical development for non-developers Part 3: Antibacterial Drug Enhancer Combinations and Non-traditional Products.” Register here.
  • 11-12 Apr 2019 (Amsterdam): ESGAPSWAB (European Study Group for Antibiotic Policies – Stichting Werkgroep Antibioticabeleid) Technical Workshop on measuring quantity and quality of antimicrobial use. Register here
  • 13-16 Apr 2019 (Amsterdam): Annual ECCMID meeting
  • 16-18 Apr 2019 (Utrecht): ICOHAR, International Conference on One Health Antimicrobial Resistance. Organized by the ESCMID Study Group for Veterinary Microbiology (ESGVM).
  • 24-26 Apr 2019 (Boston): Annual SHEA (Soc. for Hospital Epidemiology of America) Spring meeting
  • 6-11 May 2019 (Ljubljana, Slovenia): 37th Annual Meeting of the European Society for Paediatric Infectious Diseases (ESPID). Details here.
  • 3-6 Jun 2019 (Philadelphia): Annual BIO meeting
  • 10-11 June 2019 (Research Triangle Park, NC): AMR Action Summit on R&D and Commercialization. Sponsors include the British-American Business Council, the UK Gov’t, CARB-X, the NC Biotechnology Center, and others. Details here.
  • 20-24 June 2019 (San Francisco): Annual ASM Microbe meeting.
  • [Mark your calendar now!] 3-6 Sep 2019 (Boston). Annual ASM-ESCMID Conference on Antibiotic Development. The Bootcamp series will continue on 3 Sep with the main meeting on 4-6 Sep. Mark your calendar now and check back here for details.
  • 6-8 Sep 2019 (Bilbao, Spain): 5th ESCMID conference on Vaccines. Check back here for details.
  • 2-6 Oct 2019 (Washington, DC): IDSA’s annual IDWeek meeting.
  • 19-27 Oct 2019 (Annecy, France): International Course on Antibiotics and Resistance (ICARe) – A soup-to-nuts intensive residential training program on all things AMR, especially R&D for new antibiotics. See this link for details.
  • [Mark your calendar now!] 1-6 Mar 2020 (Il Ciocco, Tuscany, Italy): GRC on Antibacterial Discovery and Development: “Now is the time to re-boot antibiotic R&D before it’s too little, too late.” Not yet online, but the date is firm. Will share a link when it becomes available.


Share on twitter
Share on facebook
Share on linkedin
Share on email
Share on whatsapp
Share on reddit

WAAW: Impact investing, podcasts, reports, and logos!

Dear All, Today we have a bit of a potpourri for WAAW (World Antibiotic Awareness Week). Lots of good stuff… In the new meetings category, we have two meetings for investors seeking social impact: 23 Nov 2020 (online, 6-7p CET): Webinar sponsored by Access to Medicine Foundation (ATM) entitled “The Materiality of Superbugs: Investor Action

COVID-19 and the Long-Term Trajectory of AMR Efforts: Wellcome Trust Deep Dive

Dear All (Wonkish alert! Coffee-up!), Today we have something special: A deep-dive into the future trajectory of AMR-related work developed by Wellcome Trust. The newly released report is here and there is a webinar discussing the report on Wednesday of this week (1500-16:00 GMT on 18 Nov 2020, go here to register). The back story

Global AMR Hub (Berlin) seeks Scientific Program Officer

Dear All, The G20’s Global AMR R&D Hub (, see below my signature for a brief history of the Hub) has a job opening from 1 Feb 2021 for a Scientific Program Officer. Here’s a brief description of the role:  Contributes expert knowledge on AMR R&D to the further development of the Dynamic Dashboard and to

Scroll to Top