Antibiotic tax, the proposal against the superbug emergency

A tax on antibiotics could help fight the emergence of superbugs that are invulnerable to drugs. This is the proposal put forward by a team of English economists from the University of East Anglia (UEA), Loughborough University and E.CA Economics, in a study published in the ‘International Journal of Industrial Organization’. Antimicrobial resistance, they recall, causes about 700 thousand deaths per year and, if not controlled, by 2050 could endanger 10 million lives per year with a loss of economic production equal to 100 trillion dollars.

For the co-author of the paper Farasat Bokhari, former member of the School of Economics UEA, now at Loughborough University, antibiotic resistance is “perhaps the next ticking time bomb in the health system. In our analysis – he specifies – the financial burden of the tax” on these drugs “is not borne by patients, but rather by GPs who in some cases may overprescribe antibiotics”.

The idea is to discourage the use of broad-spectrum antibacterial drugsthose most at risk of fueling the development of superbugs, consequently promoting the use of narrow-spectrum antibiotics, targeted at the pathogen responsible for the infection after testing to identify it.

Data from the last 10 years

Using 10 years of data on monthly sales of antibiotics dispensed in UK pharmacies, and using specific economic models to consider the effect of different factors, the researchers examined the impact of two types of taxation.

A 20% tax on all antibiotics, applied to these drugs indiscriminately – it emerged – would reduce their total use by 12.7%, decreasing the use of broad-spectrum antibiotics by 29.4% alone; it would also translate into a welfare loss for the consumer equal to, in the United Kingdom, approximately 19.9 million pounds per year. If, however, the same 20% tax were applied only to broad-spectrum antibiotics, their use would decrease by 37.7%, the overall use of antibacterials would fall by just 2.38% and the welfare loss for the consumer would be limited to 4.8 million pounds per year.

“Relatively small compared to the expected social costs in terms of deaths and economic losses” from superbugs, notes Weijie Yan of E.CA Economics, the study’s lead author. “Although the alternative tax regimes we consider differ in the extent to which they shift demand” for antibiotics, Bokhari says, “our estimates suggest that these policies can be very effective in managing that demand.”