Financing Vaccines for Global Health Security

38 Pages Posted: 11 May 2020

See all articles by Jonathan Vu

Jonathan Vu

Warren Alpert Medical School

Benjamin Kaplan

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Shomesh Chaudhuri

Massachusetts Institute of Technology

Monique K Mansoura

The MITRE Corporation

Andrew W. Lo

Massachusetts Institute of Technology (MIT) - Sloan School of Management; National Bureau of Economic Research (NBER); Massachusetts Institute of Technology (MIT) - Computer Science and Artificial Intelligence Laboratory (CSAIL)

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Date Written: May 8, 2020

Abstract

Recent outbreaks of infectious pathogens such as Zika, Ebola, and COVID-19 have underscored the need for the dependable availability of vaccines against emerging infectious diseases (EIDs). The cost and risk of R&D programs and uniquely unpredictable demand for EID vaccines have discouraged vaccine developers, and government and nonprofit agencies have been unable to provide timely or sufficient incentives for their development and sustained supply. We analyze the economic returns of a portfolio of EID vaccine assets, and find that under realistic financing assumptions, the expected returns are significantly negative, implying that the private sector is unlikely to address this need without public-sector intervention. We have sized the financing deficit for this portfolio and propose several potential solutions, including price increases, enhanced public-private partnerships, and subscription models through which individuals would pay annual fees to obtain access to a portfolio of vaccines in the event of an outbreak.

Keywords: vaccines fund, emerging infectious diseases, healthcare finance

JEL Classification: I11, I18, G11,G12

Suggested Citation

Vu, Jonathan and Kaplan, Benjamin and Chaudhuri, Shomesh and Mansoura, Monique K and Lo, Andrew W., Financing Vaccines for Global Health Security (May 8, 2020). Available at SSRN: https://ssrn.com/abstract=3595881 or http://dx.doi.org/10.2139/ssrn.3595881

Jonathan Vu

Warren Alpert Medical School ( email )

Providence, RI 02912
United States

Benjamin Kaplan

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
Cambridge, MA 02142
United States

Shomesh Chaudhuri

Massachusetts Institute of Technology ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Monique K Mansoura

The MITRE Corporation ( email )

7515 Colshire Blvd.
McLean, VA 22102
United States

Andrew W. Lo (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-618
Cambridge, MA 02142
United States
617-253-0920 (Phone)
781 891-9783 (Fax)

HOME PAGE: http://web.mit.edu/alo/www

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Massachusetts Institute of Technology (MIT) - Computer Science and Artificial Intelligence Laboratory (CSAIL)

Stata Center
Cambridge, MA 02142
United States

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