- Person
- Michael Kremer
- Lived
- b. 1964
- Field
- Development economics
- From
- American
The story
Michael Kremer, a development economist born in New York in 1964 to parents who were children of Jewish immigrants from Poland, became interested in vaccines after he caught malaria while in Kenya. He asked why so little research went into vaccines for diseases that mainly kill children in poor countries.
His answer was an economic one. Developing a vaccine costs a great deal, and a company that succeeds may then face pressure to sell it at prices that do not cover that investment, especially to poor countries. Fearing this, firms invest elsewhere. In a 2004 book with his wife, the economist Rachel Glennerster, Kremer proposed advance market commitments: legally binding promises by donors to buy a set quantity of a vaccine at a set price if one is developed that meets agreed standards of safety and effectiveness. The promise creates a market in advance and gives companies a reason to invest and to build factories.
The idea was first tried on pneumococcal disease, a leading cause of pneumonia, which kills large numbers of young children. In 2007 Italy, the United Kingdom, Canada, Russia, Norway and the Bill & Melinda Gates Foundation pledged 1.5 billion dollars, and Gavi, the Vaccine Alliance, ran the commitment with the World Bank and UNICEF. Manufacturers agreed to supply vaccines to developing countries for at least ten years at a small fraction of the price paid in rich countries.
Gavi reported that the first vaccine introduction under the commitment came in December 2010, and that ten years after its launch the vaccines were routinely delivered in 58 of the world’s poorest countries, had protected about 109 million children, and were offered at less than ten percent of the U.S. public market price.
During the COVID-19 pandemic Kremer and colleagues, including Glennerster, Susan Athey and Jonathan Levin, formed the Accelerating Health Technologies group to advise governments on securing vaccine supplies quickly, and advance purchase agreements became a central tool of the global vaccine effort.
Why it matters
Advance market commitments based on Kremer’s proposal have brought new vaccines to poor countries quickly and far more cheaply, protecting more than a hundred million children from pneumococcal disease.
About Michael Kremer
Economist who brought field experiments to the fight against poverty; his school deworming and vaccine purchase work reached hundreds of millions of children. Nobel Prize 2019.
More about Michael Kremer
Sources
- Vaccines vs pneumonia: how a pioneering funding model changed a game-changing market Gavi, the Vaccine Alliance
- Five nations and the Bill and Melinda Gates Foundation launch Advance Market Commitment for vaccines Gavi, the Vaccine Alliance
- Michael Kremer Wikipedia
Another act of tikkun olam. This is part of tikkun olam, the Jewish idea of repairing the world, and every one of us can add to it.