The microbe is mightier than the market

Appointing an economist to save us from superbugs might seem odd but, as with many problems, money is at the root of it

Some mocked David Cameron for selecting a money man rather than a medic to head the Government's antibiotics taskforce. On the surface giving the job to Jim O'Neill, the former chief economist at the investment bankers Goldman Sachs, does seem eccentric.

Drugs which have saved millions of lives over the past century are becoming steadily less effective. Superbugs are developing a resistance to the medicines. Antibiotics, which turned once-fatal diseases into trivial inconveniences, are beginning to be outsmarted by evolving microbes. These resistant superbugs killed 5,000 people in the UK last year – and five times more in Europe, 160 times as many in China and 200 times that number in the United States.

But there is more to this than biochemistry. There are cultural issues too. The problem is "pushy patients" demanding antibiotics they don't need, says England's chief medical officer. Our litigation-mad society makes doctors prescribe unnecessary drugs for fear that they will be sued, other medics say. Or it is ignorant patients who – as Alexander Fleming predicted when he discovered the first antibiotic, penicillin, in 1928 – have provoked bacterial resistance by failing to complete the prescribed course once they start to feel better.

Yet economics raises its myopic head too. Some 70 per cent of antibiotic doses in the United States are given prophylactically to farm animals, to keep them healthy in overcrowded conditions, or to promote tissue growth. Antibiotic growth promoters have been banned in the European Union since 2006 and yet vets in the UK claim they see antibiotics used "willy-nilly" on farms all the time as a preventative measure rather than a treatment.

There is, however, an even bigger financial issue. Germs are developing resistance faster than new antibiotics are being developed mainly because no new antibiotics are being developed at all. That is because there is no money in it for the drug companies. It is this economic model which is the real villain in the erosion of the effectiveness of antibiotics. That is why O'Neill is the right man for the job – if, that is, he can set aside his free-market ideology.

The big problem in the war against antibiotic resistance is what economists call market failure. The cost of bringing one antimicrobial drug to market is between £750m and £1.2bn. Yet the income that brings to a Big Pharma company – for a drug which most people will use only once or twice a year – is small compared to what they can earn from other drugs.

For a start doctors will hold the newest and most potent antibiotics in reserve, for when all else fails, so new drugs are used even less often. By contrast, a medicine such as anti-cholesterol statins, which millions use every day, brings cash in truckloads. So do drugs for which firms can charge massive amounts per dose. A new highly effective treatment for deadly hepatitis C, called Sofosbuvir, is currently $84,000 (£49,000) for a 12-week course in the United States.

This is why no new class of antibiotic has reached the market since 1987. Big Pharma prefers more lucrative areas of activity. In 1990 there were almost 20 antibiotic research and development programmes among the bigger drug companies; today, according to the Infectious Diseases Society of America, there are only a handful. Drug giants Pfizer, Eli Lilly and Bristol-Myers Squibb have switched their focus to cancer and chronic diseases, where drugs command higher prices and are taken for longer. AstraZeneca recently said it would put less money into the activity. Only the Swiss firm Roche has a new offering in development.

The public good demands a new generation of antibiotics. But the market is not providing that. It is not the only area of market failure. There is more money to be made from a drug that allows rich fat people to eat without putting on weight than there is in finding a vaccine for malaria which kills mainly poor people in Africa. GlaxoSmithKline is working on an exciting malaria vaccine called RTS,S but only with a $200m grant from the world's biggest philanthropist, Bill Gates.

The hard truth, which even a free-marketeer such as Cameron has had to confront, is that there are some areas in life where the solutions of the market are nasty, brutish and short term-ist. The common good requires something more than a narrow maximisation of share-holder profit. New models have to be found to draw businesses into a wider social responsibility.

O'Neill will probably say that the National Health Service should pay more for antibiotics on the grounds that though you might only take the drug for a couple of weeks it could extend your life by 50 years. But he also needs to discover mechanisms to create partnerships and greater information-sharing between companies, academic researchers, doctors and regulators. He needs to multiply schemes like the EU's Innovative Medicines Initiative, the Path Malaria Vaccine Initiative or GSK's "open innovation" research-sharing strategy on neglected tropical diseases.

There are things that others can do. Medical professionals could get back to basics; antibiotic-resistant staphylococcus infections in hospitals have been cut by a return to vigilant hand-washing. Consumers could start a campaign to identify and boycott meat which has been plumped up with antibiotics. Governments could find much more cash for relevant university research.

But none of this will be to any avail if the O'Neill commission does not find new business models for the production of antibiotics and other socially essential medicines. Over to you, Jim. We are in a war against microbes, and at present the microbes are winning. A post-antibiotic age is too apocalyptic to contemplate.

Paul Vallely is visiting professor of public ethics at the University of Chester