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2005 Economic Report of the PresidentThe The White House Council of Economic Advisors last week published the 2005 Economic Report of the President, a detailed review of the principal economic challenges facing the US. Chapter 7 (of eight chapters) is dedicated exclusively to global HIV / AIDS. It provides a solid overview of the global epidemic, its economic consequences, and strategies towards prevention and care. It includes a discussion of advance market commitments. Two relevant passages are as follows:

"Prizes for successful drug invention, patent buyouts, and advance commitments to purchase the drugs are a few alternatives that are particularly promising because they encourage research without disallowing competition once a drug is developed."

"Some scholars have also suggested that another approach to encouraging vaccine research would be for a foundation or group of foundations to make an advance commitment to purchase a vaccine at a pre-specified price and quantity. Pharmaceutical firms then would have a secure financial incentive for researching vaccines and treatments, even if a disease affects predominantly poor populations, and, once developed, widespread production of the vaccines could be ensured. "

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CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.