The Economics of an HIV/AIDS Vaccine

Abstract

We survey the main economic aspects of the creation of an AIDS vaccine. We first describe the market conditions for this vaccine, and we show the critical importance of patents to start the costly R&D process. We then describe the main economic impediments to this venture, and the main financial mechanisms in place to alleviate them. We pinpoint their pitfalls, and we finally present novel mechanisms capable of restoring economic efficiency, and of providing greater incentives for investors to undertake R&D in this vaccine.

Keywords: HIV/Aids vaccine, R&D incentives, financial mechanisms, health underinvestment, patent protection

JEL Classification: I01, I03, G15