TY - JOUR AU - Berndt,Ernst R. AU - Glennerster,Rachel AU - Kremer,Michael R. AU - Lee,Jean AU - Levine,Ruth AU - Weizsacker,Georg AU - Williams,Heidi TI - Advanced Purchase Commitments for a Malaria Vaccine: Estimating Costs and Effectiveness JF - National Bureau of Economic Research Working Paper Series VL - No. 11288 PY - 2005 Y2 - May 2005 UR - http://www.nber.org/papers/w11288 L1 - http://www.nber.org/papers/w11288.pdf N1 - Author contact info: Ernst R. Berndt MIT Sloan School of Management 100 Main Street, E62-518 Cambridge, MA 02142 Tel: 617/253-2665 Fax: 617-227-0880 E-Mail: eberndt@mit.edu Rachel Glennerster Abdul Latif Jameel Poverty Action Lab MIT Department of Economics E60-275 Cambridge MA 02139 Tel: 617 324 0098 E-Mail: rglenner@mit.edu Michael Kremer Harvard University Department of Economics Littauer Center M20 Cambridge, MA 02138 Tel: 617/495-9145 Fax: 617/495-7730 E-Mail: mkremer@fas.harvard.edu Jean Lee Harvard University E-Mail: jean.nahrae.lee@gmail.com Ruth Levine Georg Weizsacker Heidi L. Williams MIT Department of Economics 50 Memorial Drive Building E52, Room 274C Cambridge MA 02142-1347 Tel: 617/324-4326 E-Mail: heidiw@mit.edu AB - To overcome the problem of insufficient research and development (R&D) on vaccines for diseases concentrated in low-income countries, sponsors could commit to purchase viable vaccines if and when they are developed. One or more sponsors would commit to a minimum price that would 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 short-run marginal cost. If no suitable product were developed, no payments would be made. We estimate the offer size which would make the revenues from R&D investments on a malaria vaccine similar to revenues realized from investments in typical existing commercial pharmaceutical products, as well as the degree to which various contract models and assumptions would affect the cost-effectiveness of such a commitment for the case of a malaria vaccine. Under conservative assumptions, we document that the intervention would be highly cost-effective from a public health perspective. Sensitivity analyses suggest most characteristics of a hypothetical malaria vaccine would have little effect on the cost-effectiveness, but that the duration of protection against malaria conferred by a vaccine strongly affects potential cost-effectiveness. Readers can conduct their own sensitivity analyses employing a web-based spreadsheet tool. ER -