The Menace of Superbugs: What Can Economists Say About It?

Abstract: It is well documented that there is a very serious health crisis developing because bacteria are evolving resistance to the antibiotics currently in use and pharmaceutical companies have few new antibiotics in the pipeline. This means that common infectious diseases will no longer be treatable, which will increase their mortality and morbidity consequences. Furthermore, even routine surgeries and chemotherapy for cancer—which heavily rely on antibiotics to fight off infections—cannot be performed. This talk will discuss potential solutions that economics can suggest. It will first examine what can be done through the patent system (patent extensions, relaxing novelty requirements etc.) for new antibiotics. It will then identify the core features responsible for the current state of affairs and propose measures to address the problem at its root. The talk will end with a tentative proposal, which argues that universal insurance may help reduce the scope of the crisis of antibiotic resistance in the developed and the developing world.