Gavi’s market shaping efforts aim to make life-saving vaccines and other immunisation products more accessible and affordable for lower-income countries.
Credit: Gavi/2014/Sanofi Pasteur.
A proactive effort to make vaccine markets work better for lower-income countries is essential to reach all children with life-saving vaccines, and is a central part of Gavi’s strategy. Healthy vaccine markets allow manufacturers to plan production based on known demand, donors to maximise their investments and, most importantly, developing countries to buy suitable vaccines at prices they can afford.
Healthy vaccine markets help us achieve our goal to increase immunisation coverage and make it more equitable, while ensuring that vaccines are safe and effective and that vaccine wastage and supply chain costs are kept to a minimum.
How we do it
Our market shaping activities are guided by a supply and procurement strategy. This determines how we think the different vaccine markets should evolve in the short, medium and long term, and defines the mechanisms we use to influence these markets.
Our strategy aims to:
- ensure adequate and secure supply of quality vaccines
- reduce prices of vaccines and other immunisation products to an appropriate and sustainable level
- incentivise the development of suitable and quality vaccines and other immunisation products.
To reach these objectives, we:
1. collaborate with Vaccine Alliance partners
2. provide market insight, and
3. gain best value and appropriate pricing.
Collaboration with partners
Gavi sets priorities for different vaccines, convenes partners and coordinates their activities, mobilises financial resources, engages in dialogue with manufacturers, and develops policies that guide our efforts to ensure access to vaccines in lower-income countries.
The Bill & Melinda Gates Foundation plays both a technical and financial role – helping to gather data to inform Gavi’s decision making and providing financial support for market investments. It also provides investment for activities ranging from discovery to delivery and encourages product innovation and new market entrants.
UNICEF Supply Division purchases most of the vaccines and immunisation supplies for Gavi countries through tenders and supply agreements.
To ensure a thorough understanding of important market characteristics, we use two main tools:
- Strategic demand forecasts enables better understanding of the product-specific demand in each vaccine market. Demand forecasting estimates future needs, and allows the Vaccine Alliance and manufacturers to effectively plan for the long term.
- Roadmaps determine Gavi’s long-term market ambition for each vaccine, including an analysis of the market landscape, projections of supply and demand, a prioritisation of our objectives and options for how to achieve them.
Best value and appropriate pricing
To access best value in pricing for vaccines and other products, we work in the following ways:
- Aggregating demand and procurement
By aggregating demand from over 70 countries, using a pooled procurement system, developing strategic demand forecasts and securing long-term donor commitments, Gavi has helped to increase demand certainty. This enables manufacturers to plan production more effectively – reducing the risk of supply shortages and allowing Gavi to obtain lower prices.
- Ensuring increased transparency
Gavi encourages timely, transparent and accurate information on vaccine demand, supply dynamics and pricing. UNICEF Supply Division, which manages most of the vaccine procurement on behalf of Gavi-supported countries, has been publishing historical vaccine price data since 2011.
- Supporting tiered pricing
The significant volume and value of demand from Gavi countries have created incentives for vaccine manufacturers to establish a low-pricing tier. This allows Gavi-supported countries to access the same products at a fraction of the price charged in high-income countries.
- Negotiating appropriate, sustainable prices for countries transitioning out of Gavi’s financial support
If immunisation programmes are to be sustained in the long term, countries need continued access to low vaccine prices after Gavi support ends. Through UNICEF tenders, Gavi requests that transitioning countries get access to the same prices as Gavi-supported countries. For many vaccines, such as measles, measles-rubella and meningitis A vaccines, prices are already low and accessible, so no additional negotiation is necessary. Gavi also works to encourage new manufacturers with lower-priced products to enter the market, to meet the needs of both transitioning countries and other lower-middle-income countries.
- Promoting innovative financing mechanisms
The Advance Market Commitment (AMC) is an innovative financing mechanism that incentivises vaccine manufacturers to produce suitable and affordable pneumococcal vaccines for the world’s poorest countries.