A Strategic Approach to Vaccine Development: Incentivizing Research for New Vaccine Technologies

This project was a runner-up for the "Other exceptional project" prize on our Pandemics (Sept 2024) course. The text below is an excerpt from the final project.

Introduction

In the dynamic landscape of medical innovation, economists have long sought to understand the complex factors driving technological breakthroughs. The development trajectories of
vaccines offer a compelling case study in the intricate interplay between scientific research and economic incentives. Consider the stark contrast between the malaria vaccine—which took 35 years of dedicated research—and the rapid development of Covid-19 vaccines in just two years.

While vaccine complexity and technological advancements undoubtedly contribute to development timelines, economic factors emerge as a critical yet often overlooked determinant of research priorities and outcomes. The varying pace of innovation raises profound questions about how economic mechanisms shape scientific research, influencing which health challenges receive concentrated attention and resources.

During a pandemic, rapid vaccine delivery becomes crucial, not only preventing loss of life but also mitigating substantial economic damages. The potential for future global health
crises underscores the importance of developing vaccines across virus families with high pandemic potential. The Johns Hopkins Center's Project Disease X specifically recommends
intensifying research into RNA respiratory virus vaccines, recognizing their elevated pandemic risk [1].

Despite these recommendations, current research efforts have yielded few vaccines for respiratory RNA viruses [2]. This limited progress highlights the critical need for a more strategic approach to medical research funding and priority-setting.

This article examines how financial incentives, market forces, and research funding affect vaccine development, in order to better understand both why some vaccines emerge quickly
while others don't, and more importantly, how we might fix this system to better protect public health.

This article is structured as follows: Section 2 examines market dynamics in the vaccine market, Section 3 provides an overview of different financial incentives, Section 4 analyzes
the policy implications, Section 5 presents the conclusions drawn from this research, and Section 6 includes a glossary of economic terms used throughout the article.

Full project

You can view the full project here.