Antibiotics, Capitalism and the Failure of the Market

by Scott Nicholson

Last March 2013, England’s Chief Medical Officer, Dame Sally Davies gave the stark warning that antimicrobial resistance poses "a catastrophic threat" Unless we act now, she argued, "any one of us could go into hospital in 20 years for minor surgery and die because of an ordinary infection that can’t be treated by antibiotics. And routine operations like hip replacements or organ transplants could be deadly because of the risk of infection."[1]

Over billions of years, bacteria have encountered a multitude of naturally occurring antibiotics and consequentially developed resistance mechanisms to survive. The primary emergence of resistance is random, coming about by DNA mutation or gene exchange with other bacteria. However, the further use of antibiotics then favours the spread of those bacteria that have become resistant.

More than 70% of pathogenic bacteria that cause healthcare acquired infections are resistant to at least one the drugs most commonly used to treat them.[2][3] Increasing resistance in bacteria like Eschericha coli (E. coli) is a growing public health concern due to the very limited therapy options for infections caused by E. coli. This is particularly so in E .coli that is resistant to carbapenem antibiotics, the drugs of last resort.

The emergence of resistance is complex issue involving inappropriate and over use of antimicrobials in humans and animals. Antibiotics may be administered by health professionals or farmers when they are not required or patients may take only part of a full course of treatment. This provides bacteria the opportunity to encounter the otherwise life-saving drugs, at ineffective levels and survive mutation to produce resistant strains. Once created, these resistant strains have been allowed to spread by poor infection control and regional surveillance procedures.

These two problems are easily solved by educating healthcare professionals, patients and animal keepers about the importance of antibiotic treatment regimens and keeping to them. Advocating good infection control procedures in hospitals and investment in surveillance programs monitoring patterns of resistance locally and across the country would reduce the spread of infection. However, the biggest problem is capitalism and the fact that there is not a supply of new antimicrobials.

Between 1929 and the 1970s pharmaceutical companies developed more than twenty new classes of antimicrobials.[4][5] Since the 1970s only two new categories of antimicrobials have arrived.[6][7] Today the pipeline for new antibiotic classes active against highly resistant Gram negative bacteria is dry [8][9][10] the only novel category in early clinical development has recently been withdrawn.[9][11]

For the last seventy years the human race has kept itself ahead of resistant bacteria by going back into the laboratory and developing the next generation of antimicrobials. However, due to a failure of the market, pharmaceutical companies are no longer interested in developing antibiotics.

Despite the warnings from Dame Sally Davies, drug companies have pulled back from antimicrobial research because there is no profit to be made from it. When used appropriately a single £100 course of antibiotics will save someone’s life. However, that clinical effectiveness and short-term use has the unfortunate consequence of making antimicrobials significantly less profitable than the pharmaceuticals used in cancer therapy, which can cost £20,000 per year.

In our current system, a drug company’s return on their financial investment in antimicrobials is dependent on their volume of sales. A further problem arises when we factor in the educational programs aimed at teaching healthcare professionals and animal keepers to limit their use of antimicrobials. This combined with the relative unprofitability has produced a failure in the market and a paradox for capitalism.

A response commonly proposed by my fellow scientists, is that our government must provide incentives for pharmaceutical companies to develop new antimicrobial drugs. Suggestions are primarily focused around reducing the financial risk for drugs companies and include grants, prizes, tax breaks, creating public-private partnerships and increasing intellectual property protections. Further suggestions are often related to removing “red tape” and streamlining the drug approval and clinical trial requirements.

In September 2013 the Department of Health published its UK Five Year Antimicrobial Resistance Strategy.[12] The document called for “work to reform and harmonise regulatory regimes relating to the licencing and approval of antibiotics”, better collaboration “encouraging greater public-private investment in the discovery and development of a sustainable supply of effective new antimicrobials” and states that “Industry has a corporate and social responsibility to contribute to work to tackle antimicrobial resistance.”

I think we should have three major objections to these statements. One, the managers in the pharmaceutical industry do not have any responsibility to contribute to work to tackle antimicrobial resistance. They have a responsibility to practice within the law or be fined and make profit for shareholders or be replaced. It is the state that has the responsibility for the protection and wellbeing of its citizens.

Secondly, following this year’s horsemeat scandal we should object to companies cutting corners in attempt to increase profits. This leads on to the final objection, that by promoting public-private collaboration all the state is doing, is subsidising share holder profits by reducing the shareholder’s financial risk.

The market has failed and novel antimicrobials will require investment not based on a financial return from the volume of antibiotics sold but on the benefit for society of being free from disease.

John Maynard Keynes in his 1924, Sydney Ball Foundation Lecture at Cambridge, said “the important thing for government is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all”.[13] Mariana Mazzucato in her 2013 book, The Entrepreneurial State, discusses how the state can lead innovation and criticises the risk and reward relationships in current public-private partnerships.[14] Mazzacuto argues that the state can be entrepreneurial and inventive and that we need to reinvent the state and government.

This praise of the potential of the state seems to be supported by the public as following announcements of energy price rises, in October 2013, a YouGov poll found that 12 to 1 people were against the NHS being run by the private sector; 67% in favour of Royal Mail being run in the public sector; 66% want railway companies to be nationalised and 68% are in favour of nationalised energy companies.[15]

We should support state funded professors, post-doctoral researchers and PhD students as scientists working within the public sector. They could study the mechanisms of drug entry into bacterial cells or screen natural antibiotic compounds. This could not be done on a shoestring budget and it would no doubt take years to build the infrastructure but we could do things like make the case for where the research took place.

Andrew Witty’s recent review of higher education and regional growth asked universities to become more involved in their local economies.[16] The state could choose to build laboratories in geographical areas neglected by private sector investment and help promote regional recovery. Even more radically, if novel antibiotics are produced for their social good rather than financial gain, they can be reserved indefinitely until a time of crisis.

With regard to democracy, patients and the general public could have a greater say in what is researched and to help shift us away from our reliance on the market to provide what society needs.  The market responds, not to what society needs, but to what will create the most profit. This is a reoccurring theme throughout science. I cannot begin to tell you how frequently I listen to case studies regarding parasites which only affect people in the developing world. Again, the people of the developing world have very little money so drug companies neglect to develop drugs as there is no source of profit. We should make the case for innovation not to be driven by greed but for the service of society and even our species.

Before Friedrich Hayek, John Desmond Bernal in his 1939 book, The Social Function to Science, argued for more spending on innovation as science was not merely an abstract intellectual enquiry but of real practical value.[17] Bernal placed science and technology as one of the driving forces of history. Why should we not follow that path?

Scott Nicholson is PhD student researching the immunomodulatory role of PAR-2 on B-cells. You can follow him on Twitter at @scott993

_____

References

[1] https://www.gov.uk/government/news/antimicrobial-resistance-poses-catastrophic-threat-says-chief-medical-officer--2
[2] http://www.ajicjournal.org/article/S0196-6553(04)00542-5/fulltext
[3] http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2902848/
[4] http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3085877/
[5] http://onlinelibrary.wiley.com/doi/10.1111/j.1465-0691.2004.1007.x/full
[6] http://www.ncbi.nlm.nih.gov/pubmed/14969579
[7] http://www.eurekaselect.com/78050/article
[8] http://cid.oxfordjournals.org/content/48/1/1.long
[9] http://link.springer.com/chapter/10.1007%2F978-3-642-28951-4_11
[10] http://link.springer.com/chapter/10.1007%2F978-3-642-28951-4_1
[11] http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3591879/
[12] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/244058/20130902_UK_5_year_AMR_strategy.pdf
[13] http://www.maynardkeynes.org/john-maynard-keynes-reparations-probability-gold.html
[14] http://www.anthempress.com/the-entrepreneurial-state
[15] http://classonline.org.uk/docs/Class-YouGov_poll_results_28_October_2013.pdf
[16] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/249720/bis-13-1241-encouraging-a-british-invention-revolution-andrew-witty-review-R1.pdf
[17] http://books.google.co.uk/books/about/The_social_function_of_science.html?id=nbxgAAAAIAAJ&redir_esc=y

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First published: 06 January, 2014

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3 Comments on "Antibiotics, Capitalism and the Failure of the Market"

By Blade, on 07 January 2014 - 01:10 |

Antimicrobial resistance is a big challenge and this is an interesting article, which tries carefully to build a logical argument against a market led solution. 

While there are clearly cases where markets fail (and a role for the state in addressing these) I think that the article fails to address key objections to its conclusion, which are - to the author’s credit - highlighted within the article itself. Even if we assume that the market for new antibiotics would remain unprofitable against a background of growing antimicrobial resistance (which seems highly unlikely - I would pay for it and many others would too), why should we believe that nationalisation is preferable to the state incentivising private innovation by increasing the reward for developing such drugs? The article highlights this possibility but then sidesteps it by focusing on the merits (or not) of deregulation - which is a different thing altogether - and a rather odd just-so statement about the wrongness of the state subsidising shareholder risk  (how is that fundamentally different to any transaction?). 

To compound this, the article is rather uncritical about its preferred alternative of state entrepreneurialism: I have no idea whether the alternative would work better - it may well do - but there are risks with this approach that cannot be dismissed by quoting public opinion polls. So I cant shake the suspicion that the author knew his conclusion before he started researching the article… A good read though. 

By Brendan Halpin, on 07 January 2014 - 10:51 |

There’s another angle of market failure that you are missing: the positively criminal continuation of the use of antiobiotics as growth promoters in agriculture. Particularly in the US, commercial interests have successfully blocked action on this for well over 30 years. See https://www.sciencenews.org/blog/science-public/growth-promoting-antibiotics-way-out for example

By Prof. L. Stoimenov, on 09 January 2014 - 11:24 |

The state which is not under people’s control is not interested in scientific and technological development

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