Third-World Vaccine Development Plan Stalls

Positions of France, U.S. Means Endorsement Unlikely During G-8 Summit

A spat between the United States and France is holding up progress on a novel, business-friendly plan to persuade drug companies to develop vaccines for killer diseases in the Third World.

Despite lobbying from the United States, Italy and Britain, chances have faded that President Bush and other leaders of the Group of Eight major powers will endorse the proposal next weekend in St. Petersburg, Russia, at their annual summit.

The proposal "is kind of trembling on the cusp," said a senior official with direct knowledge of the G-8 vaccine discussions. "It is now in substantial danger of flopping even though there is an extraordinary level of support among some key stakeholders."

A summit-preparatory meeting last month ended with senior officials from France and the United States in a heated exchange over the plan, in which the G-8 would guarantee a market for pharmaceuticals companies that create successful vaccines.

France refused to endorse the vaccine proposal unless the United States backed a French proposal for a new international airline-ticket tax to pay for aid to poor countries, and the Bush administration refused to do so, according to three people familiar with the internal G-8 talks.

Complicating matters was the reluctance of Germany and Japan to put large amounts of money into the vaccine plan, called an advance market commitment.

The situation marks a setback for the vaccine initiative. The proposal appeared to be on the fast track in February when G-8 finance ministers, including then-U.S. Treasury Secretary John W. Snow, endorsed the idea. At that time, the ministers expected to agree by April on a pilot project to tackle at least one deadly infectious disease.

That meeting led to the creation of a panel of experts, who recommended that the first advance market commitment be used to promote development of a vaccine for pneumococcal disease. The bacterial infection killed 1.6 million people in 2002, 716,000 of them under the age of 5, according to the most recent World Health Organization figures.

G-8 officials say drug companies, although initially skeptical, have rallied behind the idea. "They're ready to give this a go," said the official familiar with the G-8 discussions.

The plan is intended to correct a flaw in global drugs markets: The countries that most need new vaccines for diseases such as AIDS and tuberculosis can least afford to pay for them. An Italian Finance Ministry paper concluded last year that weak demand has drug companies reluctant to develop vaccines aimed at diseases found mostly in poor nations.

Under the plan, the G-8 would guarantee a market -- valued at $800 million to $6 billion depending on the disease -- for any company or companies that produce vaccines that meet agreed-upon standards for safety and efficacy. Once the donors spend that initial subsidy, the pharmaceuticals companies would discount the vaccine sharply for developing-world customers.

"All of the technical work that can be done on an abstract level has been done," said Orin Levine, an epidemiologist who works on pneumococcus vaccines at Johns Hopkins University. "It's time to just commit, to take that step and move into the first stage, which is negotiating the first-ever advance market commitment for a vaccine."