The "Evils" of Socialised Medicine

3 min read December 13, 2016 at 7:55pm on Health and Infection

You might have seen a story doing the rounds about a shortage of a couple of antibiotics - metronidazole and vancomycin.  Stripped of some of the sensationalist language, it's actually not a bad coverage of an important issue.  Sorting this issue out at the level of our local hospital took up most of my spare time last week.

Both are frequently used antibiotics - 9th (metro) and 15th (vanco) of the top 20 most frequently used antibiotics in the 2016 AURA report .  The 2014 report of the National Antimicrobial Prescribing Survey (NAPS) had metronidazole even higher - 3rd on the list. So how does it come to this - where not just a pharmacy or a hospital, but an entire country can run short on antibiotics?

It's a very complex problem and one that doesn't lend itself well to summarising in a blog post, but it's worth highlighting that we have a very robust drug approval system whereby all items classified as "therapeutic goods" must be approved by the Therapeutic Goods Administration (TGA) prior to being allowed to be used on people. 

Approval is quite a complex process, which involves review of clinical trial data of safety and efficacy.  The TGA recovers costs by charging fairly substantial fees for evaluation and registration of these goods - currently in excess of $100,000 for a new generic form of a medication, and $220,000 for the registration of a new chemical entity. It is possible, when there are compelling indications for the use of an unregistered medicine, to access drugs which are not TGA approved via the Special Access Scheme. In essence, the prescribing doctor certifies that they believe the benefit is greater than the risk of using a drug which has not been TGA-assessed. The problem with antibiotics boils down to finances. One of the challenges with antimicrobials is that they are not drugs which provide a good return on investment.  Drug research and development is extremely expensive.  

If you were an evil baron of BigPharma(tm), which of the following two scenarios would you prefer?

  1. You spend $2.5bn developing a new HIV antiviral (or cholesterol or blood pressure medication) which - barring side-effect or other problem, your patient will fill a prescription for once a month every month until they die;  OR
  2. You spend $2.5bn developing a new antibiotic which:
    1. Antibiotic stewardship doctors (c'est moi!) refuse to let anyone use ever without permission
    2. When it does get used, it's for maybe 10 days tops and then the patient is cured and
    3. The patient never needs to have it again; in a few months, go back to step 1

It's compounded even more by the fact that (as there has been very little new development of antibiotics for many years - see above) many antibiotics are now off-patent and available as generics.  So as the Baron of BigPharma, you can give the TGA $200k to approve your new generic drug in Australia, which you spent $2.5bn on 10 years ago and then your mates over from GenericPharma pay $80k to TGA-approve a new generic version of your $2.5bn + $200k drug and start making a return on investment much, much faster than you do.  This still requires shifting a lot of units though, because the generic drugs don't command a price premium.

So - no development happens, no incentives to licence new generics and very little financial incentive to make sure that there is no break in the supply chain - because they don't get much profit of cheap, old drugs. Next time someone tells you that the market is the most efficient way of running a healthcare system, hope you're not in need of admission for IV antibiotics.  

featured image from via Unsplash