Designing Pull Funding For A COVID-19 Vaccine

Snyder, Christopher M.; Hoyt, Kendall; Gouglas, Dimitrios; Johnston, Thomas; Robinson, James M.

doi:10.1377/hlthaff.2020.00646

Cited by 24 publications

(20 citation statements)

References 16 publications

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“…"if the market size of the product is sufficiently large, then innovation will happen.") This view is reflected in the IGM Forum survey mentioned above, but also in various proposals such as Chalkidou et al (2020), andSnyder et al (2020).…”

Section: Introductionmentioning

confidence: 84%

What Drives Innovation? Lessons from COVID-19 R&D

Agarwal¹,

Gaulé²

2021

IMF Working Papers

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To examine the drivers of innovation, this paper studies the global R&D effort to fight the deadliest diseases and presents four results. We find: (1) global pharmaceutical R&D activity-measured by clinical trials-typically follows the 'law of diminishing effort': i.e. the elasticity of R&D effort with respect to market size is about ½ in the cross-section of diseases; (2) the R&D response to COVID-19 has been a major exception to this law, with the number of COVID-19 trials being 7 to 20 times greater than that implied by its market size; (3) the aggregate short-term elasticity of science and innovation can be very large, as demonstrated by aggregate flow of clinical trials increasing by 38% in 2020, with limited crowding out of trials for non-COVID diseases; and (4) public institutions and government-led incentives were a key driver of the COVID-19 R&D effort-with public research institutions accounting for 70 percent of all COVID-19 clinical trials globally and being 10 percentage points more likely to conduct a COVID-19 trial relative to private firms. Overall, while economists are naturally in favor of market size as a driving force for innovation (i.e."if the market size is sufficiently large then innovation will happen"), our work suggests that scaling up global innovation may require a broader perspective on the drivers of innovation-including early-stage incentives, non-monetary incentives, and public institutions.

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Section: Introductionmentioning

confidence: 84%

What Drives Innovation? Lessons from COVID-19 R&D

Agarwal¹,

Gaulé²

2021

IMF Working Papers

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“…To cite just one example, the MER based market incentive of $1 billion per antibiotic proposed in the DRIVE-AB report is miniscule in comparison to the potential costs of AMR . With COVID-19, we are also witnessing the rapid development of complementary push and pull incentives to develop, manufacture, and distribute vaccines across the globe with unprecedented speed . The progress on the COVID-19 vaccine has underscored the advantages of global cooperation, with research scientists, funders, and vaccine manufacturers joining forces across both HICs and LMICs to overcome the twin challenges of R&D and access…”

Section: Discussionmentioning

confidence: 99%

“…4 With COVID-19, we are also witnessing the rapid development of complementary push and pull incentives to develop, manufacture, and distribute vaccines across the globe with unprecedented speed. 103 The progress on the COVID-19 vaccine has underscored the advantages of global cooperation, with research scientists, funders, and vaccine manufacturers joining forces across both HICs and LMICs to overcome the twin challenges of R&D and access. 104 It is therefore striking that, in the case of antibiotics, market failure is still hindering the development of one of the most significant life-saving measures ever developed by medical science.…”

Section: ■ Conclusionmentioning

confidence: 99%

To Push or To Pull? In a Post-COVID World, Supporting and Incentivizing Antimicrobial Drug Development Must Become a Governmental Priority

Cama

Leszczynski²,

Tang

et al. 2021

ACS Infect. Dis.

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The COVID-19 pandemic has refocused attention worldwide on the dangers of infectious diseases, in terms of both global health and the effects on the world economy. Even in high income countries, health systems have been found wanting in dealing with the new infectious agent. However, the even greater long-term danger of antimicrobial resistance in pathogenic bacteria and fungi is still under-appreciated, especially among the general public. Although antimicrobial drug development faces significant scientific challenges, the gravest challenge at the moment appears to be economic, where the lack of a viable market has led to a collapse in drug development pipelines. There is therefore a critical need for governments across the world to further incentivize the development of antimicrobials. Most incentive strategies over the past decade have focused on so-called "push" incentives that bridge the costs of antimicrobial research and development, but these have been insufficient for reviving the pipeline. In this Perspective, we analyze the current incentive strategies in place for antimicrobial drug development, and focus on "pull" incentives, which instead aim to improve revenue generation and thereby resolve the antimicrobial market failure challenge. We further analyze these incentives in a broader "One Health" context and stress the importance of developing and enforcing strict protocols to ensure appropriate manufacturing practices and responsible use. Our analysis reiterates the importance of international cooperation, coordination across antimicrobial research, and sustained funding in tackling this significant global challenge. A failure to invest wisely and continuously to incentivize antimicrobial pipelines will have catastrophic consequences for global health and wellbeing in the years to come.

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“…Snyder et al (2011) provides an early assessment of the pneumococcal pilot and calibrations of alternative policy designs. In the current COVID-19 pandemic, several articles have laid out the conceptual case for a vaccine AMC (Chalkidou et al 2020a); Snyder et al (2020) calibrate the optimal size of such a program. AMCs have been the subject of critiques ranging from high program costs (Light 2005, Scudellari 2011) to the ethical dilemma raised by respecting developing countries' preferences for culturally acceptable but less effective vaccines (Sonderholm 2011).…”

Section: Introductionmentioning

confidence: 99%

Designing Advance Market Commitments for New Vaccines

2022

Self Cite

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Advance market commitments (AMCs) provide a mechanism to stimulate investment by suppliers of products to low-income countries. In an AMC, donors commit to a fund from which a specified subsidy is paid per unit purchased by low-income countries until the fund is exhausted, strengthening suppliers’ incentives to invest in research, development, and capacity. Last decade saw the launch of a $1.5 billion pilot AMC to distribute pneumococcal vaccine to the developing world; in the current pandemic, variations on AMCs are being used to fund COVID-19 vaccines. This paper undertakes the first formal analysis of AMCs. We construct a model in which an altruistic donor negotiates on behalf of a low-income country with a vaccine supplier after the supplier has sunk investments. We use this model to explain the logic of an AMC—as a solution to a hold-up problem—and to analyze alternative design features under various economic conditions (cost uncertainty, supplier competition). A key finding is that optimal AMC design differs markedly depending on where the product is in its development cycle. This paper was accepted by Joshua Gans, business strategy.

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Designing Pull Funding For A COVID-19 Vaccine

Cited by 24 publications

References 16 publications

What Drives Innovation? Lessons from COVID-19 R&D

What Drives Innovation? Lessons from COVID-19 R&D

To Push or To Pull? In a Post-COVID World, Supporting and Incentivizing Antimicrobial Drug Development Must Become a Governmental Priority

Designing Advance Market Commitments for New Vaccines

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