In an effort to stimulate greater private sector investment in making new vaccines, U.S. Congressional Representative Nancy Pelosi (Democrat-California) has proposed legislation providing tax incentives for companies conducting vaccine research and development (R&D). Entitled the "Lifesaving Vaccine Technology Act of 1999, the bill would create a tax credit equal to 30% of a company's annual R&D costs associated with research on vaccines for HIV, malaria, tuberculosis and any other disease that causes more than one million deaths each year.

The legislation also expresses the "sense of Congress" that the U.S. government should actively assist international efforts to develop mechanisms, such as a global vaccine purchase fund, to ensure the broadest possible access to priority vaccines in poor countries.

IAVI assisted in developing the legislation and has formally endorsed the bill. In addition, several companies (including Chiron and VaxGen, both California-based biotech companies currently engaged in AIDS vaccine development) advised Pelosi's office. Other supporters include the American Public Health Association, Global Health Council, AIDS Vaccine Advocacy Coalition, AIDS Action Council, the Program for Appropriate Technology (PATH) and the Reproductive Health Technologies Project.

"Vaccines are our best hope to control the epidemics of TB, malaria, and HIV/AIDS, yet there are significant disincentives for private sector research and development investment in vaccines for these infectious diseases," said Pelosi. "This legislation will leverage private sector resources, and encourage the market to work more effectively to address the biggest public health opportunities."

Infectious diseases are the leading cause of the death in the world. In May, the World Health Organization announced that HIV/AIDS had surpassed tuberculosis as the leading infectious cause of death worldwide. AIDS, malaria and tuberculosis together account for over seven million deaths annually worldwide. But there are relatively few vaccines against these diseases now in the development pipeline.

The bill, Pelosi suggests, could save "millions of lives and billions of dollars in treatment costs and productivity losses" by accelerating development of high priority vaccines. R&D costs that would qualify for the tax credit include salaries, supplies, certain computer-related expenses, and 75% of contract research costs at domestic scientific institutions. The credit would also cover the costs of human clinical trials outside the U.S., but not buildings, overhead or fringe benefits.

Under the legislation, any company that claims the tax credit must establish a good-faith-plan for worldwide access to any licensed product it ultimately develops from such R&D. By claiming the tax credit, a company would not waive its rights in terms of pricing, patent ownership or proprietary information.

In addition to its support for a global vaccine purchase fund, the bill also includes a non-binding expression of Congressional support for tiered or differential pricing for vaccines. Under this approach, the higher prices charged in industrialized countries permit companies to sell vaccines at lower prices in developing countries.

"The tax credits proposed in this bill are an example of the type of incentives necessary to encourage industrial participation in HIV vaccine development," says IAVI's president, Seth Berkley. "Congresswoman Pelosi and the co-sponsors of this bill have shown real leadership in this area and deserve our support."

The legislation "will encourage investment in critically important vaccines that can protect against global killers," says Gordon Perkin, president of the Seattle-based PATH, an international, non-profit organization whose mission is to improve global health, especially of women and children. "Further engaging the private sector in these efforts is vitally important."

Industry leaders seem to agree. "By providing some up-front incentives, this type of program can help companies invest in prevention technologies that will have huge benefits in both developing and industrialized countries," says Margaret Liu, vice president for vaccine research at Chiron, a California-based biotechnology company.

More than 20 members of the House of Representatives have already signed on as co-sponsors of the bill. The legislation has been referred to two different House committees for consideration. Sen. John Kerry, a Massachusetts Democrat, intends to introduce a companion bill in the U.S. Senate in the near future.