Drug versus vaccine investment: a modelled comparison of economic incentives

BACKGROUND: Investment by manufacturers in research and development of vaccines is relatively low compared with that of pharmaceuticals. If current evaluation technologies favour drugs over vaccines, then the vaccines market becomes relatively less attractive to manufacturers. METHODS: We developed a mathematical model simulating the decision-making process of regulators and payers, in order to understand manufacturers’ economic incentives to invest in vaccines rather than curative treatments. We analysed the objectives and strategies of manufacturers and payers when considering investment in technologies to combat a disease that affects children, and the interactions between them. RESULTS: The model confirmed that, for rare diseases, the economically justifiable prices of vaccines could be substantially lower than drug prices, and that, for diseases spread across multiple cohorts, the revenues derived from vaccinating one cohort per year (routine vaccination) could be substantially lower than those generated by treating sick individuals. CONCLUSIONS: Manufacturers may see higher incentives to invest in curative treatments rather than in routine vaccines. To encourage investment in vaccines, health authorities could potentially revise their incentive schemes by: (1) committing to vaccinate all susceptible cohorts in the first year (catch-up campaign); (2) choosing a long-term horizon for health technology evaluation; (3) committing higher budgets for vaccines than for treatments; and (4) taking into account all intangible values derived from vaccines.