HEALTH: Strategy to Cut Vaccine Price Paying Off

By Eli Clifton Reprint | | Print |

Eli Clifton

WASHINGTON, Nov 18 2009 (IPS) - The price of a major combination vaccine called the ‘pentavalent’ has fallen considerably over the past year, bringing the cost per dose below three dollars – a decrease of almost 50 cents, according to data released Wednesday by an alliance of public and private partners who have worked to bring down vaccine prices in the developing world.

Pentavalent is a childhood vaccine that protects against Haemophilus influenzae type b (Hib), diphtheria, pertussis, tetanus and hepatitis B.

The news of the price drop, which is projected to create 55 million dollars in savings in 2010, was released in Hanoi, Vietnam at the Global Alliance for Vaccines and Immunisation (GAVI) Partners Forum. The money saved will finance the immunisation of 6.3 million children, according to a GAVI statement.

By the end of this year, more than four million deaths will be averted by pertussis, Hib and hepatitis B through GAVI support and 256 million children in the world’s poorest countries will have received vaccines through GAVI support, the alliance said Wednesday.

GAVI has worked to lower vaccine prices and streamline vaccine markets by pooling demand from countries and increasing competition to bring down prices.

“The price drop has come later than we had hoped and it needs to fall further. But this is a clear indication that our market-shaping efforts work,” said GAVI CEO Julian Lob-Levyt.

“Its price, and those of other GAVI vaccines, is the major determinant of the future support that the GAVI Alliance will be able to provide to countries,” said Lob-Levyt.

GAVI works with a number of partners, including the World Health Organisation (WHO), the U.N. children’s agency UNICEF, The World Bank Group, the Bill and Melinda Gates Foundation, governments of donor and developing countries, the vaccine industry in the developed and developing world, research institutes and civil society organisations.

While GAVI works to lower the costs of vaccines produced by the vaccine industry, the majority of vaccines financed by GAVI are purchased by UNICEF.

The drop in vaccine price for 2010 was confirmed by Ibrahim El-Ziq, chief of the Immunisation Centre at UNICEF who announced that by 2010 he expects UNICEF to pay 2.94 dollars per dose of pentavalent vaccine.

In 2004, pentavalent cost 3.65 dollars per dose but projections for future costs indicate that the vaccine will cost as little as 2.83 dollars per dose by 2012, a reduction of 22 percent over an eight-year period.

GAVI attributes this decline in vaccine price to their coordinated buying policies.

“This price drop is no accident, but rather the result of a strategy to leverage the purchasing power of hundreds of millions of people,” UNICEF Deputy Executive Director Saad Houry said in statement.

“Clearly, industry understands and responds to a market, regardless of whether that market is in poor or rich countries. The Alliance’s model is beginning to work, and we are optimistic that the trend will continue, as competition and demand increase over time,” Houry continued.

GAVI’s model predicts that rising demand for immunisation in developing countries induces more companies to produce vaccines – particularly in the developing world – thereby creating competition and driving prices down.

In 2001, only one company produced the vaccine, but by 2008 the number of manufacturers had grown to four – two of which were in India – and half of the vaccines funded by GAVI come from manufacturers in developing countries.

Since GAVI’s launch in 2000, vaccine prices have not dropped as quickly as hoped, but the new data suggests that the alliance’s efforts may be bearing fruit.

“The challenge we face, particularly in the midst of the financial crisis, is to maintain and extend our gains with basic vaccines while ensuring that new life-saving innovations are made widely available in the developing world – especially new vaccines against pneumococcus and rotavirus, the leading causes of pneumonia and diarrhea mortality respectively,” said Dais Mafubelu, assistant director-general for Family and Community Health at the World Health Organisation.

While GAVI is quick to promote the recent data which shows a reduction in vaccine costs, board member and former U.N. high commissioner for human rights Mary Robinson reminded those attending the meeting in Hanoi that while progress has been made, more than 20 million children continue to go without basic vaccines.

“Our alliance is not providing charity but rather securing a basic human right, which is the right to equal access to basic standards of health,” said Robinson.

“It is time to recognise that the availability of life-saving vaccines for children worldwide, regardless of where they live, is not a luxury but a fundamental right,” she continued.