FT Article on Development of Medicines

"Owen Barder, who leads a public health program at the US Center for Global Development, a think-tank, says: "One representative from the pharmaceutical industry told us that in some ways, actually discovering a vaccine for Aids was their biggest nightmare." Malaria kills at least 1m people a year and HIV/Aids more than 3m, both mainly in sub-Saharan Africa. But the ambivalence of the big pharmaceutical companies, Mr. Barder says, is evidence not of their immorality but of the perverse incentives they face in developing drugs and vaccines mainly of use in poor countries."

"When you don't have a market you are not going to have much investment in these developing world diseases," says Bill Gates, the Microsoft co-founder whose family foundation has ploughed billions of dollars into vaccine research. An advance purchase fund could offer an incentive to invest. The critical element of such a scheme, however, would most likely be a binding legal commitment from donor countries to pay out in the future for a successful vaccine. If designed intelligently, perhaps with a fee for each inoculation, such a fund could replicate the operation of the market by allowing the latest vaccines to supersede earlier ones rather than awarding the whole prize to the first one. Mr. Barder believes a fund of about $3bn for each disease should be enough to encourage development."