Case #1450.1

Vaccines for the Developing World: The Challenge to Justify Tiered Pricing (Sequel)

Publication Date: November 01, 1997
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This microeconomics case examines the pricing issues related to the sale of inexpensive vaccines for use in developing countries. The case describe the historic success of the United Nations' so-called "tiered pricing" policy. This policy had allowed the World Health Organization to purchase large volumes of vaccines at the marginal price of vaccine production, often just a few cents per dose, while developed nations paid the full average cost, often many times more. Changing political circumstances and the cost structure of new vaccines threaten the decades-old arrangement, however.

Learning Objective:
This case frames the challenge for public health authorities seeking to convince both pharmaceutical firms and elected officials in the U.S. and Europe that tiered pricing could continue to serve both public health and commercial purposes-and is in the best interest of all concerned.

Other Details

Case Author:
Susan Rosegrant
Faculty Lead:
Jose Gomez-Ibanez
Pages (incl. exhibits):