Child gets polio vaccination in India
Child gets polio vaccination in India - 
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Lisa Napoli: A plan to pay to encourage drug companies to develop vaccines for kids in impoverished countries is in question today. A British medical journal suggests that the formula for buying vaccines disproportionately favors corporations, like GlaxoSmithKline.

G8 leaders have pledged 1.5 billion dollars to eradicate diseases effecting poor children. Marketplace's Jeff Tyler looks at whether that money is being misspent.

Jeff Tyler: The so-called Advance Market Commitment is a financial guarantee, backed by rich countries, that drug companies can expect to at least cover expenses when manufacturing certain drugs for the poor.

But a new report in the British medical journal The Lancet says the altruistic enterprise is getting milked.

Professor Donald Light with the University of Medicine and Dentistry of New Jersey says the G8 is paying commercial rates when it should get the discount price for non-profits. As a result, Light says the G8 is paying four times more than necessary.

Donald Light: So that means about three-quarters of the donated money will go to extra profits on an already commercially successful vaccine, and only one-fourth of it will be buying vaccines.

If G8 officials could negotiate to buy the drug at cost, Light says an additional 900 million poor kids could be vaccinated.

I'm Jeff Tyler for Marketplace.

Follow Jeff Tyler at @JeffMarketplace