The devil is indeed in the detail; which is why it is good that a lot of the detail has been worked out and these questions have been answered.  The papers here set out the proposal in detail. Dweep’s questions are answered there too.  There has been a lot of analysis of the costs and benefits of this approach.  It is demonstrably more cost effective than other development interventions, or than other ways of using public funds. 

On Mark’s specific point, there is very little chance of any company making super profits from this: because any company can compete for this market, excess expected profits will be competed away be more companies doing more R&D to increase their chance of having a larger share of the market more quickly, resulting in more R&D and a higher chance of a successful product, rather than windfall profits for the drugs companies.

By the way, Mark mentions anti-retroviral therapy as an alternative use of funds.  The cost of anti retrovirals are about a hundred times higher per disability adjusted life year saved than this vaccine proposal.  Which is not to say we should not pay for them – I believe we should – but to say that interventions that we regard as a sensible use of taxpayers money have a much higher cost for the benefit than this AMC proposal.

As a taxpayer I would be rather worried about much of my hard earned cash going to well off shareholders in the UK or wherever rather than those in need. And if we overpay the drug company what is the opportunity cost? Aid budgets are not finite. How many fewer people would be able to get antiretroviral therapy as a result??

This is great work – but lets not downplay the risks

I’ve got a little related blurb on the topic over at THDblog.

The AMC sets a target price.  Actually it sets two: one paid by the developing country buying the vaccine, and a top up paid to the drugs companies by donors.  It also sets a long term price that the company agrees to sell the vaccines for once the AMC is exhausted. You can read more about the mechanism in this powerpoint presentation (see slides 11 and 12). 

Hope that helps.
Owen

Just out of curiosity, does the AMC specify how many shots are to be purchased? In other words, does it set a target price, per shot? As they say, the devli lies in the details, and I haven’t seen the details yet.

The 5 million lives is calculated by looking at the burden of disease (ie how many children in each country get the disease, and how many of those die of it), the number of children who will be vaccinated in each country, and the effectiveness of the vaccine.  Only a small proportion of the children we vaccinate would have died of the disease.   The $300 per life saved is not the cost per vaccination; it is the cost per life saved.

Take a simple example (these numbers are purely illustrative). Suppose one in a hundred children that gets pneumo in a particular country dies as a result; and suppose you have a vaccine that is 80% effective.  Then on average you will prevent 7 deaths for every thousand vaccinations you administer.  So if you vaccinate 625 million children, you'll save 5 million lives.  If the total cost of this is $1,500 million, then the cost per vaccination is $2.40; and the cost per life saved is $300.

By comparison, in the UK, the decisions of the National Institute for Clinical Excellence are consistent with an implicit cost effectiveness threshold of about $1.5 million per life saved!

Owen

The ball is the court of Low resource countries to play their role effectively  for the AMC to muture to adulthood and possibly retirement.

The bold and clear-headed leaders have planted the seed. It is the responsibility  of  all key players to nurture the process in a well coordinated manner.

Congratulations to the working group and the innovators

Iss makumbi-Uganda

 Owen replies: Thanks Orin. It has been fun.