Working Paper: NBER ID: w7716
Authors: Michael Kremer
Abstract: Malaria, tuberculosis, and the strains of HIV common in Africa kill approximately 5 million people each year. Yet research on vaccines for these diseases remains minimal largely because potential vaccine developers fear that they would not be able to sell enough vaccine at a sufficient price to recoup their research expenditures. Enhancing markets for new vaccines could create incentives for vaccine research and increase accessibility of any vaccines developed. Private firms currently conduct little research on vaccines against malaria, tuberculosis, and the strains of HIV common in Africa. This is not only because these diseases primarily affect poor countries, but also because vaccines are subject to severe market failures. Government- directed research programs may be well-suited for basic research, but for the later, more applied states of research, committing to compensate successful private vaccine developers has important advantages. Under such programs, the public pays only if a successful vaccine is actually developed. This gives pharmaceutical firms and scientists strong incentives to self-select research projects that have a reasonable chance of leading to a vaccine. Committing to purchase vaccines and make them available to poor countries may also be attractive relative to other ways of rewarding vaccine developers.
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Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Advance Purchase Commitments (APC) (L14) | Incentives for Vaccine Research (O38) |
| Advance Purchase Commitments (APC) (L14) | Affordability of Vaccines (G52) |
| Public Purchases (H57) | Market Expansion for Vaccines (F69) |