Antibiotic market failures

Megan McArdle’s new article on antibiotic resistance was published today in The Atlantic (Resistance is Futile). She correctly identifies the problem as a market failure:

Antibiotics are an exhaustible resource. We should be treating them like an oil field, or an endangered species. Instead, we handle them like consumer electronics. The patent system is designed to promote human invention, not conserve what has already been discovered.

She also highlights the Medicare reimbursement problem with infection control:  it is a cost center, not a profit center, and therefor doesn’t get the attention it deserves:

In the meantime, we here in the United States can make a start. “There are a lot of good things hospitals could be doing for infection control,” Outterson says, “but there’s no Medicare billing code for this. They won’t pay a nickel for a hospital that’s extra careful with hand-washing, or uses more-expensive equipment that resists infections.” While we wait for global action, we can develop better guidelines, change Medicare and Medicaid reimbursements, and start building stronger multilateral institutions. We can also start the policy debate over more-radical action, like changing the patent system and revisiting the role of government in the marketplace.

I’m a persistent critic of how badly many media outlets report on health, especially complex issues of science and law, but Megan gets it right. I’ve been quoted in many excellent publications over the years, but The Atlantic was the first I encountered to use a rigorous fact-checking process. Quality is expensive, but it shows.

Prior TIE discussions of antibiotic market failures here.

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