Combating the spread of drug-resistant bacteria is a losing business proposition.

Big Pharma has abandoned antibiotic R&D, and small pharmaceutical companies are going bankrupt. Several factors contribute to this trend. From an operations standpoint, it is difficult to justify a product with high costs and low demand. The article highlights the difficulty of reconciling profitability and the public good.

Video Spotlight: Fighting Drug-Resistant Germs

This post is based on The New York Times article, Crisis Looms in Antibiotics as Drug Makers Go Bankrupt, by A. Jacobs, December 25, 2019, and the YouTube video, Data Overview: 2019 Antibiotic Resistance Threats Report, by the Centers for Disease Control and Prevention, November 13, 2019. Image source: Shutterstock/Gorodenkoff.

Discussion Questions:

1. Why is the field of antibiotic research unprofitable?

Guidance: There are several reasons why this type of research is unprofitable. R&D costs for new generations of antibiotics are very high, but the time to get a new antibiotic approved is long and sales are poor. Antibiotics are taken for a short period of time, limiting sales volume. In their attempts to control costs, hospitals have been reluctant to spend money on new antibiotics. Warned of the effects of abusing Continue reading →