Strong Medicine

by Kremer, Michael

• ISBN13: 9780691121130
• ISBN10: 0691121133
• Format: Hardcover
• Copyright: 2004-09-07
• Publisher: Princeton Univ Pr

Summary

Millions of people in the third world die from diseases that are rare in the first world--diseases like malaria, tuberculosis, and schistosomiasis. AIDS, which is now usually treated in rich countries, still ravages the world's poor. Vaccines offer the best hope for controlling these diseases and could dramatically improve health in poor countries. But developers have little incentive to undertake the costly and risky research needed to develop vaccines. This is partly because the potential consumers are poor, but also because governments drive down prices. InStrong Medicine, Michael Kremer and Rachel Glennerster offer an innovative yet simple solution to this worldwide problem: "Pull" programs to stimulate research. Here's how such programs would work. Funding agencies would commit to purchase viable vaccines if and when they were developed. This would create the incentives for vaccine developers to produce usable products for these neglected diseases. Private firms, rather than funding agencies, would pick which research strategies to pursue. After purchasing the vaccine, funders could distribute it at little or no cost to the afflicted countries. Strong Medicinedetails just how these legally binding commitments would work. Ultimately, if no vaccines were developed, such a commitment would cost nothing. But if vaccines were developed, the program would save millions of lives and would be among the world's most cost-effective health interventions.

Table of Contents

Foreword	ix
Acknowledgments	xiii
1. INTRODUCTION	1	(5)
2. HEALTH IN LOW-INCOME COUNTRIES	6	(19)
The Disease Environment in Low-Income Countries	6	(1)
Weak Health-Care Infrastructure	7	(4)
Malaria, Tuberculosis, and HIV/AIDS	11	(9)
The Impact of Cheap, Simple Technologies	20	(5)
3. THE PAUCITY OF PRIVATE R&D TARGETED TO THE NEEDS OF LOW-INCOME COUNTRIES	25	(4)
The Extent of R&D Targeted to Low-Income Countries	25	(2)
The Scientific Potential for New Vaccines	27	(2)
4. MARKET AND GOVERNMENT FAILURES	29	(16)
Why Target Foreign Assistance to Vaccine R&D?	30	(3)
The Patent Tradeoff	33	(3)
Low-Income Countries and Intellectual Property	36	(4)
Social versus Private Return: Some Quantitative Estimates	40	(2)
The Role of Public Purchases	42	(3)
5. THE ROLE OF PUSH PROGRAMS	45	(10)
Meningococcal Meningitis: An Example of a Successful Push Program	46	(1)
A Cautionary Tale: The USAID Malaria Vaccine Program	47	(2)
Incentives under Push Programs	49	(6)
6. THE POTENTIAL ROLE OF PULL PROGRAMS	55	(13)
The Effect of Market Size on Innovation	55	(1)
The Impact of Financial Incentive Programs	56	(3)
Examples of Pull Programs Stimulating Research	59	(4)
Advantages and Limitations of Pull Programs	63	(5)
7. PULL PROGRAMS: A MENU	68	(8)
Commitments to Finance Purchase of Products and Patents	68	(2)
Patent Extensions on Other Pharmaceuticals as Compensation for Vaccine Development	70	(2)
Best-Entry Tournaments	72	(1)
Expanding the Market for Existing Vaccines and Drugs	73	(3)
8. DETERMINING ELIGIBILITY	76	(10)
Basic Technical Requirements	76	(2)
Independent Adjudication Committee	78	(3)
Market-Test Requirement	81	(3)
Exit Clauses	84	(2)
9. HOW MUCH SHOULD WE PROMISE TO PAY FOR A VACCINE?	86	(11)
What Market Size Is Needed to Spur Research?	86	(4)
Cost-Effectiveness: What Is a Vaccine Worth?	90	(7)
10. HOW SHOULD PAYMENT BE STRUCTURED?	97	(12)
Paying for Multiple Vaccines and Market Exclusivity	100	(3)
Bonus Payments Based on Product Quality	103	(2)
Increasing the Promised Price over Time	105	(1)
Avoiding Windfalls	106	(1)
Industry Consultations	107	(2)
11. SCOPE OF THE COMMITMENT	109	(6)
What Diseases to Cover?	109	(1)
Vaccines, Drugs, and Other Technologies	109	(3)
Incentives for Agricultural R&D	112	(3)
12. MOVING FORWARD WITH VACCINE COMMITMENTS	115	(12)
Making a Commitment Legally Binding	116	(2)
The Politics of Creating Markets for Vaccines and Drugs	118	(1)
Potential Sponsors of New Markets for Vaccines and Drugs	119	(8)
References	127	(18)
Index	145