Antibiotics show free market failure

[Blind groper]

Reference : New Scientist, 24 May 2014, page 10


The world is on the verge of a disaster due to the progressive failure of antibiotics to control disease. Antibiotic resistance is growing at a great pace, and there are now disease causing bacteria resistant to any antibiotic.

The only way to halt this disaster is to develop new antibiotics, and lots of them. But to do so is not cheap. Each new drug will cost something like $ 1 billion to develop.

So why are the big drug companies not doing it? It is because there are a number of antibiotics being sold cheaply, due to being out of patent. The drug companies would have to sell any new antibiotic cheaply also, to compete, and they make more money by developing drugs in other areas, where there are no constraints on selling price. In 1990, 18 big drug companies were working on new antibiotics, but now, when they are more vital than ever, only 5 of those companies are still doing antibiotic research.

The free market has failed to supply new antibiotics, and millions of people who will die of diseases caused by antibiotic resistant bacteria will pay the price.

The only way around this impasse is to use an approach that does not depend on the free market. One way is to use subsidies, by governments, to get drug companies back into the business of developing antibiotics. Another way is to set up mega million dollar prizes, to be paid to those companies.

European drug companies are open to these ideas, but American drug companies and the American government are not.

This is a clear example of the failure of the free market to meet human needs.

[piscator]

Fine old line American drug companies like Merc, Rorer, Sandos, and Bayer get their million dollar prizes the old fashioned way - by paying top dollar for the best lobbyists and FDA attorneys in the business.

[Hermit]

Fine old line American drug companies like Bayer, Xandos, Merc, and Rorer get their million dollar prizes the old fashioned way - by paying top dollar for the best lobbyists and FDA attorneys in the business.

Also, antibiotics used to be hugely profitable until they lost effectiveness. The loss of profitability has nothing to do with cheap, generic copies appearing on the market after the patents expired. If new antibiotics are developed and effective the patents on them will ensure renewed windfalls for big pharma long before those patents expire. The sad truth about the lack of new and effective antibiotics is that no matter how much money is thrown at research, the scientists are losing the race against the speed of mutation that bacteria have become capable of. That speed was actually caused by the very creation of antibiotics. It looks to me like antibiotics may have fundamentally been a temporary solution to the problems they were invented to fight.

[MrJonno]

Bacteria don't mutate and evolution doesn't exist. The bacteria that are around today are those that were on Noah's Ark in petri dishes 1 male 1 female of each 'species'.

Next thing you will believe Global Warming is happening

[Hermit]

How on earth did you get the impression that I don't think bacteria mutate, evolution exists or that climate change doesn't?

[rainbow]

This is a clear example of the failure of the free market to meet human needs.

...so who said it was supposed to do this?

It exists to serve the interests of the Overlords.

[MrJonno]

How on earth did you get the impression that I don't think bacteria mutate, evolution exists or that climate change doesn't?

The sarcasm was not aimed at you!

[rainbow]

How on earth did you get the impression that I don't think bacteria mutate, evolution exists or that climate change doesn't?

The sarcasm was not aimed at you!

Yeah.



Right.

[MiM]

In this specific case, I think one could argue, that the free market could easily give us the new antibiotics we want, if the FDA and others would not put such stringent demands on new drugs, that their development becomes prohibitively expensive.

Probably at the cost of new Thalidomide like cases, though. And getting a lot of drugs that really don't do what they are marketed for, in addition to the few good ones.

[Warren Dew]

Fine old line American drug companies like Bayer, Xandos, Merc, and Rorer get their million dollar prizes the old fashioned way - by paying top dollar for the best lobbyists and FDA attorneys in the business.

Also, antibiotics used to be hugely profitable until they lost effectiveness. The loss of profitability has nothing to do with cheap, generic copies appearing on the market after the patents expired. If new antibiotics are developed and effective the patents on them will ensure renewed windfalls for big pharma long before those patents expire. The sad truth about the lack of new and effective antibiotics is that no matter how much money is thrown at research, the scientists are losing the race against the speed of mutation that bacteria have become capable of. That speed was actually caused by the very creation of antibiotics. It looks to me like antibiotics may have fundamentally been a temporary solution to the problems they were invented to fight.

Exactly. It's not a "free market" failure - free markets tend to value things that work much more highly than things that don't work - it's a scientific failure. But I can see how a source called "New Scientist" might not want to admit that it's science that's the issue here.

[macdoc]

Talking about free market and pharmaceuticals is nonsense in the first place - drugs are highly regulated both for good and bad.

Public weal is not in shareholders best interests many times nor should it be except where a government offers incentives.

It's an uneasy alliance,

[Hermit]

It's not a "free market" failure

Actually, it is, at least in part, a free market failure. MiM mentioned Thalidomide. That drug was advertised among other things to prevent morning sickness. 10,000 babies were born with malformations in their hearts and other organs as well as limbs. Half of them died because of them. The survivors had to cope with such features as missing or grossly malformed arms and legs, and these features were actually inherited by some members of the next generation. Investigations of this massive disaster revealed that the pharmaceutical company that developed the drug basically neglected to test the drug before marketing it. It was clearly a case of minimising cost in order to maximise profit. This is truly a market failure.

Seeing that private enterprise cannot be trusted to do the right thing, regulations were drawn up to prevent a recurrence of this sort of thing. Of course this increased the cost of developing new drugs hugely, but pharmaceutical companies were not deterred. Their bean counters worked out that having to spend a billion dollars on designing a new product does not prevent raking in billions of dollars in profit just the same. It is only since not even a billion dollar development budget could overcome the problem of mutation by bacteria that we can speak of a scientific failure.

By the way, the opening post quotes nothing from the New Scientist article at all. It's MrJonno's interpretation and includes some serious distortions. If you aree interested in reading the actual article, click on this link.

[MrJonno]

To be fair drugs companies have never claimed to be paragons of virtue which is why we should have plenty of public funding for science. It's not like their isnt a public university - drugs company relationship anyway. Society funds general science most of it doesnt make any money (at least short term) and the drug companies take advantage of the bits that does have the potential

[Blind groper]

Quoting from the article.
"The good news, says Simonet, is that all these defences suggest there are lots more potential antibiotics out there, if we can just develop them. Existing drugs come from the 1 per cent of soil microbes we can culture. "We must explore the huge reservoir in the other 99 per cent," he says."

In other words, there is no scientific failure. There is plenty of potential to create new antibiotics. Of course, it will be a never ending quest to keep ahead of resistant bacteria, but it can be done. It is the free market that has let humanity down - not science.

[JimC]

To be fair drugs companies have never claimed to be paragons of virtue which is why we should have plenty of public funding for science. It's not like their isnt a public university - drugs company relationship anyway. Society funds general science most of it doesnt make any money (at least short term) and the drug companies take advantage of the bits that does have the potential

There is a lot of truth in this. Science-based companies will always do a certain amount of applied research, but they ride on the backs of a huge amount of pure scientific research based on publicly funded institutions. Companies in that position should be paying a sizeable levy to support research at universities.

And I agree with the OP that this is an example where the "invisible hand" does not work to the benefit of society (I'm perfectly happy to agree that there are instances where it clearly does...). However, it is not just the lack of research on new antibiotics, or alternative techniques of bacterial control such as tailored phages. The critical market failure occurred much earlier, when societies around the world allowed companies to flood the market with cheap antibiotics to be fed to livestock on a regular basis. This was not treatment of individual animals by vets, it was turning antibiotics into a food supplement, for reasons of profit. Many scientist warned that the consequences would be a powerful acceleration of the evolution of antibiotic resistant strains of bacteria, which could pass their resistance via exchange of genetic material to human pathogens. So, once again, greed and the dominance of government by corporate power has had dangerous consequences for human health.

Fine old line American drug companies like Bayer, Xandos, Merc, and Rorer get their million dollar prizes the old fashioned way - by paying top dollar for the best lobbyists and FDA attorneys in the business.

Also, antibiotics used to be hugely profitable until they lost effectiveness. The loss of profitability has nothing to do with cheap, generic copies appearing on the market after the patents expired. If new antibiotics are developed and effective the patents on them will ensure renewed windfalls for big pharma long before those patents expire. The sad truth about the lack of new and effective antibiotics is that no matter how much money is thrown at research, the scientists are losing the race against the speed of mutation that bacteria have become capable of. That speed was actually caused by the very creation of antibiotics. It looks to me like antibiotics may have fundamentally been a temporary solution to the problems they were invented to fight.

Exactly. It's not a "free market" failure - free markets tend to value things that work much more highly than things that don't work - it's a scientific failure. But I can see how a source called "New Scientist" might not want to admit that it's science that's the issue here.

NewScientist was amongst those that warned via editorial, and articles by top microbiologists, of the problems. It is absurd to call the antibiotic crisis a "science failure" - it is a failure by society to make rational decisions, due to the power exerted by corporations who are only interested in their own bottom line, and have the influence over governments to ensure that they are free to pursue their own narrow interests.