ABSTRACT
This chapter examines how changes in policies oriented toward suppliers of antibiotics, particularly drug companies, might be able to control antibiotic resistance. These policies include expansion of patent protection, loosening of antitrust restrictions, easing regulatory hurdles to drug approval, and rewards for the discovery of new antibiotics. Two important new lessons are, first, that there are important trade-offs between demand-side and supply-side policies. Second, solutions must be tailored to the level of the externality. For example, if use of one antibiotic generates resistance to another antibiotic, not necessarily in the same chemical class, it is important to define or permit a single property right to cover both antibiotics.
