Perspective: Encouraging the development of new vaccines - R&D subsidies for new drugs to treat rare diseases are much larger than those for new vaccines to prevent more common diseases

Health Affairs

Volumn 24, Issue 3, 2005, Pages 697-700

  Grabowski, Henry ^a  

^a DUKE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

VACCINE;

COUNSELING; DRUG APPROVAL; DRUG INDUSTRY; DRUG RESEARCH; FOOD AND DRUG ADMINISTRATION; HEALTH CARE POLICY; HUMAN; MANAGEMENT; MEDICAL RESEARCH; POVERTY; REVIEW; ARTICLE; ECONOMICS; MOTIVATION; RESEARCH; UNITED STATES;

MOTIVATION; RESEARCH; UNITED STATES; UNITED STATES FOOD AND DRUG ADMINISTRATION; VACCINES;

EID: 20044373112     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.24.3.697     Document Type: Review

References (22)

1. M.V. Pauly, "Improving Vaccine Supply and Development: Who Needs What?" Health Affairs 24, no. 3 (2005): 680-689.
2. H. Grabowski and J. Vernon, The Search for New Vaccines: The Effects of the Vaccines for Children Program (Washington: AEI Press, 1997).
3. Institute of Medicine, Financing Vaccines in the Twenty-first Century: Assuring Access and Availability (Washington: National Academies Press, 2004).
4. Financing Vaccines in the Twenty-first Century: Assuring Access and Availability Ibid 2004.
5. Joseph DiMasi and colleagues have estimated that the average capitalized R&D cost to develop a new drug is $802 million. Given the large number of subjects required for vaccine trials and the high plant investment costs, the total cost of developing a new vaccine is presumably at least as great as that for a new drug. J. DiMasi et al., "The Price of Innovation: New Estimates of Drug Development Costs," Journal of Health Economics 22, no. 2 (2003): 151-185.
6. M. Kremer, "Pharmaceuticals and the Developing World," Journal of Economic Perspectives 16, no. 4 (2002): 67-90;
7. and M. Kremer, "Creating Markets for New Vaccines, Part II: Design Issues in Innovation Policy and the Economy," in Innovation Policy and the Economy, ed. A.B. Jaffe et al. (Cambridge, Mass.: MIT Press, 2001), 73-118.
8. See, for example, U.S. Department of Health and Human Services, Office of Inspector General, "Review of Epogen Reimbursement," Pub. no. A-01-92-00506 (Washington: U.S. Government Printing Office, January 1993). In 1993 the inspector general's staff recommended a lower reimbursement rate for Epogen that focused in part on Amgen's apparent high profits.
9. S.R. Shulman et al., "Implementation of the Orphan Drug Act: 1983-1991," Food and Drug Law Journal 47, no. 4 (1992): 363-403.
10. See, for example, Kremer, "Pharmaceuticals and the Developing World," 82-86.
11. U.S. Food and Drug Administration, Office of Orphan Products Development, "Brief History of the Office," June 2000, www.fda.gov/orphan/history. htm (4 March 2005).
12. FDA, "Cumulative List of Orphan Products Designated and Approved," www.fda.gov/orphan/designat/allap.rtf (4 March 2005).
13. H. Grabowski, "Increasing R&D Incentives for Neglected Disease: Lessons from the Orphan Drug Act," in International Public Goods and Transfer of Technology under a Globalized Intellectual Property Regime, ed. K.E. Maskus and J.H. Reichman (Cambridge: Cambridge University Press, 2005).
14. DiMasi et al., "The Price of Innovation."
15. Grabowski, "Increasing R&D Incentives."
16. Grabowski, Increasing R&D Incentives Ibid. The sales distribution of orphan drugs is highly skewed. Although most of them have very modest sales, a few very expensive biopharmaceutical orphan drugs have more than $1 billion in annual sales. This is comparable to top-selling pharmaceutical products.
17. Grabowski, "Increasing R&D Incentives."
18. R. Levine et al., Making Markets for Vaccines (Washington: Center for Global Development, 2005).
19. D. Ridley, H. Grabowski, and J. Moe, "Developing Drugs for Developing Countries" (Unpublished manuscript, Duke University, January 2005).
20. F. Gottron, "Project Bioshield," CRS Report for Congress, 27 December 2004, www.usembassy.it/pdf/other/RS21507.pdf (28 March 2005).
21. See, for example, A. Towse and H. Kettler, "Advance Price or Purchase Commitments to Create Markets for Diseases of Poverty: Lessons from Three Policies," Bulletin of the World Health Organization (forthcoming);
22. and Chemical and Biological Arms Control Institute, Meeting the Biodefense Challenge: A "Roadmap" for a National Vaccine Strategy, Report of the CBACI National Vaccine Strategy Working Group, September 2004, www.cbaci.org/pubs/reports/vaccineroadmap.pdf (28 March 2005). An oft-cited example, where long-term credibility issues were created by a government action, is the threat against Bayer in fall 2001 to negate its ciprofloxacin patent unless it reduced the price.