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http://ssrn.com/abstract=696741
 
 

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Advanced Purchase Commitments for a Malaria Vaccine: Estimating Costs and Effectiveness


Ernst R. Berndt


Massachusetts Institute of Technology (MIT) - Sloan School of Management; National Bureau of Economic Research (NBER)

Rachel Glennerster


Massachusetts Institute of Technology (MIT) - Department of Economics

Michael Kremer


Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER); Center for Global Development

Jean Lee


Harvard University

Ruth Levine


Center for Global Development

Georg Weizsacker


Humboldt University Berlin; DIW Berlin

Heidi Williams


MIT Department of Economics; National Bureau of Economic Research (NBER)

April 1, 2005



Abstract:     
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.

Number of Pages in PDF File: 29

Keywords: Advance purchase commitment, R&D, pharmaceuticals, vaccines, malaria

JEL Classification: I18, O19, O31, O38

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Date posted: April 6, 2005  

Suggested Citation

Berndt, Ernst R. and Glennerster, Rachel and Kremer, Michael and Lee, Jean and Levine, Ruth and Weizsacker, Georg and Williams, Heidi, Advanced Purchase Commitments for a Malaria Vaccine: Estimating Costs and Effectiveness (April 1, 2005). Available at SSRN: http://ssrn.com/abstract=696741 or http://dx.doi.org/10.2139/ssrn.696741

Contact Information

Ernst R. Berndt (Contact Author)
Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )
Room E52-452
Cambridge, MA 02142
United States
617-253-2665 (Phone)
617-258-6055 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Rachel Glennerster
Massachusetts Institute of Technology (MIT) - Department of Economics ( email )
E53-320
77 Massachusetts Avenue
Cambridge, MA 02139
United States
Michael Kremer
Harvard University - Department of Economics ( email )
Littauer Center
Rm. 207
Cambridge, MA 02138
United States
Brookings Institution
1775 Massachusetts Ave. NW
Washington, DC 20036-2188
United States
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Center for Global Development
2055 L St. NW
5th floor
Washington, DC 20036
United States
Jean Lee
Harvard University ( email )
Cambridge, MA 02138
United States
Ruth Levine
Center for Global Development ( email )
1750 Massachusetts Avenue, NW
Washington, DC 20036-1903
United States
Georg Weizsacker
Humboldt University Berlin ( email )
Spandauer Str. 1
Berlin, D-10099
Germany
DIW Berlin
Mohrenstr. 58
Berlin
Germany
Heidi Williams
MIT Department of Economics ( email )
50 Memorial Drive
E52-391
Cambridge, MA 02142
United States
(617) 324-4326 (Phone)
(617) 253-1330 (Fax)
HOME PAGE: http://econ-www.mit.edu/faculty/heidiw
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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