User:Jebrice/Economics of vaccines

Market incentives[edit]
There is also no business incentive for pharmaceutical companies to test vaccines that are only of use to poor people. Vaccines developed for rich countries may also have short expiry dates, and requirements that they be refrigerated until they are injected and given in multiple shots, all of which may be very difficult in remote areas. In some cases it has simply never been tested whether the vaccine will still be effective if the requirements are not followed (say, if it retains potency for several days unrefrigerated).

In almost all cases, pharmaceuticals including vaccines are developed with public funding, but profits and control of price and availability are legally accorded to private companies. The profits of large pharmaceutical companies are mostly used on dividends and share buybacks, which inflate executive pay, and on lobbying and advertising. Innovation is generally bought along with the small companies that developed it, rather than produced in-house; low percentage R&D spending is sometimes touted as an attraction to investors. The financialization focus of the pharmaceutical industry, especially in the US, has been cited as an obstacle to innovation. There have been ethical issues raised with accepting donations of generally unaffordable vaccines.

Demand[edit]
While the vaccine market makes up only 2-3% of the pharmaceutical market worldwide, it is growing at 10-15% per year, much faster than other pharmaceuticals.

Vaccine demand is increasing with new target population in emerging markets (partly due to international vaccine funders; in 2012, UNICEF bought half of the world's vaccine doses ). Vaccines are becoming the financial driver of the pharmaceutical industry, and new business models may be emerging. Vaccines are newly being marketed like pharmaceuticals. Vaccines offer new opportunities for funding from public-private partnerships (such as CEPI and GAVI ), governments, and philanthropic donors and foundations (such as GAVI and CEPI's donors ). Pharmaceutical companies have representation on the boards of public-private global health funding bodies including GAVI and CEPI. Private donors often find it easier to exert influence through public-private partnerships like GAVI than through the traditional public sector and multilateral government institutions like the WHO; PPPs also appeal to public donors. Philanthropic funding means that vaccines are now rolled out to large developing markets less than 10 or 20 years after they are developed, during the patent validity term of the patent owner. Newer vaccines are much more expensive than older ones. Lower-income countries are increasingly a profitable vaccine market.