A Better Way to Spur Medical Research and Development
Posted: 28 Aug 2000
Competition pushes prices down toward the cost of producing goods, thus giving firms little incentive to invest in new ideas through research and development (R&D). Societies therefore use patents, prizes, and direct government funding to encourage investments in ideas. It is time to consider supplementing those mechanisms. In particular, programs to help create markets for vaccines against malaria, tuberculosis, and AIDS could harness the resources and expertise of the private sector in the fight against the world's worst infectious diseases while avoiding the inefficiencies associated with many government programs. Commitments to buy large quantities of vaccines could lead to the development and delivery of effective vaccines at low cost. Taxpayers would pay nothing unless and until such vaccines have been developed.
JEL Classification: I18, L51, O31
Suggested Citation: Suggested Citation