From Nobel Prize-winning economist Michael Kremer and fellow leading development economist Rachel Glennerster, an innovative solution for providing vaccines in poor countriesMillions of people in the third world die from diseases that are rare in the first world-diseases like malaria, tuberculosis, and schistosomiasis. AIDS, which is now usually treated in rich countries, still ravages the world's poor. Vaccines offer the best hope for controlling these diseases and could dramatically improve health in poor countries. But developers have little incentive to undertake the costly and risky research needed to develop vaccines. This is partly because the potential consumers are poor, but also because governments drive down prices.In Strong Medicine, Michael Kremer and Rachel Glennerster offer an innovative yet simple solution to this worldwide problem: "Pull" programs to stimulate research. Here's how such programs would work. Funding agencies would commit to purchase viable vaccines if and when they were developed. This would create the incentives for vaccine developers to produce usable products for these neglected diseases. Private firms, rather than funding agencies, would pick which research strategies to pursue. After purchasing the vaccine, funders could distribute it at little or no cost to the afflicted countries.Strong Medicine details just how these legally binding commitments would work. Ultimately, if no vaccines were developed, such a commitment would cost nothing. But if vaccines were developed, the program would save millions of lives and would be among the world's most cost-effective health interventions.

Foreword ixAcknowledgments xiii1.INTRODUCTION 12.HEALTH IN LOW-INCOME COUNTRIES 6The Disease Environment in Low-Income Countries 6Weak Health-Care Infrastructure 7Malaria, Tuberculosis, and HIV/AIDS 11The Impact of Cheap, Simple Technologies 203.THE PAUCITY OF PRIVATE R&D TARGETED TO THE NEEDS OF LOW-INCOME COUNTRIES 25The Extent of R&D Targeted to Low-Income Countries 25The Scientific Potential for New Vaccines 274.MARKET AND GOVERNMENT FAILURES 29Why Target Foreign Assistance to Vaccine R&D? 30The Patent Tradeoff 33Low-Income Countries and Intellectual Property 36Social versus Private Return: Some Quantitative Estimates 40The Role of Public Purchases 425.THE ROLE OF PUSH PROGRAMS 45Meningococcal Meningitis: An Example of a Successful Push Program 46A Cautionary Tale: The USAID Malaria Vaccine Program 47Incentives under Push Programs 496.THE POTENTIAL ROLE OF PULL PROGRAMS 55The Effect of Market Size on Innovation 55The Impact of Financial Incentive Programs 56Examples of Pull Programs Stimulating Research 59Advantages and Limitations of Pull Programs 637.PULL PROGRAMS: A MENU 68Commitments to Finance Purchase of Products and Patents 68Patent Extensions on Other Pharmaceuticals as Compensation for Vaccine Development 70Best-Entry Tournaments 72Expanding the Market for Existing Vaccines and Drugs 738.DETERMINING ELIGIBILITY 76Basic Technical Requirements 76Independent Adjudication Committee 78Market-Test Requirement 81Exit Clauses 849.HOW MUCH SHOULD WE PROMISE TO PAY FOR A VACCINE? 86What Market Size Is Needed to Spur Research? 86Cost-Effectiveness: What Is a Vaccine Worth? 9010.HOW SHOULD PAYMENT BE STRUCTURED? 97Paying for Multiple Vaccines and Market Exclusivity 100Bonus Payments Based on Product Quality 103Increasing the Promised Price over Time 105Avoiding Windfalls 106Industry Consultations 10711.SCOPE OF THE COMMITMENT 109What Diseases to Cover? 109Vaccines, Drugs, and Other Technologies 109Incentives for Agricultural R&D 11212.MOVING FORWARD WITH VACCINE COMMITMENTS 115Making a Commitment Legally Binding 116The Politics of Creating Markets for Vaccines and Drugs 118Potential Sponsors of New Markets for Vaccines and Drugs 119References 127Index 145