Innovation policy and the market for vaccines

Area of Science:

• Public Health
• Biomedical Research
• Innovation Studies

Background:

• Vaccines are critical for preventing infectious diseases and improving global health.
• Preventative vaccines receive less attention than treatments, leading to a "missing" vaccine problem.
• The COVID-19 pandemic highlighted the human and financial costs of neglected vaccine development.

Purpose of the Study:

• To identify reasons for the underdevelopment of preventative vaccines.
• To analyze how vaccine characteristics (preventative nature, durability) impact market profitability.
• To propose policy interventions to stimulate vaccine innovation.

Main Methods:

• Economic analysis of vaccine market dynamics.
• Comparison of vaccine profitability versus repeat-purchase pharmaceuticals.
• Review of innovation policy mechanisms.

Main Results:

• Vaccines are less profitable than treatments due to being preventative and durable goods.
• Market failures, not just scientific limitations, contribute to the "missing" vaccines.
• Current intellectual property (IP) protection may not adequately incentivize vaccine development.

Conclusions:

• Innovation policy must address market distortions hindering vaccine development.
• Increased government funding, grants, public-private partnerships, and market subsidies are recommended.
• A large cash prize for low-cost vaccine availability could incentivize development.