GAVI welcomes lower prices for life-saving vaccines

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Manufacturer commitments will help GAVI vaccinate millions of children in least-developed countries

Bandung442 Edy Purnomo

Geneva, 6 June 2011 - In the lead up to its first pledging conference on June 13, the GAVI Alliance announced today it has achieved commitments from two emerging market vaccine manufacturers to lower prices for the life-saving pentavalent vaccine, which protects against five deadly diseases. Developed country manufacturers have also offered price reductions on rotavirus and human papillomavirus, or HPV, vaccines.

"These are promising offers that demonstrate industry commitment to work towards affordable and sustainable prices for life-saving vaccines in developing countries. We congratulate all manufacturers who have responded to our call in the lead up to the pledging conference," said Helen Evans, GAVI's interim CEO. "We will continue to drive for sustainable prices, while ensuring procurement of innovative, appropriate, quality vaccines to meet GAVI country needs."

Industry-wide

The India-based firms Serum Institute and Panacea Biotec have committed to price reductions on their pentavalent vaccines funded by GAVI. Serum, which had already lowered its price to US$ 1.75 per dose, the lowest price available today, announced it would continue to provide the most competitive pricing and encouraged other manufacturers to follow its lead. Panacea Biotec committed to lower its prices by up to 15%. The pentavalent vaccine protects against five potential killers: diphtheria, tetanus, pertussis, hepatitis B, and Haemophilus influenzae type b. The price reductions illustrate the key role of emerging market suppliers as new global players, contributing to both innovation and increasing competitiveness in the market place.

Rotavirus

In addition to these announcements, GlaxoSmithKline, GSK, has offered to provide the rotavirus vaccine to GAVI at $2.50 per dose, or $5 to fully immunise a child, in response to a current tender administered by UNICEF, a GAVI Alliance partner. The offer is a 67% reduction in the current lowest available public price. Merck has also stated that it will offer its rotavirus vaccine to UNICEF at discounted prices. Both vaccines are WHO prequalified and currently available for use.

New market entrants, including Bharat Biotech, the Serum Institute and Shantha Biotechnics, a subsidiary of Sanofi Pasteur, are developing rotavirus vaccines for GAVI-eligible countries. Vaccines from these firms, however, are not expected to be ready for purchase through UNICEF until approximately 2015. Bharat Biotech said it could then offer further price reductions and lower the cost of immunising a child to $3. Rotavirus is the leading cause of severe diarrhoea – the world’s second biggest killer of children after pneumonia.
UNICEF, which procures the majority of vaccines funded by GAVI, is currently conducting a tender for rotavirus vaccines. It will assess offers from manufacturers in the coming months.  
Evans said that if rotavirus vaccine could be purchased this year at a $2.50 price, the impact on public health could be significant and would allow GAVI to save approximately $500 million through to 2020, or about $140 million through to 2015, as measured against GAVI’s current financial estimates. Price reductions and offers by new entrants could create further savings and ensure a dynamic supply base. “We are strongly encouraged by these new developments,” said Evans.

Vaccine investment strategy

Also today, Merck announced it will offer GAVI the HPV vaccine at a reduced price of US$ 5 per dose, a 67% reduction in the current lowest public price. The price offer is the first of its kind for developing countries. HPV vaccines are part of GAVI’s vaccine investment strategy and the Alliance hopes to see further price reductions. 88% of cervical cancer deaths occur in developing countries killing 275,000 women each year.
Furthermore, Crucell and Sanofi Pasteur will extend GAVI prices on their pentavalent vaccines to the 16 countries currently expected to graduate from GAVI support. Sanofi Pasteur confirmed that this would also apply to its yellow fever vaccine and the rotavirus vaccine being developed by its subsidiary Shantha. These offers will help ensure that price is less of a challenge to sustaining vaccination programmes once GAVI support ends. The announcements build on similar commitments made to graduating countries by Pfizer and GSK to provide the same access to pneumococcal conjugate vaccines through the Advance Market Commitment.
“This encouraging news shows the potential for strong price reductions today and potential ones in the future, particularly from developing country manufacturers,” said Tore Godal, Special Advisor to the Norwegian Prime Minister on Global Health. “Every year, approximately 1.7 million children die of diseases that can be prevented through vaccination. That’s one child every 20 seconds. Working with manufacturers for low and sustainable prices ensures that donor funding goes further in immunising children where vaccines are needed most.”
“Our market-shaping goal is to achieve the lowest price for currently available products while maintaining supply security,” said Evans. “Looking forward, Alliance members will work to broaden competition and ensure the provision of quality vaccines at sustainable prices. Today’s announcements are a step forward to achieving this goal.  

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US$ 80-100 billion

Investing in Gavi’s 2016-2020 strategy has the potential to deliver US$ 80-100 billion in costs averted related to illness, such as productivity loss due to death/disability, treatment costs, caretaker productivity loss and transport costs.

Stack M et al. Estimated economic benefits during Decade of Vaccines, Health Affairs 2011

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