This is a joint post with Kate McQueston
November 12th is fast approaching and with it comes world pneumonia day. Unfortunately, pneumococcal diseases still pose an enormous global threat--remaining the leading cause of death for children worldwide and taking the lives of 1.4 million children under five years annually. What’s more—a staggering 98% of these children live in developing countries.
As the GAVI Alliance gears up for its pledging conference in June, a CGD panel reflected on progress and lessons learned in financing GAVI since 2001 and explored implications for the next decade. Speakers had first-hand experience in the design and implementation of the major vaccine financing instruments—Alice Albright, former CFO of GAVI; Michael Kremer, co-chair of CGD’s Advance Market Commitment (AMC) Working Group; Helen Evans and David Ferreira, GAVI; and Amie Batson, Deputy Assistant Administrator for Global Health at USAID. Key takeaways from the event are directly below, and a longer summary—with embedded video clips—is below that. You can also watch a full recording of the event here.
This weekend, children in Nicaragua received Advance Market Commitment (AMC)-financed pneumococcal vaccines that protect against the strains of pneumonia, meningitis and sepsis common in poor countries. Thanks in part to the AMC, the new and improved pneumo vaccines will reach the world's poorest children during the same year children in wealthy countries obtained access, and at a fraction of the price.
An article by Ann Danaiya Usher in the December 5 edition of the Lancet focuses on aspects of the Advance Market Commitment pilot for pneumococcal vaccine that appear to be causing confusion. The article is similar to one published by the author in Development Today, a publication that has issued a series of negative (or at least skeptical) pieces about the AMC over the past few years.
Over the last few years there have been a series of articles emphasizing how special the price of zero might be for consumers. In 2004 Michael Kremer and Ted Miguel published a CGD working paper (later published in the QJE) showing that eliminating altogether the price parents would have to pay for de-worming medicine for their children had an extraordinarily stimulating effect on uptake compared to even a very small non-zero price.
Four years after we published Making Markets for Vaccines laying out a way for donors to make a binding commitment to purchase a not-yet-developed vaccine, the pilot Advance Market Commitment has been launched at the G8 Finance Ministers' Pre-Summit Meeting in Lecce, Italy.
The global health community likes to throw around buzz phrases (the 10/90 gap) that point to one reality: inadequate R&D dollars for neglected diseases. While this situation has undoubtedly improved in the last decade, it is still undeniably the case, and it has led economists and others to think about plausible incentive and innovative financing mechanisms to attract industry for greater R&D investment for specific diseases.
Last week, Congress took a major step towards re-authorizing PEPFAR, and global malaria and TB programs, for another five years. A congressional press release explains:
Today's pledge by President Bush to invest $350 million in fighting Neglected Tropical Diseases (NTDs) over the next 5 years is one of the wisest investments we can make in combating poverty around the world. This is particularly true when children are mass treated for common diseases through schools. While development initiatives are often driven by sentiment, school based treatment of neglected diseases is backed by rigorous evidence.
