At a meeting on 13 April in Paris, major government donors to the World Bank strongly endorsed the Bank goal of developing financial mechanisms to accelerate AIDS vaccine development. The gathering of treasury and foreign affairs officials from a range of industrialized countries, along with representatives from four developing nations and from UNAIDS, IAVI and the European Union, met to consider if and how the Bank should use its unique position in financial and political circles to complement ongoing efforts by the health sector. In agreeing to support greater Bank commitment, the meeting's participants upheld the view expressed by Joseph Stiglitz, senior vice president for development economics and chief economist, who opened the meeting by pointing out that the AIDS epidemic is reversing the enormous gains in life expectancy and economic development achieved in many developing countries over the past three decades. Therefore, he told Bank sponsors, an AIDS vaccine for the developing world is a crucial component of the Bank's mission to reduce poverty and promote economic growth.

"This outcome is a strong statement of support," says IAVI president Seth Berkley, who was present at the meeting. "The Bank's donors could have said, "this isn't our problem, we're a bank." Their involvement gives a big boost to the effort."

The Bank's attention to AIDS as a development issue comes as the epidemic's ruinous long-range consequences in the developing world become increasingly clear. In the worst hit regions of sub-Saharan Africa, the lifetime risk of dying of AIDS is 40-50% and life expectancy is reduced by up to 30 years, according to Bank data and the U.S. Census Bureau (see chart, page 10). Many of the dying supported families, leaving their orphaned children to abandon school and earn money for other children and relatives -- a devastating blow to their countries' futures. Another potential disaster-in-the-making was highlighted by a recent article in South Africa's Sunday Times (25 April 1999), which reported that 25% of randomly-screened students at one university were HIV-positive. Health care systems are also struggling to cope: costs are rising, treatments are often minimal at best and capacity to care for those with treatable illnesses is severely compromised.

The Paris meeting was convened by the Bank's AIDS Vaccine Task Force, a group formed one year ago with representation from all Bank sectors, plus IAVI's Berkley, to develop a set of options for its Board of Directors. So far, the Task Force has focused on three possible areas for action: increased policy dialog, aimed at raising the priority of AIDS vaccine development among governments and supporting whatever steps the Bank ultimately pursues; "push" mechanisms to increase support for vaccine research and development (R & D); and _ the major area of emphasis - "pull" mechanisms to increase industry involvement, given that the private sector has so far invested little in AIDS vaccines. Specific steps under consideration, according to Task Force co-chair Martha Ainsworth, include:

Expanding direct support for vaccine R & D. At present, the World Bank gives relatively little AIDS money through outright grants: US$18 million to UNAIDS and its predecessor program at WHO over the period of 1986-1998, plus a total of US$1.74 million in "seed money" to IAVI, beginning in 1996. Far more is given out through loans, mostly low-interest credits to the poorest countries -- so far, the Bank has lent US$765 million for dozens of AIDS-related projects, usually focused on prevention. "Push" mechanisms for accelerating HIV vaccine development are unlikely to involve substantially more grants, but could focus on expanding credits available to poor countries for development, manufacture and/or testing of vaccine candidates, especially for building infrastructure. Additionally, the Bank could use its weight to urge other funders to increase support for HIV vaccine R & D.

Further research into the potential market for HIV vaccines in developing countries. The Task Force's research so far shows that industry relies on market data from the industrialized world in making decisions on AIDS vaccines, while information about developing country markets is severely lacking. At the same time there is a perception among some companies that the latter market will be small and ability to pay uncertain at best. Concrete information is needed to fill this knowledge gap -- for example, on how much potential buyers, especially governments and international agencies, would be willing to pay and under what circumstances. That, in turn, requires analyzing the many variables that will affect these decisions, such as a vaccine's price and ease of delivery (would there be a market for a vaccine that is 50% effective? for one that requires three immunizations?).

Demonstrating to industry that demand for existing vaccines can be increased in developing countries. Industry concern that the developing world market for an HIV vaccine might be small is based partly on the fact that this has indeed been the case for most new vaccines (e.g., hepatitis B, pneumococcus, rotavirus). Targeted efforts to turn this around could go a long way towards easing this concern, and pilot projects are now underway in several developing countries to expand loan programs for vaccine purchases.

Developing financial instruments to guarantee a good market for HIV vaccines in developing countries. Various options have been proposed, beginning with a "vaccine purchase fund" -- a pool of money that the World Bank would commit for buying HIV vaccines when one becomes available. This could be done either by financing the fund now, so it can accrue interest over the coming years, or financing it when a vaccine is much closer to licensure. However, some participants at the Paris meeting expressed reservations that the former option commits money so many years in advance rather than using it to save lives now (for example, by purchasing other vaccines). An alternative that "captured peoples'imaginations," says Ainsworth, is a contingency loan -- a new mechanism of loan credits (at very low interest for the poorest countries) that would be agreed upon in the present but used in the future for purchase and delivery of an HIV vaccine.

The next step for the AIDS Vaccine Task Force is to turn its list of options into a concrete proposal for action, to be presented to the Bank's Board of Directors later this year. That will require further research, both internal and external, to evaluate the feasibility and the relative advantages and disadvantages of the different options. "We want to develop something that will really be used, and that industry will see as a strong signal," says Ainsworth.

While the World Bank works on identifying financial mechanisms for attracting more companies into the AIDS vaccine effort, the European Union (EU) is considering a complementary role that emphasizes regulatory and legal issues. That was the outcome of a two-day meeting ("Making an AIDS vaccine available in developing countries: An EC consultation," Brussels, 18-19 March 1999) organized by Lieve Fransen of the European Commission's Development Directorate (DGVIII) to collect technical advice on what role the EU should play. (The European Commission, or EC, is the EU's administrative body.) The gathering brought together diverse experts -- specialists on public health, economic and legal issues plus representatives from developing countries, donor agencies, IAVI, the South African AIDS Vaccine Initiative (SAAVI), World Bank and UNAIDS _ to discuss the key non-scientific barriers to making AIDS vaccines for the developing world and to identify those which the EU might fruitfully address.

The meeting covered a broad range of topics, including economic issues (market disincentives for industry and gaps in existing knowledge about markets) and various regulatory and legal obstacles. Given the EU's role as a policy-making body, the latter areas seemed to offer several promising avenues for EU action.

One potentially useful strategy is already being pursued to encourage the development of "orphan drugs" (those which treat serious diseases but are unlikely to earn profits for the companies that develop them). A proposal to provide incentives for industry to invest in these products is now being finalized by the European Parliament, and includes measures such as 10-year exclusive marketing rights in EU countries, fast track mechanisms for regulatory approval, fee waivers and others -- many of which could also apply to AIDS vaccines. The view among participants was that such legislation would appeal most to small biotech companies doing early R & D.

Novel intellectual property and patent agreements also emerged as an area where the EU could make an important contribution. New vaccines are traditionally introduced into industrialized countries and sold at prices intended to recoup the R &D costs -- and only then, usually 10 to 15 years later, are they brought into developing countries (at lower prices). One model for avoiding this huge delay is the "social venture capital" arrangements between IAVI and the two "vaccine development partnerships" it supports. The agreement is that IAVI provides funds for the pre-clinical development of vaccine candidates in exchange for an arrangement that allows companies to sell a successful vaccine, if one emerges, at any price in industrialized countries but only slightly above cost in the developing world. Should the latter be impossible for the company, intellectual property rights for developing country markets revert to IAVI, which is free to pursue the most cost-effective manufacturing and distribution paths to keep the price as low as possible.

The EC meeting also discussed other possible actions, including collaboration with developing countries on clinical trials, research on some of the economic and financing gaps in AIDS vaccine development, and public-private partnerships that could accelerate the effort. It was also noted that the EU's 1998-2002 research budget (the so-called Fifth Framework Program) includes US$65 million for development of four vaccine candidates and related vaccine research. The meeting concluded with the participation of DGVIII's director general, Philip Lowe, who called upon staff to establish an EC-wide AIDS Vaccine Task Force that will formalize and continue the process of defining an EU strategy to promote AIDS vaccines for the developing world.