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

Brogan, David M. and Mossialos, Elias (2016) Systems, not pills: the options market for antibiotics seeks to rejuvenate the antibiotic pipeline. Social Science and Medicine, 151. pp. 167-172. ISSN 0277-9536

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Identification Number: 10.1016/j.socscimed.2016.01.005

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

Item Type: Article
Official URL: https://www.sciencedirect.com/science/journal/0277...
Additional Information: © 2016 Elsevier
Subjects: R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine
Sets: Research centres and groups > LSE Health
Date Deposited: 12 Jan 2018 15:38
Last Modified: 12 Jan 2018 15:38
URI: http://eprints.lse.ac.uk/id/eprint/86432

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