Strong Medicine: Creating Incentives for Pharmaceutical Research on Neglected Diseases

Prevalence of infectious diseases such as malaria, tuberculosis and HIV/AIDS, has long been a stringent issue for the low-income countries. Yet, barely 1% of global expenditure on pharmaceuticals goes into the research and development (R&D) of products for diseases affecting 90% of the world’s population.* Why? It is because advanced countries have been developing pharmaceuticals that target on the rich markets. Most research on HIV vaccines, for instance, is aimed at the strain of the virus common in rich countries.

One major factor firms are reluctant to invest in vaccine R&D is the small size of markets in the third world. Although the social value of a vaccine is hefty, the returns of vaccine R & D targeting at the poor countries can hardly cover the costs.

The authors provide the policy measures and incentives that will encourage vaccine R&D. That is, organizations such as governments or R&D sponsors will commit in advance to purchase successful vaccines. Then the purchase of vaccines would allow sponsors to distribute the vaccine at little or no cost to the afflicted countries. In addition, the authors detail various ways on how to make the vaccine commitment legally binding, as well as how funding of vaccine R&D should be allocated, and what price should be paid.

Both authors are leading economists in the field. Their style and presentation in the book are well accessible to the average reader in academic and practical settings. In particular, the book is highly recommended to those who are interested in the international public health.

* Source: < http://www.who.int/intellectualproperty/submissions/Farlow.pdf >