This paper provides an economic explanation for the non-existence of a vaccine
against AIDS. It comments on previously claimed economic reasons why private
laboratories do not have incentives to invest in an AIDS vaccine and provides a
new one: private companies already operate in the market for treatment of
already infected patients, which market is threatened by the eventual emergence
of a vaccine that cuts the cycle of infection. Finally, the paper discusses some
mechanisms to provide incentives for further private research in diseases where a treatment product already exists.