Strong Medicine: Creating Incentives for Pharmaceutical Research on Neglected Diseases

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Strong Medicine: Creating Incentives for Pharmaceutical Research on Neglected Diseases

By Michael Kremer and Rachel Glennerster
Princeton University Press, 2004
152 pp. $24.95
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This short book poses a problem and suggests a practical solution. The problem is that more than half the deaths in poor countries result from infectious or parasitic diseases, in sharp contrast to rich countries, where fewer than ten percent of deaths are due to such diseases. They have been largely conquered in rich countries by vaccines and pharmaceutical cures, but effective demand for vaccines in poor countries is too low to stimulate the requisite research and development of vaccines for the most deadly tropical diseases, such as malaria, tropical tuberculosis, and schistomiasis. Research dollars are instead focused on medical conditions of greatest interest in rich countries. The authors propose to provide incentives for more research on tropical diseases by guaranteeing minimum purchases by rich-country governments of any proven vaccines for tropical disease, to be distributed to poor countries as foreign aid. Their calculations suggest high social returns to such "pull programs," which have demonstrated their effectiveness in the United States under the Orphan Drug Act (covering rare diseases) and under the program for immunizing children.