THE centrepiece of a G8 initiative to tackle major diseases has come under sustained criticism for the first time — by an academic who claims that the plans are economically unworkable.

Meeting in Moscow at the weekend, the G8 finance ministers agreed to develop a pilot Advance Market Commitment (AMC) for a vaccine to combat disease in the developing world. The world’s richest nations have provisionally pledged to put about $6 billion (£3.4 billion) into each AMC scheme to tackle malaria, HIV-Aids and tuberculosis if the pilot project is judged a success.

AMCs are designed to give incentives to pharmaceutical companies to develop vaccines against diseases suffered by the world’s poor. Gordon Brown, in particular, has called for the scheme to encourage research into vaccines that otherwise would not be considered economically viable.

However, a forthcoming 350-page paper by Andrew Farlow, the head of economics at Oriel College, Oxford, claims that the funding mechanism is flawed. He suggests that a simple AMC scheme would most probably lead to a low-efficacy vaccine being generated that would fail to deal with any disease in the long term.

On the other hand, Mr Farlow says, if the schemes were set up instead to buy improved vaccines as these are developed, that will undermine the incentive to develop initial vaccines.

Mr Farlow, an expert on financial instability, concludes that the schemes do not remove risk, which is a vital requirement if pharmaceutical companies are to invest in developing these products.

He suggests that rich nations’ money would be better used to purchase any product that could help to deal with disease, and not just newly generated vaccines.

In the case of malaria control, that could include drugs currently available, as well as low-tech solutions, such as bednets to block out mosquitos. He also says that world leaders have emphasised the development of new cures, but have failed to consider the challenges of distributing those cures in countries where infrastructure is poor.

Mr Brown has been one of the leading proponents of AMCs. The Chancellor wrote last month that he would push the G8 at Moscow to set up the schemes, saying that a vaccine to save one million lives a year from malaria “could soon be available”.

Mr Brown has told GlaxoSmithKline, the pharmaceutical group, that Britain and other countries would be willing to set up an AMC to support a vaccine for malaria that it is working on.

Mr Farlow argues that the initiative to use an AMC was inspired by Mr Brown, rather than GSK, saying that scientists in GSK’s vaccine-developing divisision were reluctant to endorse the project.

At the G8 meeting, the United States endorsed a report by Giulio Tremonti, the Italian Finance Minister, to bring in AMCs. John Snow, the US Treasury Secretary, said: “It’s a promising approach and we’re going to work towards a proposal here.” Details of the pilot project are expected to be finalised when the G8 finance ministers next meet, in April.

Explore Economics

• Pre-Budget Report 2008

• Budget 2009

• World Economic Forum

• The Times MPC

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive