Chapter 2: Promoting vaccine development by bringing in private investment

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Chapter at a glance

  • The development of a new medicine depends on the work of scientists based in academic, government and private research institutions, focusing on challenges that range from understanding a particular type of immune response to determining what type of packaging will maintain the viability of heat-sensitive products.
  • Commercial investment is complemented in essential ways by public and philanthropic funding, which is especially important for the basic science and early-stage research on which pharmaceutical development depends. But the most expensive, later stages of vaccine development'such as clinical testing, regulatory approval, production and distribution?are mainly the result of private sector investment.
  • For drugs and vaccines that are produced for populations in affluent countries, the single largest source of funding for R&D is commercial investment.
  • R&D on products that address health problems in developing countries receives neither the level nor the type of funding that health problems in developed countries receive. Of more than $100 billion spent on health R&D across the world, only about $6 billion is spent each year on diseases of developing countries, almost all of which is from public and philanthropic sources. There is little commercial investment because the market is not large enough to provide financial returns to cover the costs.
  • A number of different approaches can be used to make investments in neglected diseases more attractive? and some have already been tried in a limited context and have demonstrated a positive effect.
  • An advance market commitment would have important benefits:
  • First, it would mobilize additional resources, particularly for the clinical testing phases of development.
  • Second, strong market incentives would mobilize the ingenuity, energy, intellectual assets and managerial capacity of the pharmaceutical sector?from biotechs to multinational firms.
  • Third, it would allow public sector and philanthropic funders to stand at arm's length from complex scientific choices and tradeoffs, allowing firms to make their own judgments about the scientific feasibility and risks of alternative strategies.
  • Fourth, it would pay only for results, providing sponsors with the assurance that large-scale funding would be provided if and only if an effective and safe product that is appropriate for the developing world is manufactured in large enough quantity to meet demand.
  • Finally, such an arrangement would speed up access to vaccines when they are developed, and would ensure long-term sustainable and affordable supply.

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