Innovation and Antibiotic Use within Antibiotic Classes: Market Incentives and Economic Instruments Report as inadecuate




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We analyze a monopolist’s incentive to innovate a new antibiotic which is connected to the same pool of antibiotic treatment efficacy as is another drug produced by a generic industry. We outline the differences of antibiotic use under market conditions and in the social optimum. A time and state-dependent tax-subsidy mechanism is proposed to induce the monopolist and generic industry to exploit antibiotic efficacy optimally.

Keywords: Economics of antibiotic resistance ; antibiotic innovation ; monopoly ; generic industry ; social optimum ; economic instruments

Subject(s): Health Economics and Policy

Issue Date: 2013-05

Publication Type: Working or Discussion Paper

PURL Identifier: http://purl.umn.edu/149731

JEL Codes: D21; D42; I18; Q38

Series Statement: CREATE Working Paper

2013-3

Record appears in: University of Laval > Center for Research on the Economics of the Environment, Agri-food, Transports and Energy (CREATE) > Working Papers





Author: Herrmann, Markus ; Nkuiya, Bruno ; Dussault, Anne-Renée

Source: http://ageconsearch.umn.edu/record/149731?ln=en



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