In economics, antimicrobial resistance has been considered to be a negative externality associated with the use of antibiotics. Externalities occur when individuals engage in production or consumption activities that affect others but none pay or receive compensation for those effects (Begg et al. 2020). This implies that the current consumers of the antibiotics do not bear the full cost, but it is rather borne by society as a whole through the reduction in the effectiveness of the antibiotics for all (Coast et al. 1996; Laxminarayan and Brown, 2001). In health care, economic evaluation is used to inform decisions related to the allocation of scarce resources by comparing alternative courses of action in terms of their costs and benefits (Drummond et al. 2015). However, not many economic evaluation studies account for the cost of antimicrobial resistance due to the following reasons. First, some may consider the cost to be too small due to uncertainty and time preference. Second, there are difficulties associated with estimating the cost of antibiotic resistance. Third, there may not be any accurate estimates for the cost of antibiotic resistance (Coast et al. 1996; Smith and Coast, 2013).
This case study assesses the impact of accounting for the cost of antimicrobial resistance by conducting an economic evaluation alongside a randomised controlled trial which was aimed at assessing the effectiveness of amoxicillin in patients with lower respiratory tract infections (Little et al. 2013). The economic evaluation was conducted to estimate the cost-effectiveness of amoxicillin compared to placebo following guidance from the National Institute for Health and Care Excellence (NICE) reference case. (Oppong et al. 2016; NICE, 2013).
The approach to assessing the cost of antimicrobial resistance was as follows. First, the threshold cost of antimicrobial resistance that would change the decision as to whether amoxicillin is cost-effective or not, based on the NICE cost-effectiveness threshold* of £20,000 to £30,000 (€24,655 to €36,982) per quality adjusted life year (QALY)** gained, was estimated (NICE, 2013). Second, possible values for the cost of antibiotic resistance were obtained. A study estimated the total cost of antimicrobial resistance to be $100 trillion over a 35-year period (O’Neill, 2014), which is equivalent to $2.8 trillion annually. Third, estimates of the annual number of prescriptions were obtained; a study estimated this at 7.3 billion globally (Van Boeckel et al., 2014). To estimate the annual cost per prescription, the assumption that antibiotic prescribing is the main cause of antimicrobial resistance was made; then, the cost of antimicrobial resistance was then divided by the annual number of prescriptions to obtain a cost per antibiotic prescription. The resulting costs were then added to the trial cost for each patient who received amoxicillin as well as those who had an antibiotic prescription, irrespective of whether they were randomised to receive amoxicillin or placebo.
*The cost-effectiveness threshold is the maximum amount a decision-maker is willing to pay for a unit of health outcome. In the UK, The National Institute for Health and Care Excellence (NICE) uses a threshold of between £20,000 and £30,000 per Quality Adjusted Life Year (QALY). QALY is a widely used measure of health that combines length and quality of life to gauge whether an intervention is cost-effective or not.
**Quality Adjusted Life Years (QALYs): This is a measure of the state of health of a person or group in which the benefits, in terms of length of life, are adjusted to reflect the quality of life. One quality-adjusted life year (QALY) is equal to 1 year of life in perfect health.
Without the inclusion of the cost of antibiotic resistance, the cost and QALY difference between amoxicillin and placebo groups was €3.04 (£2.42) and 0.00037 respectively, and amoxicillin was considered cost-effective with the resulting incremental cost-effectiveness ratio*** of €8,216 (£6,540) per QALY gained, which is below the threshold of £20,000 to £30,000 (€24,655 to €36,982) per QALY gained. The threshold for the cost of antimicrobial resistance was estimated at €6.08 (£4.98) for £20 000 per QALY threshold, and €10.64 (£8.68) for £30 000 per QALY. With the inclusion of the cost of antimicrobial resistance, the difference in cost and QALYs between amoxicillin and placebo groups was €269.04 (£218.25) and and 0.00037 respectively. The resulting incremental cost-effectiveness ratio was €727 135 (£589 856) per QALY gained which is above the threshold of £20,000 to £30,000 (€24,655 to €36,982) per QALY gained. This suggests that amoxicillin is no longer cost-effective when the costs associated with antimicrobial resistance were accounted for.
Economists consider antimicrobial resistance as a negative externality and have pointed out that the failure to incorporate antimicrobial resistance as a cost in economic evaluation studies may result in bias. This case study highlights this issue by explicitly accounting for the cost of antimicrobial resistance in the context of an economic evaluation alongside a randomised controlled trial comparing amoxicillin with placebo in patients with acute cough/lower respiratory tract infections. The implication of the study is that economic evaluations of interventions aimed at reducing antibiotic prescribing may result in misleading conclusions if antibiotic resistance is not accounted for. It is therefore recommended that interventions where antibiotics are used should include the cost of antimicrobial resistance. However, there is the need for further research into better methods for estimating the true cost of antimicrobial resistance.
***The incremental cost-effectiveness ratio is the cost per unit of benefit (The unit of benefit used in this study is the QALY). It is obtained by dividing the difference in costs by the difference in benefits (QALYs) i.e. (Cost amoxicillin – cost placebo/ QALY amoxicillin – QALY placebo)
The case study presented here has been published in the following article: Oppong et al. (2016) Cost effectiveness of amoxicillin for lower respiratory tract infections in primary care: an economic evaluation accounting for the cost of antimicrobial resistance. British Journal of General Practice, 66(650), e633-e639.
Associate Professor, Health Economics Unit, University of Birmingham.