EconPapers    
Economics at your fingertips  
 

Advance market commitments for vaccines against neglected diseases: estimating costs and effectiveness

Ernst R. Berndt, Rachel Glennerster, Michael R. Kremer, Jean Lee (), Ruth Levine, Georg Weizsäcker and Heidi Williams ()

Health Economics, 2007, vol. 16, issue 5, 491-511

Abstract: The G8 is considering committing to purchase vaccines against diseases concentrated in low‐income countries (if and when desirable vaccines are developed) as a way to spur research and development on vaccines for these diseases. Under such an ‘advance market commitment,’ one or more sponsors would commit to a minimum price to be paid per person immunized for an eligible product, up to a certain number of individuals immunized. For additional purchases, the price would eventually drop to close to marginal cost. If no suitable product were developed, no payments would be made. We estimate the offer size which would make revenues similar to the revenues realized from investments in typical existing commercial pharmaceutical products, as well as the degree to which various model contracts and assumptions would affect the cost‐effectiveness of such a commitment. We make adjustments for lower marketing costs under an advance market commitment and the risk that a developer may have to share the market with subsequent developers. We also show how this second risk could be reduced, and money saved, by introducing a superiority clause to a commitment. Under conservative assumptions, we document that a commitment comparable in value to sales earned by the average of a sample of recently launched commercial products (adjusted for lower marketing costs) would be a highly cost‐effective way to address HIV/AIDS, malaria, and tuberculosis. Sensitivity analyses suggest most characteristics of a hypothetical vaccine would have little effect on the cost‐effectiveness, but that the duration of protection conferred by a vaccine strongly affects potential cost‐effectiveness. Readers can conduct their own sensitivity analyses employing a web‐based spreadsheet tool. Copyright © 2006 John Wiley & Sons, Ltd.

Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

Downloads: (external link)
https://doi.org/10.1002/hec.1176

Related works:
Working Paper: Advance Market Commitments for Vaccines Against Neglected Diseases: Estimating Costs and Effectiveness (2006) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:hlthec:v:16:y:2007:i:5:p:491-511

Access Statistics for this article

Health Economics is currently edited by Alan Maynard, John Hutton and Andrew Jones

More articles in Health Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2025-03-20
Handle: RePEc:wly:hlthec:v:16:y:2007:i:5:p:491-511