Bill Gates, Vaccines and a $1.5 Billion Carrot

By Jacob Goldstein

Bill Gates, whom you may know as the author of a popular Twitter feed, said today that his foundation would spend $10 billion on vaccine delivery and R&D over the next 10 years.

Even for a $34 billion foundation, that’s a big chunk of money. “Because of the impact we’re seeing from vaccines we’ll actually spend a higher percentage on vaccines,” Gates told the WSJ.

Gates devoted a chunk of his annual letter, published earlier this week, to vaccines; one of the projects he mentioned struck us as particularly interesting.

It’s called an advance market commitment — basically, a promise to help buy a vaccine that meets certain criteria. The Gates Foundation, along with a handful of governments and NGOs, last year promised $1.5 billion for a pneumococcal vaccine for poor countries. Pneumococcal diseases cause meningitis and pneumonia, and kill some 800,000 children every year.

To claim a share of the money, manufacturers have to commit to sell vaccine for $7 per dose — an order of magnitude less than the current price for the vaccine in the developed world.

“We expect that manufacturers will commit to building factories much earlier than they would otherwise in order to compete for this money,” Gates wrote in his letter this week. “During 2010 the negotiations with manufacturers should come to a conclusion. We believe this will make a big difference in how quickly this vaccine gets to poor children and show how this approach can be applied to other medicines.”

Photo: Associated Press