Encouraging the development of new vaccines.

Investment in the development of new vaccines is suboptimal. Changing this situation requires a creative blend of "push" and "pull" strategies. One successful policy model is the Orphan Drug Act, whose key features include large research and development (R and D) tax credits as well as Food and Drug Administration (FDA) counseling and priority review. Such supply-side R and D incentive provisions can be combined with demand-side mandates and vouchers to encourage development of new vaccines. Guaranteed-purchase funds and other pull mechanisms are useful supplementary incentives in the cases of vaccines for bioterrorism and neglected diseases of poverty.