Duke-Margolis proposes value-based pricing model for antimicrobials

The Duke-Margolis Center for Health Policy released a paper detailing its Priority Antimicrobial Value and Entry (PAVE) Award, which proposes value-based payment reform in U.S. antimicrobial drug policy. According to the center, the standard fee-for-service healthcare model is a poor fit for antimicrobials, as sales volume is the main driver of return on investment (ROI) -- leading to drug overuse and antimicrobial resistance. The PAVE proposal stems from a newly formed consortium (see BioCentury Extra, May 15).

PAVE would provide developers of high priority antimicrobials a publicly financed market entry reward (MER) following approval. The MER, which is not linked to sales volume, would pay out over five or six years, including the largest component in the first year, and could be funded with a mix of taxes, member fees or the sale of exclusivity vouchers. In a conference call, center director and former FDA commissioner Mark McClellan said a MER could total around $1 billion...