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Modelling the health economic value of innovative new antibiotics
- ARMoR
- Jul 12
- 4 min read
Updated: Jul 14
Authors: Tim Laurence, David McKinney, Mo Putera
Pull incentives for new antibiotics are premised on strong public health value and a reasonable return on investment, yet for many new antibiotics that value is uncertain. What is needed, and what has not been supplied, is a clear articulation of the health and economic impact an innovative antibiotic could deliver, and the pricing or subscription payment that impact could justify. Many antibiotics receiving regulatory approval in recent years are incremental improvements on existing products, adding limited public health value (Farha, 2025), and policymakers have accordingly suggested that incentives should apply only to antibiotics showing clear benefit over existing options (Årdal et al., 2021). Truly innovative products capable of treating the most serious multi-drug resistant pathogens are increasingly present in the early-stage pipeline. But they carry higher risk, and the case for rewarding them rests on a value that has not been credibly quantified. Without a defensible estimate of what an innovative antibiotic is worth in health and economic terms, policymakers cannot say which products merit a premium, and cannot defend its size once they set it.
We developed a first-of-its-kind tool to do this, enabling rapid assessment of novel antibiotics applicable to any country in the world and across various prescribing scenarios based on target product profiles (TPPs). We used this tool to model two hypothetical products targeting Pseudomonas aeruginosa LRI (Lower Respiratory Infections) and Enterobacterales LRI respectively, both reflecting TPPs developed by CARB-X, which we believe represent ambitious but realistic development targets (CARB-X, 2025). We selected Denmark, Greece, and India for analysis, representing varied economic and epidemiological contexts. We model these products across three prescribing scenarios to understand the impact of targeting on cost-effectiveness:
Perfect targeting: every patient with the relevant set of infectious syndromes and resistant pathogens receives the product.
Empirical therapy: adjusts for treatment given without confirmation, assuming patients without the relevant syndromes and pathogens receive no benefit over standard of care (SoC).
Microbiological confirmation: only a proportion of patients confirmed microbiologically to require the product receive it.
1) Epidemiological impact
We find that both innovative products provide substantial health gains in all countries analysed, as set out in table 1. For instance, under both perfect and empirical targeting prescribing scenarios, our tool estimates the Enterobacterales LRI-targeting antibiotic would avert 31 AMR-attributable deaths in Denmark, 7.5% of the entire annual burden of 407 deaths as estimated by IHME (2022 figures). We find that the impact of both TPP specifications is higher for Greece and India. We also find that if we assume the antibiotics are distributed only to patients with microbiologically confirmed cases, the estimated benefit drops markedly, particularly for India where the epidemiological impact of both products would be 95% lower.
Table 1 | Overall impact on AMR attributable deaths annually
Country | Targeting scenario | Deaths averted (% AMR attributable) PA LRI TPP | Deaths averted (% AMR attributable) Enterobacterales LRI TPP |
Denmark | Perfect | 7 (1.7%) | 31 (7.5%) |
Greece | Perfect | 100 (4.9%) | 194 (9.6%) |
India | Perfect | 9,434 (3.5%) | 27,985 (10.5%) |
Denmark | Empirical | 7 (1.7%) | 31 (7.5%) |
Greece | Empirical | 100 (4.9%) | 194 (9.6%) |
India | Empirical | 9,434 (3.5%) | 27,985 (10.5%) |
Denmark | Microbiological | 3 (0.8%) | 15 (3.8%) |
Greece | Microbiological | 20 (1.0%) | 39 (1.9%) |
India | Microbiological | 472 (0.2%) | 1,399 (0.5%) |
2) Health economic impact
We also find that both model products would be cost-effective for Denmark and Greece under all prescribing scenarios, as set out in the table below. For instance, under the microbiological confirmation scenario, the Enterobacterales LRI-targeting antibiotic would dominate the standard of care in Denmark, as cost savings from reduced length of stay would exceed the incremental cost of the antibiotic, at an assumed USD 2,400 for a course of treatment. Similarly, under the empirical targeting scenario, the estimated incremental cost-effectiveness ratio (ICER) would be USD 5,949 per DALY averted, far below our assumed cost-effectiveness threshold for Denmark of USD 72,000 (Svensson et al., 2023).
Table 2 | Enterobacterales LRI antibiotic: initial cost-effectiveness assessment
Country | Targeting Scenario | Incremental Total Cost (USD millions) | Incremental Total DALYs | ICER (USD) |
Denmark | Perfect | -3.3 | -369 | Int. dominates count. |
Greece | Perfect | -2.6 | -2,163 | Int. dominates count. |
India | Perfect | 1,211.4 | -604,000 | 2,003 |
Denmark | Empirical | 2.2 | -369 | 5,949 |
Greece | Empirical | 28.9 | -2,163 | 13,378 |
India | Empirical | 5,325.4 | -604,000 | 8,805 |
Denmark | Microbiological | -1.5 | -184 | Int. dominates count. |
Greece | Microbiological | -0.4 | -433 | Int. dominates count. |
India | Microbiological | 61.5 | -30,241 | 2,034 |
3) Pricing and value analysis
Figures 1 and 2 show the Cost Saving Price and the Break Even Price that each novel product would justify under our different prescriber scenarios. This allows us to calculate the total value that each product would justify on a subscription/pull incentive basis, table 3.
Figure 1 | Pseudomonas aeruginosa LRI targeting antibiotic pricing
Figure 2 | Enterobacterales LRI targeting antibiotic pricing
Table 3 | Maximum justifiable subscription price under empirical therapy and microbiological targeting prescribing scenarios
Country | Targeting Scenario | PA LRI antibiotic (USD millions) | Enterobacterales LRI (USD millions) | Proposed “Fair share” contribution (USD millions) | Return on investment |
Denmark | Empirical | 8.9 | 38.9 | 2.8 | 5.6 |
Greece | Empirical | 47.1 | 88.5 | 1.5 | 11.5 |
India | Empirical | 546.8 | 1,747.3 | N/A* | N/A |
Denmark | Microbiological | 3.5 | 15.8 | 2.8 | 1.3 |
Greece | Microbiological | 9.2 | 17.3 | 1.5 | 6.1 |
India | Microbiological | 31.0 | 93.7 | N/A* | N/A |
*India is not typically expected to contribute to a globally sized pull incentive.
These results clearly support the growing body of evidence that new antibiotics meeting these TPPs would justify the creation of a subscription model sized in line with “fair share” principles, even in a low burden setting such as Denmark (Goh et al., 2025).
Next steps
The potential benefits of this tool reach beyond price and value analysis and as supporting evidence for pull incentives. By further building on our methodology and broadening the applicability to cover more TPPs and countries, it could support in key areas such as:
The creation of more evidence-based TPPs
Helping prioritisation between new antibiotics
Development of evidence-based access strategies
Creation of highly specific and relevant evidence for advocacy
We are currently actively engaging with potential design partners and are interested in exploring funding opportunities to allow us to carry out the next stage of this work. The result would be an accessible, highly trusted and user-friendly tool that can be used to provide key insights into the benefits of new antimicrobials.
Acknowledgements
We would like to thank the Novo Nordisk Foundation for funding and supporting this work. We thank Anthony McDonnell from the Centre for Global Development and colleagues from CARB-X for constructive input on this work ahead of publication.
