Advanced Purchase Commitments for a Malaria Vaccine: Estimating Costs and Effectiveness

Working Paper No. 11288 To overcome the problem of insufficient research and development (R&D) on vaccines for diseases concentrated in low-income countries, sponsors could commit to purchase viable vaccines if and when they are developed. One or more sponsors would commit to a minimum price tha...

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Bibliographic Details
Published in:NBER Working Paper Series 2005-05, p.11288
Main Authors: Berndt, Ernst R, Glennerster, Rachel, Kremer, Michael R, Lee, Jean, Levine, Ruth, Weizsacker, Georg, Williams, Heidi
Format: Article
Language:English
Subjects:
Acquired immune deficiency syndrome
AIDS
Cost analysis
Developing countries
Economic theory
HIV
Human immunodeficiency virus
International organizations
LDCs
Low income groups
Malaria
Pharmaceutical industry
Prices
Product development
Public health
R&D
Research & development
Tuberculosis
Vaccines
Working groups
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Summary:Working Paper No. 11288 To overcome the problem of insufficient research and development (R&D) on vaccines for diseases concentrated in low-income countries, sponsors could commit to purchase viable vaccines if and when they are developed. One or more sponsors would commit to a minimum price that would be paid per person immunized for an eligible product, up to a certain number of individuals immunized. For additional purchases, the price would eventually drop to short-run marginal cost. If no suitable product were developed, no payments would be made. We estimate the offer size which would make the revenues from R&D investments on a malaria vaccine similar to revenues realized from investments in typical existing commercial pharmaceutical products, as well as the degree to which various contract models and assumptions would affect the cost-effectiveness of such a commitment for the case of a malaria vaccine. Under conservative assumptions, we document that the intervention would be highly cost-effective from a public health perspective. Sensitivity analyses suggest most characteristics of a hypothetical malaria vaccine would have little effect on the cost-effectiveness, but that the duration of protection against malaria conferred by a vaccine strongly affects potential cost-effectiveness. Readers can conduct their own sensitivity analyses employing a web-based spreadsheet tool.
ISSN:0898-2937
DOI:10.3386/w11288