An optimal mechanism to fund the development of vaccines against emerging epidemics

IF 3.4 2区 经济学 Q1 ECONOMICS Journal of Health Economics Pub Date : 2023-09-01 DOI:10.1016/j.jhealeco.2023.102795
Christopher M. Snyder , Kendall Hoyt , Dimitrios Gouglas
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Abstract

We derive the optimal funding mechanism to incentivize development and production of vaccines against diseases with epidemic potential. In the model, suppliers’ costs are private information and investments are noncontractible, precluding cost-reimbursement contracts, requiring fixed-price contracts conditioned on delivery of a successful product. The high failure risk for individual vaccines calls for incentivizing multiple entrants, accomplished by the optimal mechanism, a (w+1)-price reverse Vickrey auction with reserve, where w is the number of selected entrants. Our analysis determines the optimal number of entrants and required funding level. Based on a distribution of supplier costs estimated from survey data, we simulate the optimal mechanism’s performance in scenarios ranging from a small outbreak, causing harm in the millions of dollars, to the Covid-19 pandemic, causing harm in the trillions. We assess which mechanism features contribute most to its optimality.

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为开发新出现流行病的疫苗提供资金的最佳机制。
我们得出了最佳的资助机制,以激励针对具有流行病潜力的疾病的疫苗的开发和生产。在该模型中,供应商的成本是私人信息,投资是不可行的,排除了成本补偿合同,要求以成功交付产品为条件的固定价格合同。单个疫苗的高失败风险要求激励多个进入者,这是通过最优机制实现的,即(w+1)-价格的带储备的反向维克里拍卖,其中w是选定进入者的数量。我们的分析确定了进入者的最佳数量和所需资金水平。根据调查数据估计的供应商成本分布,我们模拟了最佳机制在从造成数百万美元伤害的小规模疫情到造成数万亿美元伤害的新冠肺炎大流行等场景中的表现。我们评估哪些机制特征对其最优性贡献最大。
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来源期刊
Journal of Health Economics
Journal of Health Economics 医学-卫生保健
CiteScore
6.10
自引率
2.90%
发文量
96
审稿时长
49 days
期刊介绍: This journal seeks articles related to the economics of health and medical care. Its scope will include the following topics: Production and supply of health services; Demand and utilization of health services; Financing of health services; Determinants of health, including investments in health and risky health behaviors; Economic consequences of ill-health; Behavioral models of demanders, suppliers and other health care agencies; Evaluation of policy interventions that yield economic insights; Efficiency and distributional aspects of health policy; and such other topics as the Editors may deem appropriate.
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