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Program completed as of 2003

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Malaria, Economics, and Human Affairs

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The Case for a Vaccine Purchase Fund

Researchers at CID have proposed that the international community should establish a Vaccine Purchase Fund designed to assure pharmaceutical firms of a market if they develop vaccines for tuberculosis, malaria, or AIDS, the world’s three most deadly infectious diseases.  No expenditures would be made from the fund until an effective vaccine was developed.  According to recent WHO estimates, these diseases account for about  5 million deaths worldwide per year, or 9% of all deaths.  The target for vaccines purchased by the fund will be children born each year in low income countries with high incidence of each disease. Assuming these vaccines are purchased for $10 - $40 dollars per protected child, and an estimated total of 160 million vaccine purchases are made, expenditures from the fund would amount to approximately $1.6 billion to $6.4 billion per year if vaccines against all three of these diseases are developed.  This of course would be a very small amount to save millions of lives. 

The late 20th century has been described as the second golden age of vaccines.  As a result of recent scientific advances, including, for example, sequencing of the genomes of the agents which cause TB and malaria, efforts to develop vaccines against these diseases in the near future are scientifically warranted.  Yet pharmaceutical firms conduct very little vaccine research for these diseases, anticipating that the potential market would not justify the hundreds of millions of dollars in necessary research and development expenditure. 

Markets are expected to be limited for two reasons.  First, these diseases largely affect poor countries; virtually all malaria infections and more than 95% of new tuberculosis and 95% and HIV infections occur in the developing world.  Second, governments and international organizations are typically monopoly purchasers of vaccines, and they use this power to insist on low vaccine prices.  Existing vaccines for developing country diseases are typically purchased at pennies per dose.  Pharmaceutical companies doubt that they would be able to sell vaccines to governments and international organizations at prices that would cover the research and development expenditures.

An effective strategy for combating these three diseases requires three components: better use of existing prevention, control, and treatment technologies; support for basic research conducted in the public sector and academic institutions, including the work which will form the basis for the applied work of vaccine development; and a commitment to private sector firms that if they succeed at the expensive applied work of developing a vaccine, they will have a market for their product.  

A Vaccine Purchase Fund could provide this critical third component.  A board representing donors would establish policies for future vaccine purchases.  Contributions to the Fund could take the form either of cash or of binding commitments to provide funds if and when an eligible vaccine was developed.  Contributions could be made over a number of years, according to an initially agreed timetable, so that the fund would build an endowment over time.
 

Download a description of the CID proposal (PDF)

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