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Pharma pledges to slash vaccine prices for developing world

Pharmaceutical companies have agreed to large cuts in the price of vaccines bought by the GAVI Alliance, an international partnership aimed at boosting immunisation of chidren living in poor countries. The vaccines covered by the deal will protect against rotavirus and human papillomavirus, and also includes a pentavalent vaccine protecting against diphtheria, tetanus, pertussis, hepatitis B, and haemophilus influenzae type b.

The news gives GAVI a shot in the arm ahead of a ‘replenishment’ meeting in London on 13 June, where the Alliance hopes to persuade donors to make up a US$3.7 billion shortfall in its planned $ 6.8 billion expansion of vaccination programmes over the period 2011 to 2015. The Alliance wants, in particular, to roll out new pneumococcal (see “”">Pneumococcal vaccine rolls out in developing world") and rotavirus vaccines, to combat the two largest killers of children in poorer countries: pneumonia and diarrhoea.

GlaxoSmithKline will offer GAVI its rotavirus vaccine at $2.50 per dose ($5 per child, as vaccination requires a double dose). That is 67% lower than the current lowest price for the vaccine. Merck will also discount its vaccine against rotavirus, which causes diarrhoea and kills more than 500,000 children each year. GAVI plans to vaccinate 50 million children against rotavirus by 2015 (see the table at end of this post), and price cut brings the cost of the vaccine down to a level where it becomes affordable to use on a large scale.

If GAVI is able to buy the vaccine at this price this year, it would save $140 million through 2015. GAVI hopes prices of the rotavirus vaccine will fall further as emerging country makers, including Bharat Biotech, the Serum Institute and Shantha Biotechnics, a subsidiary of Sanofi Pasteur, bring onstream their own rotavirus vaccines around 2015. Bharat Biotech has told the Alliance that it could bring the cost below $3 per child.

Merck also announced today that it will offer its vaccine against human papillomavirus – which kills some 200,000 women annually in poor countries – to GAVI at $ 5 per dose, a 67% reduction. India-based firms Serum Institute and Panacea Biotec also agreed to further reduce the price of their their pentavalent vaccines, which are already relatively cheap at around $2 a dose.

Prices under pressure

Vaccines account for 80% of the Alliance’s budget, and it has come under pressure from Médecins Sans Frontières (MSF) and donors to use its purchasing clout to negotiate better deals with vaccines makers, and to be more active in spurring competition by working with manufacturers in emerging countries, who can often make vaccines at far lower prices than companies in richer countries (see “Cash crisis looms for vaccine drive“).

GAVI has, for example, previously obtained pricing for pneumococcal vaccine from GlaxoSmithKline of $7 per dose for the first batches of vaccine, and $3.50 in the longer term. The same vaccine costs $70 per dose in rich countries, but the reduced prices are nonetheless still very expensive for GAVI given that it’s being used in mass vaccinations that target millions of people. In contrast, the Serum Institute of India in Pune, India, is making a new vaccine for meningococcal meningitis A that costs just US$0.4 a dose. That’s allowed the first mass rollout of the vaccine in Africa (see “Vaccine offers meningitis hope“).

The new pricing cuts are “excellent news,” says Daniel Berman, deputy director of the Access to Essential Medicines Campaign at Médecins Sans Frontières. But there are problems: Merck’s rotavirus vaccine would be impractical to use, he claims, as it requires three doses and demands an unbroken cold chain, whereas refrigeration is often lacking in poorer countries. The GSK rotavirus is a much more suitable product, he says, but it has the limitation that it must be given to children within 32 weeks of birth. Such timely coverage is difficult to achieve in the developing world. Ultimately, vaccines made in emerging countries which are often designed for poorer countries are a better bet, he says.

Getting cost reductions and promoting greater competition is now a pillar of the alliance’s strategy, although it needs to do more, says Jeffrey Rowland, its chief spokesman. While calling the new price cuts “extraordinary” and “highly welcome”, he adds that “we want to continue driving prices down. Today is just the first step.”

In a related move, UNICEF, a major purchaser of vaccines within the GAVI Alliance announced 27 May that it is making public for the first time contractual information on the prices it pays individual companies for vaccines. The move, intended to spur competition, is “a game changer”, says Berman. He argues that pricing transparency has been lacking in the past, and that knowing what other companies are charging will aid companies in emerging countries compete (see more on this from MSF here).

G8 backs GAVI’s expanding vaccination programme

The new price cuts will bring major savings to GAVI, but they won’t make a major dent in the $3.7 billion shortfall the agency is facing in its planned $6.8 billion expansion of vaccination programmes from 2011 through 2015. Filling that gap would require donors committing to major new pledges at next week’s replenishment pledging meeting in London. “We are cautiously optimistic,” says Rowland, predicting that “we may not get it all, but it will be close”.

Prospects for a successful outcome received a boost last month when G8 countries lent their support to the alliance at the G8 summit in Deauville in France, with their final declaration stating that the G8 recognized “the impact of the GAVI Alliance and strongly welcome its efforts to expand access to new and under-used life-saving vaccines”. During US President Barack Obama’s state visit to the UK last month, he and David Cameron, the UK’s prime minister, pledged to make the replenishment meeting a success.

The UK also announced today that it would match funds raised by GAVI from the private sector worldwide. Andrew Mitchell, the government’s development secretary, told the Financial Times that: “We are using our hard-earned taxpayers’ money in this endeavour because we think the results are absolutely brilliant.”


The GAVI Alliance’s vaccination targets 2011-2015

At a ‘replenishment’ meeting to be held in London on 13 June, the GAVI Alliance will ask donors to make up a US$3.7 billion shortfall in its $US6.8 billion vaccination plans from 2011 to 2015. If the plans are fully funded, GAVI would vaccinate:

* 90 million infants in more than 40 countries with new pneumococcal vaccines

* 50 million infants in more than 30 countries with new rotavirus vaccines

* 230 million infants with pentavalent vaccines protecting against diphtheria, tetanus, pertussis, hepatitis B, and haemophilus influenzae type b

* 65 million people with yellow fever vaccines

* Begin rollout of other new vaccines. This includes a vaccine against the human papillomavirus responsible for cervical cancer, a major cause of death of women in poor countries.

This campaign would avert 3.9 million deaths according to GAVI, which is credited with having saved some 5 million lives in the decade since its creation in 2000.


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