The New York Times

Tuesday, March 14, 2000

New Vaccines for the Poor

Buried in President Clinton's new budget is a cleverly designed proposal to encourage pharmaceutical companies to invent new vaccines for poor countries. The proposal would address a severe problem. Malaria, tuberculosis and AIDS kill more than five million people each year. Yet effective vaccines do not exist, in part because most of the victims live in poverty and cannot afford drugs.

The administration's task was to find some way to encourage drug companies to invest huge amounts of money in long-term research to produce products that few of their intended customers could afford. The answer was a targeted tax credit.

Under the plan, drug companies would be given a credit against their taxes of one dollar for each dollar of sales of new vaccines they make to government or nonprofit agencies in the world's poorest countries -- in effect doubling the companies' money on each sale. That could create sufficient incentive for an expensive research program.

The administration proposes to spend $1 billion over nine years on the tax credit -- about the same amount Unicef spends each year on its vaccination programs. One reason to believe the credit will work is the successful record of a similar tax credit for low-income housing that has successfully channeled corporate money to community groups in some of America's worst slums. The drug credit would be limited to new vaccines for malaria and any other infectious disease that kills more than a million people each year. With any luck, the benefits for mankind could be spectacular.