Microkhan by Brendan I. Koerner

The Vaccine Dream Deferred

November 10th, 2009 · 3 Comments

An MIT economist argues that botched incentives, rather than scientific hurdles, are frustrating the quest for an HIV vaccine. The point that jumped out at us the most:

It has become increasingly apparent that an HIV vaccine may need to be administered in combination with antiretroviral drugs, even if a stand-alone vaccine remains the ultimate goal for some researchers. In that case, we will need to create stronger incentives for manufacturers of antiretroviral drugs to get into the business of prevention. Right now, antiretroviral producers see HIV-infected people as their best customers.

A brutal judgment, perhaps, but certainly correct. Drug makers could do a lot to further the vaccine cause, especially since they harbor so much proprietary data created by their trials. But they have little incentive to share, since the development of a vaccine could eventually dinosaur their (for lack of a better term) “maintenance” business.

So how do we get these pharmaceutical rivals on the same page, without resorting to some sort of central planning method? And should government be the mediator that brings the two sides together?

The abstract of the full Health Affairs piece on the topic is here, but the PDF is behind a paywall. If anyone has access and can shed more light on the author’s proposed solution to creating an alliance between drug and vaccine makers, we’re all ears.

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3 Comments so far ↓

  • Captured Shadow

    Well, I only read the abstract so I don’t really know all of the authors arguments in detail but that never stops me from knocking down straw-men.

    The idea is that we need a new contractual structure for an HIV vaccine. Really? If someone was marketing a 90% effective vaccine I would pay $100 to get the jab. I bet there are about 100 million of us that feel the same way. There is a Billion dollar incentive right there.
    Now if the side effects are really bad there needs to be some kind of insurance scheme in place so those that get sick, get taken care of, but it seems like the insurance companies can do that, we don’t really need a new system for that.

    Of course anti-retoviral makers have HIV positive people as their best customers, but they will lose them once their drugs go generic. The customers for a potential vaccine would be everyone that is NOT HIV positive so that market should be even bigger. Finally a vaccine is often not effective if given after infection, so the retroviral makers would not be cutting off current customers.

  • Brendan I. Koerner

    Based solely on the Q&A, I think a big part of the guy’s argument is that vaccine makers fear that governments will create a mandatory administration regime that guarantees shots to all comers. And if that happens, he thinks that it will put downward pressure on prices, as governments will insist on purchasing the vaccines at discount rates because it’s a public good.

    Having typed that out, boy, it seems kinda paranoid, right? But maybe that’s how the heads of vaccine makers think–maybe they’ve been burned in the past. Fodder for a follow-up post, perhaps.

    The bottom line is that this economist wants the government to guarantee vaccine makers that they’ll either a) always pay fair-market (i.e. high) prices for vaccines, or b) not have a government administration regime in the developed world. This line from one of his answers goes toward the latter point:

    “Even more critical is that private firms receive guarantees to the commercial rights to the lucrative market for a vaccine against HIV subtype B, which predominates among homosexual men in North America, Europe, Australia and Japan.”

    In other words, we’ll break even on Africa, if you let us sell this stuff for a fortune at home.

  • Brian Moore

    But the weird thing is that I can understand that for the retroviral producers — they think a vaccine is a bad idea. But they aren’t (or I suppose shouldn’t) be the same people as vaccine researchers, who should have incentives to develop a vaccine. Even if they do invent a vaccine, retroviral makers will still have all the currently infected people to treat. Is there only one group of people working on HIV treatments?

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