Should we centralize vaccine purchase for rich countries like we do for the poor?

October 31, 2005

Acccording to the Financial Times:

The World Health Organisation is discussing plans to launch a centralised system to purchase flu vaccines designed to save costs, boost immunisation rates and stimulate greater research into flu pandemic prevention. ... Klaus Stöhr, co-ordinator of the WHO global influenza programme, said the idea was one “very attractive” possible way to stimulate a new generation of pandemic flu vaccines.The idea comes at a time of growing concern that the current bird flu strain could spread to humans while worldwide vaccine capacity remains extremely limited at about 300m doses.Mr Stöhr said that by purchasing the current seasonal flu vaccines in bulk on behalf of groups of countries working together, the WHO could negotiate lower prices, making seasonal vaccines more attractive and retaining some of the price difference to invest in research and development.
It may sound like a good idea at first; but at least one vaccine company doesn't think so:
However, one representative of the vaccine manufacturers cautioned that a similar scheme operated by Unicef, the United Nations children’s fund, drove down vaccine prices so far that producers withdrew and investment in innovation was reduced.
This is a very real concern. Government policies on vaccines are time-inconsistent - that is, once a vaccine has been developed, we have every reason to want to buy it as cheaply as we can. But firms can see that coming, and have no interest in producing those vaccines in the first place.What we need for both rich countries and poor countries is not centralized purchasing arrangements to drive down the price but advance commitments to create market incentives - including paying a fair price - to develop new vaccines and produce them in bulk.


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