When a Pennsylvania woman was recently found to carry a strain of E. coli that was resistant to colistin, an antibiotic of last resort, alarm bells went off in the medical community about the arrival of the first pan-drug resistant ‘superbug’ in the U.S. With few antibiotics in development, and doctors and patients continuing to overuse the drugs, the situation has become critical.

Ezekiel Emanuel, a renowned bioethicist who is vice provost for global initiatives and chair of the medical ethics and health policy department at the University of Pennsylvania, is offering two solutions: Require hospitals and outpatient clinics to join a government program that tracks antibiotics use, and offer a $2 billion prize to folks to develop new antibiotics.

He argues that the marketplace model – letting market forces boost the return on investment on antibiotics high enough to spur more development by drug companies – doesn’t work in this case and a new approach is needed. Emanuel, who is a medical doctor, also explains how hand sanitizers and other anti-bacterial products fit into the picture. He discussed his views in a recent op-ed piece in The Washington Post and also spoke about the issue on the Knowledge at Wharton show that airs on SiriusXM Channel 111.

Knowledge at Wharton: The case in Pennsylvania is bringing more focus on superbugs, but in terms of the severity of the situation, where does that sit?

Ezekiel Emanuel: In the case of this Pennsylvania woman, she had a gene that made her E. coli resistant to colistin, the antibiotic of last resort. In that context, this was newly found in human beings in the United States and a serious problem. But the bacteria she had was still resistant to at least one antibiotic, the carbapenem, a family of antibiotics. We didn’t have all the genes lined up in one bacteria.

What worries public health officials and medical people is when you get all those genes lined up in one bacteria and they’re resistant to colistin and carbapenems, then you really do have the superbug that everyone’s worried about because there’s not another antibiotic that will actually fight this infection. We’ll basically have thrown ourselves back into the 19th century where we didn’t have antibiotics for bacteria, and people died of these bacterial infections quite commonly.

That’s the horror scenario that people are worried about. Is that going to happen tomorrow? No. But is it almost inevitably going to happen in the next few years? Yes. And that’s what’s worrying everyone.

Knowledge at Wharton: What is the probability of all of those genes lining up?

Emanuel: I can’t quantify what the modeling shows. But the fact that all those genes are circulating out there does mean it’s almost inevitably going to happen at some point. What we have is no antibiotics in isolation and very good infection control procedures, but that’s very different than having an antibiotic that can fight the infection. I think that’s what worries people.

“We’ll basically have thrown ourselves back into the 19th century where … people died of these bacterial infections quite commonly.”

Knowledge at Wharton: That gets into one of the main themes of your piece in The Washington Post, which is that the medical community and maybe even the government need to consider what those next antibiotics are going to be.

Emanuel: We really have to attack these problems at two levels. One is to try to prevent bacteria from becoming antibiotic-resistant by using our antibiotics much, much more wisely than we have over the last 50 years.

The second is, we really do have to develop a lot of new antibiotics. Not just for a short period. We don’t have to go into a sprint mode. This is a long-term problem. Bacteria are constantly evolving. They will constantly evolve. We’ll get an antibiotic, they’ll find a way to be resistant, we’re going to have to get more antibiotics. This is a marathon for the rest of human existence to try to find more and more antibiotics.

Doctors have been, I would say, not as responsible as we should be on the use of antibiotics. We often use the wrong antibiotics; we use them in cases that are viral infections or in the cases of self-limited bacterial infections. We know from research by the Centers for Disease Control and Prevention as well as others that somewhere between 20% and 50% of antibiotic prescriptions, both in the hospital and in the outpatient setting, are either inappropriate or unnecessary.

We had a recent article in the Journal of the American Medical Association that showed one-third of antibiotic prescriptions out of physicians’ offices were inappropriate or unnecessary. It should be shocking.

Knowledge at Wharton: How do you curb this unnecessary use of antibiotics? How do you police that?

Emanuel: It’s easier to police in a hospital because it’s a confined area and you really do have control over all those prescriptions much more directly. The CDC has developed this antibiotic stewardship program that starts with the leadership in the hospital as well as appointing someone, a pharmacist usually, to be the point person to oversee this.

It develops data and gives the data back to physicians about their own antibiotic prescription use and the resistance that they’re developing — someone independent reviews every antibiotic prescription. Those processes are well-defined and can be implemented by every hospital.

Knowledge at Wharton: How prevalent are these programs?

Emanuel: I don’t know the percentage of hospitals that have adopted them, and that actually goes to the heart of my suggestion in the article I wrote, which is that we just have to make them mandatory. There is an easy way for the government to make them mandatory.

Government has rules called “the Requirements for Participation in Medicare.” If you’re a hospital and you get Medicare payments, there are certain things you have to do. This could be one of them. Antibiotic stewardship procedures have to be implemented in your hospital, and you have to report the results back to Medicare every year. It seems to me that’s something we ought to do. It’s good for patients, it’s good for the community, and it saves hospitals money, which means it saves all of us money.

“Is that going to happen tomorrow? No. But is it almost inevitably going to happen in the next few years? Yes.”

Knowledge at Wharton: It’s almost a little bit like a job review for the doctors themselves. Obviously, a lot of doctors are so busy going from patient to patient, they probably don’t think about it a lot. But if you see on paper the percentage of times that you are diagnosing antibiotics, you can see firsthand whether there’s a problem.

Emanuel: I totally agree with you, and I think it actually uses the principles of behavioral economics to help doctors. It provides them with immediate information feedback, and typically, if you rank them or show them how they compare to their peers in this situation, you will get the bottom improving. And that’s really what we want to have happen.

Knowledge at Wharton: But you say that now is as good a time as ever to try to do something like that and even advance what we have already because the medical community has made the switch to digital records.

Emanuel: Hospitals have electronic order entry, so when doctors electronically write a prescription, it can be automatically reviewed. But I think we need to not just do it in the hospital. We have to do it in the outpatient setting also. Having every prescription reviewed electronically doesn’t mean that there aren’t good cases that can be overridden, but we do have to have a situation where, to put it bluntly, we can’t trust that every prescription written is appropriate and necessary.

The data suggests that [it’s falsely used] … at a sufficiently high rate that, to protect the community, we need to intervene and have a check on all those antibiotic prescriptions. Many of them are, ‘I’ve got a runny nose, I’ve got a sore throat, it hasn’t gotten better in two days. Doctor, can you write me a prescription?’ A high percentage of those are viral cases. They ought not to get a prescription, and yet doctors write them.

“Somewhere between 20% and 50% of antibiotic prescriptions … are either inappropriate or unnecessary.”

And then patients go ahead and take only some of the antibiotics because by day four or five, they’re feeling better. Why finish the antibiotics? We have increasingly good evidence that taking antibiotics is probably, when necessary, perfect. But when not necessary, it’s not good for the microbiome of the gut and many other things. All of us, the public as well as the medical community, need to be much more prudent about using antibiotics.

Knowledge at Wharton: Could you talk about the price of antibiotics and why that’s a reason why we aren’t seeing development of new antibiotics?

Emanuel: If you’re a drug company executive, and you look at where you could spend your research and development dollars, some of them, obviously, are historical. You’ve got strengths in vaccines or in cancer, and you’re going to use those strengths. But some of them are clearly market-driven by how much money you can earn from the research and development.

On average, it costs between $500 million and $1 billion to bring a drug to market, including failures. Now, if you can earn, say $5,000 for an antibiotic, or you could earn $100,000 or $150,000 for an anti-cancer drug or some drug for multiple sclerosis, you don’t have to be a genius to say, “Well, it’s going to be a lot more lucrative to do the cancer drug. If the development costs are similar, I’d rather do the cancer drug.” Especially if what you’re developing is the last resort antibiotic, which everyone’s going to use rarely. Your returns on investment are going to be really low.

It’s a situation where low prices of drugs, ironically enough, are actually inhibiting the development of drugs. I take an antibiotic, it’s going to save my life. I take an anti-cancer drug, it’s going to give me six to eight months maximum. Yet I’m willing to pay $100,000 for those six or eight months, but I’m not willing to pay $100,000 or $50,000 or some large number for that antibiotic? It makes no sense to me in terms of how much do I value my life. But that actually is the behavior we see out in the marketplace.

Knowledge at Wharton: It’s a tough conversation not only for that person to deal with but the family members as well. You also laid out in the article that it’s not only the cost of the drugs but the number right now that are in development.

Emanuel: Piddling! About 836 cancer drugs are in human trials — that means they’re in safety or efficacy trials — and 37 in antibiotics. It’s a joke. It’s terrible. We need hundreds of antibiotics in development. Not all of them are going to make it through, so you need to start that pipeline and have a very, very robust pipeline. And that’s just not happening.

“On average, it costs between $500 million and $1 billion to bring a drug to market, including failures.”

Knowledge at Wharton: What role can the government play in this process?

Emanuel: I’ve suggested that we try to move off the marketplace model for antibiotic development — it clearly doesn’t work — and try to go to a prize model where the U.S. government gets together with governments from a bunch of other developed countries like Australia, New Zealand, Japan, South Korea, the European Union, Canada. Let’s all contribute in proportion to our population, or some formula, and let’s create prizes.

I suggested $2 billion, which is a big return if it takes a billion to develop. Then it’s a collective good, and we can use them sparingly. We can decide how to charge for them. I think that’s a really important, different approach.

Is it going to work? Well, I know one thing: the current approach is not working, and we are all threatened because it’s not working. Two billion dollars might sound like a lot of money, but let’s put it in context. Twenty billion dollars is what we spend in the United States alone per year on treating antibiotic-resistant infections. So, $2 billion is just 10% of that. If we get all these countries together and contribute, the actual price tag is pretty low.

I’m not the first person to think about prizes. In history, we have a lot of good examples. Napoleon wanted food preserved for his soldiers. He put out a prize, got someone who figured out how to sterilize, in that case it was a glass jar, to preserve meats and vegetables. We know that Netflix offered a prize, got lots of people who weren’t actually in the field to begin participating in developing algorithms. I think we need to be creative.

Knowledge at Wharton: Are people getting overexposed to antibiotics through their household cleaners and hand washes?

Emanuel: Most of those hand sanitizers, the Purells of this world, don’t use antibiotics. They use an alcohol compound. They have now become ubiquitous, but [in their own way they’re also contributing to] antibiotic resistance. What they are doing is reducing the bacteria that are out there that people come in contact with every day, and that is a problem.

“About 836 cancer drugs are in human trials — that means they’re in safety or efficacy trials — and 37 in antibiotics. It’s a joke.”

The hygiene hypothesis is a hypothesis that people need to be exposed to viruses and bacteria because that actually regulates the immune system. It’s especially important in young kids. We should not over-clean ourselves and sterilize every time you touch a baby. I mean, we were raised on farms and in the savannah where we were coming in contact with bacteria, and we know that kids who don’t actually see a lot of viruses and bacteria as they’re growing up are more likely to have allergies, auto-immune diseases, develop things like multiple sclerosis.

So, that’s my problem with the hand sanitizers. It’s not because they breed antibiotic resistance, but they do create the situation where you’re not seeing enough bacteria and viruses. For a long time, we have said bacteria is bad. They kill us and we need to fight them. That’s how the over-prescribing of antibiotics happened. The flip side is we now know they’re not so bad. We actually need bacteria.

Knowledge at Wharton: Which do you think is a greater possibility — at least in the short term — the government will say, ‘if you want to be part of Medicare, you need to start doing the medical records checkups’ or some pharmaceutical companies developing more antibiotics?

Emanuel: I think a little bit of both. Making it a requirement that you have to have this stewardship program to participate in Medicare is something that can happen, and I’m hoping the new administration will do it. The flip side is there are some drug companies going into more antibiotic production. But even if we went up to 50 or 60 antibiotics in development, that’s far short of the hundreds we need in development and getting approval.

We clearly have the capacity; we clearly have the brains. It would be a boon to the biotech industry if we had these kind of prizes, and they could work at developing solutions. Again, the current system isn’t working. Unless someone comes up with a really bright alternative, I think it’s a serious problem.