Open Access to the Resource of Antibiotic Treatment Efficacy Subject to Bacterial Resistance

Bruno Nkuiya and Markus Herrmann

No 144306, Working Papers from University of Laval, Center for Research on the Economics of the Environment, Agri-food, Transports and Energy (CREATE)

Abstract: In this paper, we are interested in how a pharmaceutical industry manages existing antibiotic drugs in the context of bacterial resistance. We consider a model based on an epidemiological framework where antibiotic recovery rates, and thus intrinsic qualities, may differ. Antibiotic efficacy is modeled as a common pool of a non-renewable resource to which antibiotic producers have open access. The paper derives antibiotic demands within a vertical differentiation model and characterizes the dynamics of infected individuals, antibiotic efficacy and treatment rates under the open-access and the socially optimal allocation. We show that the high-quality antibiotic drug loses its comparative advantage over time under both allocations, such that the low-quality drug should be used longer. This occurs at a later point of time in the social optimum and allows for a better control of infection in the longer run. In contrast with the ambiguous outcome reported in the literature, the socially optimal steady-state level of antibiotic efficacy is lower than that of the open-access allocation. We also extend our analysis to a strategic, duopolistic context.

Keywords: Health; Economics; and; Policy (search for similar items in EconPapers)
Date: 2013-02
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/144306/files/CREATE2013-2.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:ulavwp:144306

DOI: 10.22004/ag.econ.144306

Access Statistics for this paper

More papers in Working Papers from University of Laval, Center for Research on the Economics of the Environment, Agri-food, Transports and Energy (CREATE) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().