Donors make an advance commitment to speed up the time lag and ensure affordable pricing for vaccines
Geneva, 1 June 2008 - The leading cause of death among children under five, pneumococcal disease causes pneumonia, meningitis and sepsis. It kills approximately 800,000 children each year, with 90% of these deaths occurring in developing nations.
Although one pneumococcal vaccine currently exists, its formulation is not optimal against the major disease strains found in poor countries.
New pneumococcal vaccines, if made widely available in the developing world, will have the potential to save approximately 900,000 lives by 2015 and over 7 million lives by 2030. It normally takes up to 15 years or more, however, for new vaccines to be rolled out in developing countries at affordable prices.
To accelerate the development and availability of new vaccines against this childhood killer, Italy, the UK, Canada, Norway, Russia, and the Bill & Melinda Gates Foundation together committed $1.5 billion to finance a pilot Advance Market Commitment (AMC). Under the AMC, donors make an advance commitment to speed up the time lag and ensure affordable pricing.
Consultation and advisory process
The AMC has been designed by independent experts working together with the AMC implementing agencies GAVI, the World Bank, and UNICEF. The technical standards that the vaccines will need to meet in order to be eligible for AMC financing were developed by WHO.
On 25 June, following an extensive process of analysis and consultations, Dr David Fleming presented the AMC to the GAVI Boards. Dr Fleming chaired the Economic Expert Group (EEG) and co-chaired the Implementation Working Group (IWG). These two advisory groups have undertaken extensive analysis, using all available information, and consultations over the past year to determine the optimal AMC pricing structure; one that is low enough to represent excellent value for money and high enough to incentivise industry participation.
Strong endorsement by the board
The Boards strongly endorsed this innovative pilot and confirmed their intention to provide funding of up to US$ 1.3 billion, between now and 2015, to help co-finance the required quantity of urgently needed pneumococcal vaccines.
A full report detailing the terms of the AMC will be published in early July. These will include the following elements:
- Participating companies will be obliged to supply the vaccines under ten year agreements;
- Each firm will be offered a higher price ($7.00 per dose) for the first vaccines it provides;
- In turn, each firm will commit to a lower price over the long term (up to $3.50 per dose);
- The AMC resources will be made available in line with developing country demand; and
- Standard GAVI processes, including co-financing, will be followed to ensure predictability and sustainability for developing countries.
Interested stakeholders are invited to contact GAVI to schedule further detailed briefings.