With protests about the size of the international aid budget ringing in his ears, the Prime Minister will attend a conference in London today (June 10) to pledge taxpayers’ money to pay for lifesaving vaccines for children in poor countries. The less cash David Cameron and other government leaders stump up, the fewer children receive vaccinations. Or do they?
MSF well knows the importance of immunisation, and its teams of doctors and nurses vaccinate around 10 million children in the developing world each year. But cash donated by governments means cash donated by taxpayers, and therefore it is right to ask unpleasant questions.
There has already been acclaim for Monday’s Global Alliance for Vaccines and Immunisation (GAVI) conference following the announcement by GlaxoSmithKline (GSK) that it is to sell its £8 a dose rotavirus vaccine for less than £3 a dose to low-income countries through GAVI.
But is this the best price that GAVI can get with its cash handed over by (frequently unwilling) taxpayers?
The government leaders present today need carefully to assess their strategies to make sure that taxpayers are not being fleeced. A new reality is emerging in vaccine development and production.
For example, manufacturers in India match the quality standards of the Big Pharma companies and sell their vaccines at a fraction of the price.
In March this year, the Chinese regulatory authority which approves the quality of Chinese vaccines was validated by the World Health Organization. This means that, as already happens in India, low-cost quality vaccines produced in China can now be approved for purchase by UNICEF, GAVI and others to serve the global marketplace.
MSF buys HIV medicines from Indian manufacturers at significantly lower prices than Big Pharma companies offer. Recent price disclosures by GSK and the Johnson & Johnson subsidiary, Crucell, show that these companies have been selling some vaccines at premiums of up to 180 percent.
Prices charged for pneumococcal vaccines that prevent life-threatening pneumonia shed light on the other side of the price story. GSK and Pfizer are selling the vaccine to GAVI through a scheme called the Advance Market Commitment.
Andrew Witty, GSK’s chief executive, calls this an “innovative financing mechanism”; we would describe it as corporate welfare that is scandalously expensive to donors and taxpayers.
Under the Advance Market Commitment, GSK and Pfizer are selling 30 million doses of pneumococcal vaccine annually to GAVI for £2 each. In addition to the per unit price they are each getting a subsidy of £137 million.
Pneumococcal vaccines have been on the market since 2000. Today these two companies sell the same anti-pneumonia vaccines to both wealthy and poor countries. Subsidies to entice Big Pharma to sell to GAVI don’t make sense.
Emerging country suppliers like India’s Serum Institute have said they could sell similar pneumococcal vaccine products for US$2 (£1.25) a dose – a 40 percent reduction on the GSK and Pfizer price.
The executive director of Serum Institute, Dr Suresh Jadhav, said recently that if his company had not faced patent restrictions, the vaccine could have been available by next year – now it is not expected until 2015.
Technology transfer and product development grants to low-cost suppliers are being supported by the Bill and Melinda Gates Foundation, but these sums are dwarfed by the Advance Market Commitment subsidy to Big Pharma.
We owe it to the people in developing countries to make sure that new vaccines are affordable and also capable of being used there.
New versions of pneumococcal and rotavirus vaccines being sold to GAVI were first designed for use in rich countries.
The rotavirus vaccine, for example, which protects against diarrhoeal diseases, takes up large amounts of precious refrigerator space, and can only be given to children under nine months old. Reaching children in remote locations with these vaccines is challenging.
It is concerning that projects to develop adapted vaccines are so limited and under financed despite a high success rate.
The new meningitis A vaccine, launched in late 2010 with help from GAVI, and produced by the Serum Institute, costs less than 30p a dose, and has been revolutionary in preventing meningitis outbreaks.
The technology is not new but, when the vaccine’s development was exclusively in the hands of Big Pharma, Africans went without.
The June 13 conference is to discuss a shortfall in GAVI’s funding. The fact is that GAVI needs to start thinking more affordable vaccines and not simply to bawl for more cash. Of course government donors need to support GAVI, but they need to make their support conditional on GAVI using its buying power to foster competition and to push for adapted products.