Thursday, 19 November 2015

Markets, Regulation and Phages

Note: there's some disagreement about whether or not '(bacterio)phage' is an invariable noun or not. I'm going with this article on the matter.

Also, I'm very much a scientific layman, so please correct me if I misuse any terminology. 

I woke up this morning to the news that scientists in China have discovered a bacterial mutation, in both livestock and humans, that is resistant to colistin, the 'last line of defence' antibiotic. Resistance to colistin has happened before, but this time the resistant gene is easily shared between bacteria. This is very bad. Somehow, this has not induced mass panic and calls from the leaders of the world to declare a War on Pan-resistant Bacteria. That is also very bad.

A lot of our current trouble comes not so much from the absence of new antibiotics (though this is a problem: we've not had a new antibiotic class since the late 80s), but from the misuse of the ones we currently have. To quote The Master Himself, back in 1945:
...I would like to sound one note of warning. Penicillin is to all intents and purposes non-poisonous so there is no need to worry about giving an overdose and poisoning the patient. There may be a danger, though, in underdosage. It is not difficult to make microbes resistant to penicillin in the laboratory by exposing them to concentrations not sufficient to kill them, and the same thing has occasionally happened in the body. The time may come when penicillin can be bought by anyone in the shops. Then there is the danger that the ignorant man may easily underdose himself and by exposing his microbes to non-lethal quantities of the drug make them resistant. Here is a hypothetical illustration. Mr. X. has a sore throat. He buys some penicillin and gives himself, not enough to kill the streptococci but enough to educate them to resist penicillin. He then infects his wife. Mrs. X gets pneumonia and is treated with penicillin. As the streptococci are now resistant to penicillin the treatment fails. Mrs. X dies. Who is primarily responsible for Mrs. X’s death? Why Mr. X whose negligent use of penicillin changed the nature of the microbe. Moral: If you use penicillin, use enough.
What we have seen is the overuse of antibiotics worldwide. By making them too readily available, particularly for agricultural usage (this gene appears to have originated from treating pigs with colistin), as well as offering them for conditions antibiotics do nothing for such as the common cold, their effectiveness has been reduced over the last few decades. This an incredibly good example of the kind of multipolar problems Scott Alexander has described. The lack of suitable central co-ordination in the use of antibiotics, permitting individuals to pursue their own perceived rational self-interest has resulted in a potential catastrophe that could leave millions dying of previously treatable illnesses. And doesn't that perfectly illustrate the limitations of markets? Markets are fantastic at co-ordinating in many ways...but not in every way, and it's failure modes can be pretty dramatic.

There is hope, however, as there often is. New antibiotics are in development, but more importantly, in my utterly unqualified opinion, there is phage therapy.
For decades, patients behind the Iron Curtain were denied access to some of the best antibiotics developed in the West. To make do, the Soviet Union invested heavily in the use of bacteriophages — viruses that kill bacteria — to treat infections. Phage therapy is still widely used in Russia, Georgia and Poland, but never took off elsewhere. [source]
Phage therapy never took off in the West largely because of the successes of antibiotic treatments. Phage therapy involves deploying specific bacteriophages (a form of virus that attacks bacteria), which then destroy the specific bacteria they are targeting. Unlike antibiotics, that will also damage the body's 'friendly' bacteria, the phage can be specific enough to only attack the pathogen. What is holding back research and development is, ironically considering my comments above, regulation. Laws in the US preventing the patenting of living things is a major barrier for pharmaceutical companies to invest in phage therapy: how will they make their money back if they can't patent the phages they've developed?

What is thus demonstrated is how damn complicated the relationship between the market, regulations and incentives actually is. A lack of proper, responsible regulation contributed to this situation in a big way, and now overly-strict regulations are holding us back from being able to fix this, or at least making it more difficult. Obviously, one thing that needs to happen is an increase in government spending on pure science. Creating more opportunities for scientific enquiry outside the structure of capital would be a fantastic step in the right direction, but so would properly calibrating market incentives. The plain fact of the matter is that the market is a fantastic mechanism for production and innovation, but the very nature of the profit motive limits it as well. It can be very difficult to convince anyone to spend on something purely speculative if they stand little obvious chance of making good on their investment.

I'm not one for moralising. The failures of capitalism are, as far as I'm concerned, no more 'evil' than the failure of a screwdriver to turn an egg into an omelette. This is just about the proper application of tools. Capitalism is a fantastic tool if directed appropriately, and so is state regulation. It's easier to think in extremes than in nuanced moderations, but there's a reason Aristotle locates virtue (understood more as 'skill' than anything pious) in the centre ground between excess and deficiency. It's not as if our only choice is between Murray Rothbard and Joseph Stalin.


  1. I think you're being a little blasé with your language by calling all problems of individual action "market problems".

    Where's the market transaction involved in a person who has a course of antibiotics and chooses not to finish them?

    1. I'm probably misusing terminology here. We'll never be able to control for every individual act of stupidity, but we can at least try and reduce the likelihood of the collective ones.

  2. It is true the market cannot solve the antibiotic coordination problem.

    However, we do have central co-ordination. This is what it looks like: imminent disaster. Naturally those who can profit from misusing them will capture the regulators. The antibiotic problem is not solvable.

    Or rather, the market can solve it the exact same way the commons can solve it: if the managers pull a Musk and simply ignore the short-term incentives through force of will. It is in a company's long-term interest to keep their antibiotics working, so they can continue selling them. They could in principle do so by not patenting them, keeping them secret, and doling them out according to a vertically-integrated licensing scheme. If the problem is that companies follow the short-term incentives, changing the licensing scheme to 'public' is not going to help. The public officers will also follow the short-term incentives.

    Regardless, phages are superior in every meaningful way. Not only are they more specific, they automatically evolve when the bacteria does.

    Rather than phages being unprofitable due to lack of patents, rather phages are relatively unprofitable by comparison to patent monopolies. (Doubtless the FDA has made the effectively illegal on top of that.) Speaking of Musk ignoring short-term interests in favour of long-term ones, neither Tesla nor SpaceX file patents. It's been repeatedly shown patents do more harm than good.

    1. Could you explain further the damage done by patenting? I wasn't familiar with that before.

    2. Public choice theory would tell us that patents, intended to boost innovation, would hinder innovation.

      When studies are done, they find patents hinder innovation. "Surprisingly, this is true not only of NPE licenses [trolls] but even of licenses from product-producing companies and universities." In other words all patent-users are patent trolls.

      We see informal reports as well.

      And corroboration in the form of companies preferring to spend money buying patents rather than paying for new research.

      Which makes sense; reason pharma needs patent monopolies is rent-seeking by the FDA, which makes new drugs too expensive to market otherwise.

    3. I must admit that, from a vaguely-left accelerationist perspective, I find the idea that this form of intellectual property is slowing down (rather than aiding) innovation to be rather gratifying.