From the article:
"The idea has been fleshed out by Harvard's Michael Kremer and by economists at the Centre for Global Development in Washington. Kremer's research has shown that even at $40 per immunised person, vaccines against malaria and HIV would be cost-effective in poor countries.
But because private firms don't expect to receive even a tenth of that amount in the form of revenue from those countries, they have no incentive to develop vaccines. Kremer argues that governments or private foundations can step in, make an advance commitment to purchase a certain quantity at a particular price, if it were invented. The commitment would be binding, with strict stipulations and requirement of quality control.
The pre-committed buyer could then make the vaccine available to developing countries in return for payments the country can bear. Essentially, the model transfers the risk from the company (which does not want to lose profits) and countries (which don't want to miss out on medicines) to an intermediary who can afford to absorb the risk. "This is highly cost-effective relative to other health programmes," Kremer writes in an academic paper clarifying his concept. Such a purchase commitment "would be highly cost-effective even if it covered vaccines that departed significantly from the ideal," he adds."