Incentives for Biodefense Countermeasure Development - Center for Biosecurity, University of Pittsburgh Medical Center - This article looks at some of the reasons why big drug companies aren't getting involved in biodefense, or anti-infectious disease vaccines in general, and how to encourage them. Some of the problems are similar to those experienced in many space business concepts, like reliance on a largely government market, high R&D costs and risks, and legal/regulatory barriers. Many of the existing and potential encouragements are also similar to those often mentioned in a space context. An excerpt:
In this article, we discuss the challenges to industrial investment in countermeasure development, review existing and proposed federal incentives for countermeasure R&D, and recommend measures to increase industry’s engagement in the medical countermeasure enterprise.
One prize-like incentive discussed is the "priority review voucher" which allows a company that puts a qualifying product on market to get a (possibly tradeable) "bump to the head of the line" in the FDA drug review queue. There's also a section that evaluates "pure" innovation prizes, although, unlike priority review vouchers, the article doesn't call out prizes as a recommended incentive to add to the current mix.
My personal inclination would be to try a small biodefense prize program to see how it works in that field, but target the prizes towards innovations and advances that are achievable by small biotech entrepreneurs and research labs rather than industrial scale pharmaceutical giants. The motivation of prizes at a personal level and from the publicity perspective are likely to apply most powerfully at that level.