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Systems, not pills: The options market for antibiotics seeks to rejuvenate the antibiotic pipeline

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  • Brogan, David M.
  • Mossialos, Elias

Abstract

Over the past decade, there has been a growing recognition of the increasing growth of antibiotic resistant bacteria and a relative decline in the production of novel antibacterial therapies. The combination of these two forces poses a potentially grave threat to global health, in both developed and developing countries. Current market forces do not provide appropriate incentives to stimulate new antibiotic development, thus we propose a new incentive mechanism: the Options Market for Antibiotics. This mechanism, modelled on the principle of financial call options, allows payers to buy the right, in early stages of development, to purchase antibiotics at a discounted price if and when they ever make it to market approval. This paper demonstrates the effect of such a model on the expected Net Present Value of a typical antibacterial project. As part of an integrated strategy to confront the impending antibiotic crisis, the Options Market for Antibiotics may effectively stimulate corporate and public investment into antibiotic research and development.

Suggested Citation

  • Brogan, David M. & Mossialos, Elias, 2016. "Systems, not pills: The options market for antibiotics seeks to rejuvenate the antibiotic pipeline," Social Science & Medicine, Elsevier, vol. 151(C), pages 167-172.
    • Handle: RePEc:eee:socmed:v:151:y:2016:i:c:p:167-172
    DOI: 10.1016/j.socscimed.2016.01.005
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    References listed on IDEAS

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    1. Jonathan Rushton & Jorge Pinto Ferreira & Katharina D. C. Stärk, 2014. "Antimicrobial Resistance: The Use of Antimicrobials in the Livestock Sector," OECD Food, Agriculture and Fisheries Papers 68, OECD Publishing.
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    Cited by:

    1. Forman, Rebecca & Shah, Soleil & Jeurissen, Patrick & Jit, Mark & Mossialos, Elias, 2021. "COVID-19 vaccine challenges: What have we learned so far and what remains to be done?," Health Policy, Elsevier, vol. 125(5), pages 553-567.

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