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Researchers Estimate Costs of Exclusivity Extensions to Encourage Antibiotic Development

Posted 21 October 2019 | By Zachary Brennan 

Researchers Estimate Costs of Exclusivity Extensions to Encourage Antibiotic Development

A bill introduced last year in the US House of Representatives that would reward manufacturers of certain novel antibiotics with transferrable market exclusivity vouchers could end up costing public and private payers $4.5 billion over 10 years, Harvard Medical School researchers said in an article published Sunday.

The economic impact of the bill, which was introduced by Rep. John Shimkus (R-IL), who is not seeking re-election, and co-sponsored by two Democrats, was calculated by identifying antimicrobial drugs approved by the US Food and Drug Administration (FDA) from 2007 to 2016 that would likely have qualified for an exclusivity voucher and matching each drug to the highest-revenue fast-track drug facing generic entry within four years after the antibiotic was approved.

While factoring in a 75% spending reduction after generic competition, the researchers found the median excess spending associated with 12 months of additional exclusivity was $187 million, or $4.5 billion over 10 years.

The authors note that similar bills with such incentives may resurface in the future, explaining that as with previous studies, exclusivity extensions “offered high returns to manufacturers, particularly those of blockbuster drugs.” And although the financial reward “varies widely,” it “is not related to a drug’s societal value or innovativeness.”

Congress, meanwhile, has already passed two laws to create an expedited approval pathway and reduce the size of clinical trials for certain antibiotics, although “neither of these regulatory changes has yet led to a measurable impact on drug development, and large pharmaceutical manufacturers and private investors continue to face challenges in the way antibiotics are reimbursed in the US market, leading policymakers to argue that additional financial ‘pull’ or ‘push’ incentives are needed,” the authors note.

Moving forward, the authors expressed caution with regard to using exclusivity as a way to encourage new antibiotic development, noting such efforts “may lead to billions of dollars in additional societal spending on prescription drugs.”

Oxford University Press for the Infectious Diseases Society of America

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