Title: Advanced purchase commitments for a malaria vaccine
Description: "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"--National Bureau of Economic Research web site.
Subjects: Malaria vaccine, Finance, Medical care
Places: Developing countries