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2013-2 Open Access to the Resource of Antibiotic Treatment Efficacy Subject to Bacterial Resistance

Série Cahiers du CREATE
Markus Herrmann - Chercheur régulier
Bruno Nkuiya - Non membre

Cahier de recherche 2013-2 Février 2013


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: Antibiotic management, Non-renewable resource, Open access, Social optimum, Public health

Classification JEL: L13, Q21, I18

Date pour le tri: 
Lundi, Février 4, 2013
Environnement et énergie