Gavi's strategy for 2011-2015 includes an explicit goal to shape vaccine markets
The value of pooling demand and purchasing
The majority of procurement on behalf of the Vaccine Alliance is conducted by UNICEF, while Gavi-eligible countries in the Americas are sourcing their vaccines through the Pan American Health Organization (PAHO) Revolving Fund.
Gavi’s role in the global vaccine market is evidenced by the initial impact the Vaccine Alliance has had in changing the production and supply base, accelerating price declines in some vaccines and supporting the application of tiered pricing that enables poor countries to pay significantly less than higher income countries for the same vaccine.
The hepatitis B, tetravalent and pentavalent vaccines illustrate how these dynamics play out, with pneumococcal vaccines as an example of how innovative financing mechanisms can influence the market. However, Gavi’s ability to shape particular vaccine markets though the magnitude of its procurement though UNICEF depends on various factors, including the number and capacity of manufacturers, the vaccine complexity and Gavi’s relative market power in terms of volume and revenue.
Supply and procurement strategy
To facilitate and accelerate the achievement of Gavi’s market-shaping goal, the Gavi Board approved in November 2011 the Vaccine Supply and Procurement Strategy for the period 2011-2015. The strategy aims to ensure sufficient and uninterrupted supply of high-quality vaccines, promote low and sustainable costs for developing countries, and foster an environment for innovation.
Recognising the differences across vaccines in terms of market maturity and competition, manufacturing complexity and the Vaccine Alliance’s relative market power, Gavi is applying a tailored approach for each vaccine it funds – see human papillomavirus vaccine roadmap.
Drawing on key partners and particularly UNICEF Supply Division which manages most of the vaccine procurement, Gavi will aim to achieve its fourth strategic goal objectives through:
- continued strengthening and dissemination of forecasting to ensure timely, transparent and accurate market information; and
- innovative approaches to making demand more predictable, accelerating vaccine development, increasing levels of production, and improving vaccine portfolio management to ensure efficient and effective vaccine procurement and supply-chain management.
Gavi recognises the importance of timely, transparent and accurate information sharing on expected vaccine demand and supply dynamics. It therefore welcomes vaccine suppliers’ agreement to make pricing information more transparent. UNICEF publishes the vaccine prices paid to individual manufacturers.