Debate: "Making Markets for Vaccines"

[]

[]

[]

[]

Is the idea of "making markets for vaccines" a good one?

Background and context

The primary challenge to vaccine development is economic. Vaccines do not provide more than 6% of the total revenue at any of the major pharmaceutical companies still making and selling them. Pharmaceutical companies are businesses, not public-health agencies, and vaccines are not a lucrative business. Unfortunately, the diseases that are most in need of a vaccine, such as HIV, malaria and tuberculosis, exist mainly in poor African countries. In the past, most vaccine development has relied on ‘push’ funding by government agencies, universities and non-profit organizations. Today, based on a plan first proposed by Harvard scholar Michael Kremer, many researchers and policymakers are arguing for a different approach; a ‘pull’ mechanism to motivate industry. Under this approach, the United States and other rich countries would promise in advance to buy millions of doses of a new vaccine for use in the developing world, thereby creating an incentive for private companies to invest in research and development (R&D), testing, and production. A recent Center for Global Development report concluded that an advance market commitment of about $3 billion per disease would be enough to prompt private biotech and pharmaceutical firms to invest in R&D and production of vaccines for developing countries. It is an open question whether world leaders are getting good advice on how best to fund the development and delivery of new vaccines. The United States has not taken a firm stand on whether to participate in an advance market commitment.

[]

[]

[]

[]

Argument #1

[]

Yes

Examples of new medicines in rich countries demonstrate that if the market is sufficiently valuable, there will be commercial investment in R&D. It costs billions of dollars of investment in order to place a new drug in the hands of doctors. This is because dozens of promising approaches have to be investigated, at a cost of millions each time, in order for one of them to prove effective, safe and worth taking through demanding and expensive testing procedures. Because “western” conditions such as high cholesterol, cancer and diabetes offer a lucrative market, drugs companies have produced many new drugs to meet this rich world demand. An advance market commitment to buy millions of doses of new vaccines would similarly provide an incentive to drugs companies to invest in research relevant to the needs of the developing world. And only developed world governments such as the United States have the money and the credibility to provide such a guarantee.

[]

No

A non-profit model is a more cost-effective approach for the development of all drugs and vaccines. Making advanced commitments is not a sound policy decision for the United States. Such commitments favor large pharmaceutical firms, delay saving lives, spend donations wastefully, and reward secrecy rather than the sharing of information. An advanced commitment is unlikely to induce much basic research to discover new, effective vaccines. In contrast, direct funding of research, such as the Gates Foundations’ initiatives, is faster and much cheaper than multi-billion dollar promises of future purchases.

[]

[]

[]

[]

[]

Argument #2

[]

Yes

Under an advance market commitment policy, politicians are responsible for specifying the policy goals but do not control all the research mechanisms. Firms themselves can decide which R&D approaches are most promising to achieve the goal. These investments have the potential for high returns and low risks of corruption and appropriation. Furthermore, funding is tied directly to results: if the commitment does not succeed, there is not cost to the sponsors. Finally, researchers are free of the political meddling with has marked the Bush Administration’s approach to funding medical research (e.g. over stem cells, “morning after” contraception, etc.)

[]

No

There will not be enough incentives for subsequent innovation and competition once any initial breakthrough has been made. Developing country suppliers will also be excluded from the market, despite their ability to produce and supply a given drug much more cheaply. Instead, R&D should be funded entirely through public-private partnerships and non-profit research groupings, including developing world firms, without seeking to encourage commercialisation by the prospect of a market.

[]

[]

[]

[]

[]

Argument #3

[]

Yes

An advance market commitment would ensure that funds are available to buy the vaccines when they are developed. It could be structured to guarantee that after the pre-determined number of doses has been purchased at a price that rewards the innovating company, the price would fall to a sustainable level in the long run. Making a commitment in advance to buy vaccines would also create incentives for industry to increase investment in R&D. New commercial investment would complement funding by public and charitable bodies, accelerating the development of vaccines vital to Africa.

[]

No

Even if future commitments to buy are made, there is no assurance that those in greatest need of vaccines will have equal access to them. Many barriers exist to making practical markets for vaccines in Africa, such as the current inequality of access and Africa’s inefficient public-health infrastructure. Before advanced commitments prove effective, there must be a high-level political commitment to monitor the distribution of the vaccines. This presents a further, significant cost to the United States.

[]

[]

[]

[]

[]

Argument #4

[]

Yes

There are very few examples of successful pharmaceutical development based solely on public funding, without any contribution from commercial investment by the private sector. Therefore, at the very least, a mix of private and public funding is required.

[]

No

An advance market commitment program will produce not the best drugs that money can buy, but those that are quickest and least expensive to bring to market. Further, vaccines take about a decade to develop. Specifications set by drug and health regulators may prove to be unrealistic at the time the drug is actually used.

[]

[]

[]

[]

[]

Argument #5

[]

Yes

Even if the market approach does not work as well as expected, the United States has the opportunity to leave a historic legacy. By creating arrangements that devote the same scientific effort to diseases of the poor as we put into diseases of the rich, we can make a lasting contribution to the defeat of poverty in Africa.

[]

No

But the advanced commitment approach will fail. The point is that this arrangement will not create the same scientific effort for the poor as for the rich, but a different approach that everyone consciously knows is for the poor—and is treated as such. Second-class research will not attract the best minds, nor the best efforts of the pharmaceutical companies.

[]

[]

[]

[]

[]

Argument #6

[]

Yes

If American children were dying at the same rate as African children (the size of an average sized high school every hour) we would be devoting serious resources to finding a cure immediately. Vaccines represent the best hope for large, rapid and affordable improvements in health in Africa.

[]

No

There are many illness and disease-based causes of death of African children. HIV/AIDs, malaria, tuberculosis, etc. Addressing one of those scourges leaves the others unaddressed. Furthermore, these diseases are the symptoms of bigger structural problems, such as war, famine, bad government, overpopulation, poor access to clean water and sanitation, lack of respect for women, and restricted opportunities for economic development. If we were serious about helping African children we would seek political solutions for these challenges.

[]

[]

[]

[]

Argument #7

[]

Yes

Adequate investment in global public goods should be a cornerstone of foreign assistance. By definition, we all benefit from global public goods and share responsibility to see that they are properly funded and available to all. Participation and leadership in such a multilateral effort would demonstrate the United States’ commitment to global development and concern for the poorest. Such “soft diplomacy” could also advance the image and policy objectives of the USA in other areas.

[]

No

Pharmaceutical drugs are not global public goods but rather private intellectual property. Without the financial incentives for research and development they would not exist in the first place. Better patent protection for new drugs in developing countries would create a stronger incentive for multinational pharmaceutical companies.

External links

• [www.CGDev.org Center for Global Development]
• [www.GlobalizationAndHealth.com Globalization and Health]
• National Institute for Health
• Liberty Page
• San Francisco Chronicle Article: How to create a market for vaccines
• Advance Market Commitments for Vaccines against neglected diseases
• G8 Finance Ministers statement

Books

• Making Markets for Vaccines: Ideas to Action : Owen Barder
• The Grand Challenge for the Future: Vaccines for Poverty-Related Diseases from Bench to Field : Stefan H.E. Kaufmann (Editor)
• Strong Medicine: Creating Incentives for Pharmaceutical Research on Neglected Diseases : Michael Kremer