• Cap and trade for antibiotics

    The following guest post is by Kevin Outterson, Associate Professor, Boston University School of Law and co-author of “Fighting Antibiotic Resistance: Marrying New Financial Incentives To Meeting Public Health Goals” (Health Affairs, 2010).

    Andrew Pollack had a good article in today’s NYT on antibiotic resistance.  Tyler Cowan has already linked to it with the provocative question of “cap and trade for antibiotics?”  The legal and economic literature has been discussing Pigovian taxes, tradable permits and economic incentives for antibiotics over the past few years (see, e.g., Extending the Cure, the London School of Economics, and the Center for Global Development).

    Cap and trade is impractical because we simply won’t allow antibiotics to be rationed according to willingness-to-pay.  Argue with me if you want.

    Everyone cites the usual scary stats on increasing resistance and declining new antibiotics coming to the market, but fail to note that most of the antibiotics approved in the “glory years” of the 1980s and 1990s were withdrawn from the market or discontinued.  We can’t rely on just quantity instead of quality.  We need better antibiotics, not just new molecules.

    The best part of Pollack’s article focuses on the need for conservation.  If antibiotics are potentially exhaustible resources, then we need to manage them for long-term social goals:

    Ramanan Laxminarayan, who directs the Extending the Cure project on antibiotic resistance at Resources for the Future, a policy organization, said the government should focus on conserving the effectiveness of existing antibiotics. That could be done by preventing unnecessary use in people and farm animals and requiring better infection control measures in hospitals.

    “There’s not a recognition yet that we should think about antibiotics as a natural resource and we should conserve them like we do fish,” Mr. Laxminarayan, an economist, said. Kevin Outterson, an associate professor of law at Boston University, said one way to encourage both new development and conservation would be to pay drug companies to develop new antibiotics but not to aggressively market them. Incentives, he said, “must be conditioned on the companies’ changing their behavior.”

    Simply giving the companies longer patents won’t do it, unless we change the incentives that promote over-marketing.  Aaron Kesselheim and I explored the conservations incentives question in Health Affairs (Sept 2010).  From the abstract:

    …We review a number of proposals intended to bolster drug development, including such financial incentives for pharmaceutical manufacturers as extending the effective patent life for new antibiotics. However, such strategies directly conflict with the clear need to reduce unnecessary antibiotic prescriptions and could actually increase prescription use. As an alternative, we recommend a two-prong,

    “integrated” strategy. This would increase reimbursement for the appropriate, evidence-based use of antibiotics that also met specific public health goals—such as reducing illness levels while limiting antibiotic resistance.

    What incentives would you suggest for antibiotics?

    • As a physician guilty of rapid deescalation (“doctor language” for moving to less broad & costly antibiotics where appropriate when bug identified), and also promulgating good prescribing habits to trainees, I wish to sleigh the very beast that will potentially save patients, ie, the innovation that will bring about better drugs through their increased utilization.

      I remember reading your piece with interest, and commiserating. It is a big production pipeline problem, and for a change, one I dont hold against industry. I thought your solutions were elegant and smart, but as always the devil is in the details, and I would want to hear practicality of workaround in a roundtable with stakeholders. Cant say what is best.

      I would also suggest something like this:

      Funding could come through a fund from hospitals, societies, foundations, philanthropy, Just another idea–pick a bug and rx properties and throw it out there. NASA does something similar as well.


    • The problem of antibiotic resistance comes almost completely from farm use of antibiotics. Once the farms stop using tons of antibiotics, the bugs for the most part revert to their earlier non-resistant genotypes (it costs resources to maintain resistance).
      The solution to most antibiotic resistance is to stop the wholesale farm use of antibiotics.
      The problem is not in the human antibiotic market. The problem is in the industrial farm market.

    • @Brad- My PCPs stil complain about potential legal costs for not treating with antibiotics. Are they just whining?


    • @ Mark – the peer reviewed literature doesn’t support your assertion. While animal uses (especially non-therapeutic) are a significant problem, many, many studies also point to resistance associated with human use. We misuse in both sectors, and lack a good sense of their relative contributions to resistance.

      @ steve – I’ve collected all of the reported legal cases relating to hospital-associated infections. It’s a surprisingly small set. I’m not doubting that your PCPs are complaining, but their fears don’t appear to be justified.

    • Probably the best information on antibiotic resistance in human and animal bacteria comes from Denmark where they have severely limited animal use of antibiotics and conduct intensive surveillance of human and animal antibiotic use, infections and resistance.
      They publish annual reports which are quite extensive. They are available from danmap.org
      The latest report documents clearly the reduction in resistance in animals and humans where there have been reductions in animal use. There is lots of good information in these reports that you may want to devote some of your prolific curiosity to exploring.

    • @Steve – Hey Steve
      My suspicion is yes. While the in and outpatient domain is a bit different–inpatient side not guilty of using antibiotics, but treating too broadly, while outpatient culpable for prescribing in the first place. Plenty of gray zones, but the evidence for rx’ing pharyngitis, sinusitis, and bronchitis pretty clear–dont. It may not be just “legal concerns” but also feeling rushed and taking path of least resistance, mainly, just write the prescription.