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Press Release


Drug & Vaccine Development for TB & Malaria

DATELINE: Tue, 26 Oct 1999

The world's largest pharmaceutical companies are eager to spend billions of dollars to develop better treatments for heart disease, depression, and other high-priority diseases of wealthy nations, but they are far less enthusiastic about putting resources toward malaria, tuberculosis, and HIV, which kill millions of people in developing countries.

Call them cruel or heartless, but they are simply following the rules by which nearly every US company operates: they don't invest in areas in which they cannot make a profit, and selling drugs to developing nations is not profitable.

Two Harvard University economists have come up with a novel way to circumvent the problem: give private companies financial incentives - from a pool of public and foundation funds - to produce products for the developing world.

Michael Kremer, professor of economics and a 1997 winner of a MacArthur "genius" grant, and Jeffrey Sachs, a noted expert on debt relief who directs Harvard's Center for International Development, want wealthier nations to direct dollars to pharmaceutical research that would otherwise go toward direct loans to impoverished nations.

Sachs, a well-known advocate for the world's poor, believes that when governments fail to meet the basic health needs of their people, they destroy the base for future economic growth. But because creating new drugs and vaccines is a technology-intensive business that largely occurs in the developed world, the Third World is dependent on the good graces of industrialized nations.

According to the World Health Organization, malaria kills 1.1 million people annually, 1.9 million people die from tuberculosis each year, and 2.3 million from HIV, mostly in developing nations.

To spur the market for vaccine development, the economists propose the creation of an international board that would raise funds from the public and private sector to be used by pharmaceutical companies to develop a malaria vaccine, for example. The first company to come up with a viable vaccine would get a promise from the board that it would be purchased in a large enough volume to guarantee the company a favorable return. For example, the board would buy the vaccine at a market price, such as $10 a dose, rather than at production cost, which could be less than a dollar a dose.

The private and government donors would promise the money upfront, but wouldn't have to spend it unless and until a successful malaria vaccine was ready for market. "It's not standard foreign aid; it's conditional," Sachs said. Sachs and Kremer credit the seed of the idea to coalitions organized by the International AIDS Vaccine Initiative.

If a viable vaccine was made, Kremer currently proposes a base award of $2.8 billion for a malaria vaccine, $5.7 billion for an AIDS vaccine, and $3.7 billion for a tuberculosis vaccine.

"Such a fund would both create incentives for vaccine research and ensure that if vaccines were developed, they would reach people in developing countries," said Kremer. Companies understandably shy away from researching drugs that would be targeted mainly to developing nations, he said, because as it is, only one in 10,000 drugs makes it from the laboratory to pharmacy shelves.

Before a drug can meet approval by the US Food and Drug Administration, it must go through a lengthy series of clincal trials to establish its safety and efficacy, and the FDA must review and pass judgment on tens of thousands of documents that constitute the application for marketing approval. Today, it costs about $500 million to develop a drug, and can it take more than a dozen years.

Kremer explained that programs to encourage vaccine research can be divided into "push" programs, such as grants to researchers, and "pull" programs that pay for a viable vaccine.
"Paying for vaccines, rather than funding research expenditures, gives pharmaceutical firms and scientists strong incentives to self-select only those research projects that have a reasonable chance of leading to a vaccine," said Kremer. "With pull programs, the public pays only if a vaccine is actually developed."

Sachs said that although they are strictly focusing on a plan for a malaria and AIDS vaccine, public/private incentive funds could be established to tackle other problems of the developing world, such as a lack of energy resources and inadequate food production.

Senator Patrick Leahy of Vermont, who is the senior Democratic member on the Foreign Operations Subcommittee of the Senate Appropriations Committee, said that he thinks that a vaccine purchase fund is "a good plan."

For the past three years, Leahy has spearheaded allocations of $175 million in foreign aid to address infectious diseases worldwide, with funds being used to expand programs at USAID, the Centers for Disease Control and Prevention, and the World Health Organization. "We can get more and we will get more," Leahy said.

But Dr. Dyann Wirth, director of the Harvard Ma