The problem of developing pharmaceuticals for so-called neglected diseases is of the utmost importance. Neglected diseases include malaria, tuberculosis, chagas diseases, African sleeping sickness, many other tropical diseases, and even HIV/AIDS, which claims most of its victims in sub-Saharan Africa. The reason for the lack of research into therapies for these diseases is the poverty of most of the victims, who are unable to pay high prices, if anything, for life-saving medicines. Since a large proportion of global pharmaceutical research and development spending is undertaken by private, for-profit companies, who must allocate their research dollars to those diseases on which they can make the most profit rather than the most impact on health outcomes, diseases that afflict mainly poor people are inevitably neglected. While there are a number of very important, very useful nonprofit initiatives, such as the Drugs for Neglected Diseases Initiative (www.dndi.org, accessed Nov. 7, 2005) and OneWorld Health (www.oneworldhealth.org, accessed Nov. 7, 2005), engaged in undertaking or sponsoring research on drugs for neglected diseases, it is important to consider other options to structure incentives to involve for-profit pharmaceutical companies, which have immense financial, technical, and human resources.
In this chapter I examine and compare three proposals recently made to stimulate private involvement in developing pharmaceuticals for neglected diseases: (1) Kremer and Glennerster (2004) and the Center for Global Development (2005) have described in detail a plan for “Advanced Purchase Commitments” for vaccines, which would commit a global body to pay a fixed subsidy per vaccine delivered for certain diseases, if the vaccine meets prespecified technical requirements and is priced below some level.