HBS Working Knowledge: Globalization: Funding R&D for Neglected Diseases

“Drug developers have little incentive to undertake costly research needed to develop vaccines for diseases that ravage the world’s poor. After all, vaccines often wind up for sale for pennies in poor countries following government intervention. Developers can’t even recoup their costs.
The solution? Turn to market mechanisms, argue two Harvard University faculty in a new book.
In Strong Medicine: Creating Incentives for Pharmaceutical Research on Neglected Diseases, Michael Kremer, a Harvard University professor, and Rachel Glennerster, an Adjunct Lecturer at the John F. Kennedy School of Government, argue for a ‘pull’ strategy to motivate more research. In effect, governments, NGOs, and other players that provide healthcare services would agree to purchase effective vaccines before they are developed. No vaccine, no payment.”

http://hbswk.hbs.edu/item.jhtml?id=4665&t=globalization