Incentives for new antibiotics: The Options Market for Antibiotics (OMA) model

David M. Brogan, Elias Mossialos

Research output: Contribution to journalArticlepeer-review

29 Scopus citations

Abstract

Background: Antimicrobial resistance is a growing threat resulting from the convergence of biological, economic and political pressures. Investment in research and development of new antimicrobials has suffered secondary to these pressures, leading to an emerging crisis in antibiotic resistance.Methods: Current policies to stimulate antibiotic development have proven inadequate to overcome market failures. Therefore innovative ideas utilizing market forces are necessary to stimulate new investment efforts. Employing the benefits of both the previously described Advanced Market Commitment and a refined Call Options for Vaccines model, we describe herein a novel incentive mechanism, the Options Market for Antibiotics.Results: This model applies the benefits of a financial call option to the investment in and purchase of new antibiotics. The goal of this new model is to provide an effective mechanism for early investment and risk sharing while maintaining a credible purchase commitment and incentives for companies to ultimately bring new antibiotics to market.Conclusions: We believe that the Options Market for Antibiotics (OMA) may help to overcome some of the traditional market failures associated with the development of new antibiotics. Additional work must be done to develop a more robust mathematical model to pave the way for practical implementation.

Original languageEnglish
Article number58
JournalGlobalization and Health
Volume9
Issue number1
DOIs
StatePublished - Nov 7 2013

Keywords

  • Antibiotic development
  • Antimicrobial resistance
  • Incentive mechanisms for new antibiotics
  • Options Market for Antibiotics

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