Estimated research and development costs of rotavirus vaccines

Diseases like rotavirus afflict both upper- and lower-income countries, but most serious illnesses and deaths occur among the latter. It is a vital public health issue that vaccines for these types of global diseases can recover research and development (R&D) costs from high-priced markets quickly so that manufacturers can offer affordable prices to lower-income nations. Cost recovery depends on how high R&D costs are, and this study attempts to replace high, unverified estimates with lower, more verifiable estimates for two new vaccines, RotaTeq (Merck) and Rotarix (GlaxoSmithKline or GSK), based on detailed searches of public information and follow-up interviews with senior informants. We also offer a new perspective on cost of capital as a claim for recovery from public bodies. Our estimates suggest that companies can recover all fixed costs quickly from affluent markets and thus can offer these vaccines to lower-income countries at prices they can afford. Better vaccines are a shared project between companies and public health agencies; greater transparency and consistency in reporting of R&D costs is needed so that fair prices can be established. (C) 2009 Published by Elsevier Ltd.