How Extending Patent Protection For Antibiotics Creates Perverse Incentives To Render Them Useless
from the monopolizing-ourselves-to-death dept
We take antibiotics and their ability to kill practically all bacteria for granted. But scientists are increasingly warning that we may be about to leave what might come to be seen as a golden age for anti-bacterial drugs, and enter a post-antibiotic era. As the World Health Organization’s Director-General said, quoted in an article on the Citizen Vox site:
“A post-antibiotic era means, in effect, an end to modern medicine as we know it. Things as common as strep throat or a child’s scratched knee could once again kill.”
The problem arises from natural selection. The more we use an antibiotic — especially if we use it carelessly, failing to complete the full course — the more we select for bacteria that are partially resistant to it. Over time, those bacteria thrive, displacing bacteria that are unable to withstand the antibiotic. Eventually, bacteria that are completely resistant to that particular drug are likely to evolve — a situation that can have dire consequences. For example, even five years ago, methicillin-resistant Staphylococcus Aureus (MRSA) was killing more people in the US annually than AIDS.
The obvious way to mitigate this problem is to reduce the use of antibiotics, saving them for truly life-threatening situations, and that’s what’s happening to a certain extent in Europe:
To preserve the effectiveness of antibiotics for human use, Europe banned feeding antibiotics to livestock for growth promotion in 2006. In Denmark, where such use of antibiotics had been phased out more than a decade ago, drug-resistant pathogens in livestock are down while industry output is up.
As the Citizen Vox article notes, a similar proposal to restrict the use of antibiotics has not gone very far in the US, partly because an alternative approach has found far more favor, for evident reasons:
the Generating Antibiotic Incentives Now, or GAIN, Act has piggybacked into the FDA bill reauthorizing user fees for drug approval. GAIN would provide five more years of monopoly protections for new antibiotics. Already receiving three to seven years of exclusivity, some antibiotics may receive up to 10 years of protection after market approval. This measure defies both the economics and biology of antibiotic resistance.
The reason for that comes down to the nature of patents. Since they are time-limited, their owners have a natural incentive to exploit them as fully as possible during their entire term, when they can charge elevated monopoly prices. For other kinds of patents, that might be regrettable from an economic viewpoint, but it’s hardly a matter of life or death. For antibiotics it’s more problematic.
The more holders of patents for antibiotics seek to maximize their profits by boosting production and selling them as widely as possible, the more antibiotic resistance is likely to develop — especially if they are given to livestock as well as humans. That growing resistance is a classic negative externality — it’s not something the pharma company needs to worry about, since the cost will come later and be borne by the general population in the form of increased medical expenses, longer stays in hospital, more serious infections and higher mortality rates.
Antibiotics are perhaps the clearest example of how the interests of patent holders are not only misaligned with those of the public, but are diametrically opposed to them in some cases. Although, in the short term, patents may encourage more antibiotics to be developed, in the long term they undermine their effectiveness. Even more than for drugs in general, antibiotics are an area where we need different kinds of incentives to stimulate development of new drugs — government-funded prizes, perhaps.