Important note: Information in this article was accurate in 2005. The state of the art may have changed since the publication date.
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Wall Street Journal - April 7, 2005
Marilyn Chase at marilyn.chase@wsj.com
Pharmaceutical companies that fled the high-risk, low-margin vaccine field could be lured back with "advance purchase contracts," according to a report scheduled to be released today by the Center for Global Development. The contracts would be offered by pools of donors who would guarantee that they'd buy a volume of doses at near-market prices.
The funding tool could help save millions of lives, the report says. Its authors -- a working group representing the industry along with legal, nonprofit, academic and policy-making sectors -- say the advance contracts could be a cure for market failure that has deprived poor countries of desperately needed vaccines or delayed their distribution for decades. The report was underwritten by the Bill and Melinda Gates Foundation of Seattle.
Currently, only 10% of global R&D is targeted toward diseases that affect 90% of the world's population, the report said. Health spending in the poorest countries runs about $17 per person a year, compared with over $2,200 in high-income countries -- ensuring that most of R&D is focused on ailments found in richer nations.
But if groups of donors band together in advance to guarantee sales of a set volume of vaccines at near-market prices, the report argues that this would encourage companies to invent vaccines for diseases such as AIDS , TB and malaria.
There is no current vaccine for malaria, a disease killing over one million people a year. The report says donors could initially guarantee a manufacturer a price of $15 a person for a three-shot immunization for the first 200 million people immunized, for a market of about $3 billion. After that, the company would promise to drop the price to $1 or $1.50 a person. Such a program, while pleasing companies, could still create a malaria-prevention program that would be very cost-effective, advocates say. The vaccine might be distributed to countries by a variety of nongovernmental or multinational aid groups.
Companies are cautiously optimistic about the untested plan. Several companies are working on experimental malaria vaccines, some under sponsorship of the nonprofit Malaria Vaccine Initiative, also funded by the Gates Foundation. In a test reported last fall, an experimental vaccine by a unit of GlaxoSmithKline PLC reduced severe deadly cases by about 58%.
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