Why vaccines don't get developed

The NYT piece makes the claim that the primary issue is cost, but doesn't do a good job at looking at why the costs are as high as they are, nor why drug companies aren't able to generate an adequate return on their investments in the space (NYT via Instapundit):

Dr. Berkley and other vaccine experts note a grim irony. Scientists showed that this vaccine was effective in monkeys a decade ago. Thereafter, the vaccine lingered in scientific limbo.

“We should have had an Ebola vaccine at least two or three years ago,” said Dr. Peter J. Hotez, the president of the Sabin Vaccine Institute and a science envoy at the State Department.

[...] Vaccines are one of the great triumphs of science, but the way that modern medicine functions makes it hard to develop new ones. “That model doesn’t work,” said Dr. Hotez. “It hasn’t worked for decades, and it was really brought home with Ebola.”

To make a vaccine, scientists first design experimental forms to test on cells and animals. It may cost $25 million to perform these studies, said Dr. Plotkin. The cost of that basic research is typically covered by governments or philanthropies.

Then researchers have to put vaccines through several rounds of trials in humans. In small initial studies, they evaluate its safety and figure out the right dose. In larger studies, they look more closely at its effectiveness and side effects.

The cost of taking a vaccine all the way through this process is hundreds of millions of dollars, said Dr. Plotkin.

Major pharmaceutical companies can afford to pay for the later stages of vaccine development, said Dr. Adel A.F. Mahmoud, the former president of Merck Vaccines and now a professor of molecular biology and public policy at Princeton.

But drug companies are increasingly reluctant to take the risk. “The next step, nobody is touching,” he said.