NCPA - National Center for Policy Analysis


January 2, 2008

A new approach to vaccine development in poor countries, called the advance market commitment, involves donor countries committing to buy yet-to-be-developed vaccines in bulk for poor nations, if drug makers are able to deliver a product that meets specifications and a price settled on in advance, says the Wall Street Journal.

But while such commitments are more promising than some alternatives -- trying to bully drug makers into cooperating with global-aid agendas, for example, or paying them millions of dollars to chase long-shot solutions -- the theory behind them has some serious holes in it, says the Journal:

  • For one thing, drug companies may not be willing to bet their development budgets on these commitments; before a deal can be reached, drug makers, donors and recipient countries have to agree on a price and specifications for the vaccine.
  • Moreover, though advance market commitments were first conceived as a way to spur research and development of vaccines still at an early stage -- those for HIV, tuberculosis and malaria, for example, which remain years or even decades away from completion -- they may not be well suited for that.
  • And while the "pull" funding of the commitments isn't meant to replace research grants and other "push" funding, critics worry that other policy approaches could be shortchanged.

Further, Oxford University economist Andrew Farlow argues that the opportunity costs of an advance market commitment are too high.  Even if such arrangements save some lives, he says, they will peel away money and energy that could instead go to less-costly treatments for people already afflicted: "You may get your success story, but it's what you'll lose in the process that you might have had."  He and others say that more people would be helped by paying for things like measles immunizations, improved water quality and sanitation or mosquito nets in malarial regions.

Source: Nick Timiraos, "Why a Market-Driven Vaccine Plan Faces Big Obstacles," Wall Street Journal, December 31, 2007.


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