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Washington PostToday's Washington Post has a very interesting piece on the economics of vaccine development.

"What's going on now is an attempt to bridge this gulf -- to harness the capitalist incentives that drive the drug companies and make them work for the world's poorest people, while preserving the idealism at the heart of the field of public health. It is a grand experiment, and while preliminary signs suggest it could work, the case is far from proven.

...Much of the difficulty, it turned out, was with the public-health community: Hobbled by spotty funding and poor strategic planning, health advocates couldn't forecast how much of a given vaccine they would be able to buy for the poor countries. In the face of uncertain demand, companies would hesitate to spend extra millions to build big factories, scaling their plants only for the industrial world. In these smaller plants, the companies would never achieve the economies of scale needed to drive production costs down, which meant they couldn't afford to sell their vaccines to poor countries at low prices.

..."I still go to meetings where people will say to me, 'We have to lobby the companies to lower their prices,' " said Orin Levine, a public-health doctor at Johns Hopkins University who heads a Gates-backed initiative for pneumonia vaccines. "I say, 'You can lobby them till the cows come home. What we really need to do is help them build a convincing business case that they should be in this market.' "

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CGD blog posts reflect the views of the authors drawing on prior research and experience in their areas of expertise. CGD does not take institutional positions.