The Economics of Antimicrobial Development

John Mohr, PharmD, president and founder of Medical Affairs Strategic Solutions, LLC, explains the economics of antimicrobial development.

Interview Transcript (slightly modified for readability)

“I think it’s important to understand how the economics of antimicrobials work in the pharmaceutical industry. When a drug is studied, money is invested in order to develop that drug; when the drug is approved, then the drug is used and a return on that investment is realized by the company. The revenue, or sales, is a simple economic equation of the price which is charged [is multiplied] by the volume which is used. A model that rewards for a high-volume usage in the area of anti-infectives with a lower price is counter-intuitive to antimicrobial stewardship, because the more we use [them], the less effective they’re going to be.

We have to develop a model of a lower volume, and that may have to be offset by a higher price; however, we don’t expect the volume to be used high, [because] with a higher-priced drug you expect a lower volume; that will account for over-spending on these drugs.”