GAO Report: Policies to Incentivize Vaccine Development and Investment

As vaccination development for infectious diseases remains complex and costly, the Government Accountability Office (GAO) has identified 9 policy options that could help address challenges hindering the adoption of vaccine development technologies and approaches or economic challenges, as stated in a GAO report.

“Innovative technologies and approaches, such as those identified in this report, may enhance the nation’s ability to respond to infectious disease,” the report said. “However, key challenges may hinder the adoption of these innovative technologies and approaches.”

The report briefly explained the policy options that help address challenges related to vaccine research and development (R&D), testing, and manufacturing, as well as the economic challenges related to vaccine development.

These policy options involve potential new actions by policymakers, including Congress, federal agencies, state and local governments, academic and research institutions, and industry.

Of the 9 total policy options, 2 were related to the adoption of vaccine R&D technologies and approaches, 2 more were related to adopting vaccine testing technologies and approaches, and another 2 were related to the adoption of technologies, the improvement of vaccine manufacturing capacity, and operational readiness. Three more options focused on addressing economic challenges with incentivizing vaccine development.

“Policymakers could conduct a systematic assessment of the various mechanisms to incentivize vaccine development to determine which incentives could work best for infectious diseases identified as high priority,” the report said in relation to the economic challenges. “Policymakers could also examine the authorities necessary to use these mechanisms and, to the extent that agencies lack such authority, take steps to obtain or provide it.”

GOA went into further detail explaining 5 of the options:

• Prioritize infectious disease pathogens
• Improve preparedness in identifying and prioritizing potential pandemic pathogens
• Further support development of data standards
• Improve preparedness in developing manufacturing capacity in response to surge requirements
• Evaluate factors that inhibit vaccine investment and mechanisms to increase it

Under the first category, the report noted that, with greater leadership and strategic partnerships, policymakers could more quickly address infectious disease that threaten the US population.

“Prioritizing pathogens with pandemic potential could improve strategic vaccine R&D decision-making and help focus resources on developing and adopting key technologies and approaches that most effectively address those pathogens,” according to the report. “Appropriately matching the technologies and approaches to the prioritized potential pandemic pathogens then leveraging technologies may help address certain technical limitations and cost.”

The report also said improving preparedness for identifying and prioritizing certain pathogens can provide a coordinated foundation to be mobilized in an emergency. Like the development of the COVID-19 vaccines, this approach can expedite the process and potentially reduce concerns of safety, efficacy, and manufacturability.

The report further emphasized the importance of integrating researchers’ needs into the standards development process. This can also help improve preparedness for manufacturing, testing, and stockpiling vaccines that can be used in emergency situations.

One of the most time-consuming policies, however important, is to evaluate the factors that inhibit vaccine development.

“A clear understanding of the range of factors discouraging vaccine investment would provide the basis for effectively addressing those factors,” the report said.

Diving further into the economics of vaccine development, the report focused on the role of incentives and why they are needed. According to the report, low vaccine investment can be linked to market failures and uncertainty.

“Vaccines confer significant public health and economic benefits. However, economists we spoke with stated that the benefits that vaccines provide are not necessarily commensurate with the return on investment from developing or manufacturing them,” according to the report.

However the report added that vaccines can have economic and social benefits on top of the obvious health benefits. According to a July 2020 study published in Frontiers in Microbiology, improved health can lead to increased productivity, which further leads to economic growth.

To incentivize development, certain mechanisms can be used to either subsidize a portion of the development process or provide rewards for successful development. According to the report, HHS has leveraged certain mechanisms to incentivize vaccine investment, most recently to respond to the COVID-19 pandemic.

The report also said “push and pull incentives” can be used to encourage vaccine investment.

“Push incentives subsidize the costs of developing a product or general research in vaccines by providing funding for grants to academic institutions, tax credits for R&D, and low or no cost manufacturing,” the report explained. “Pull incentives increase revenue once a vaccine receives authorization or licensure. This can be done, for example, by guaranteeing to purchase a certain quantity or promising a cash prize for successful authorization or licensure.”