Economics of vaccines

Vaccine development and production is economically complex and prone to market failure. Many of the diseases most demanding a vaccine, including HIV, malaria and tuberculosis, exist principally in poor countries. Pharmaceutical firms and biotechnology companies have little incentive to develop vaccines for these diseases because there is little revenue potential. Even in more affluent countries, financial returns are usually minimal and the financial and other risks are great.

Most vaccine development to date has relied on "push" funding by government, universities and non-profit organizations. Many vaccines have been highly cost effective and beneficial for public health. The number of vaccines actually administered has risen dramatically in recent decades. This increase, particularly in the number of different vaccines administered to children before entry into schools may be due to government mandates and support, rather than economic incentive.