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MSF Responses to Announcement on Vaccine Price Reductions

Today, several pharmaceutical companies announced price reductions and price offers for the vaccines they sell to the Global Alliance for Vaccines and Immunisation (GAVI), which finances the purchase of new and under-used vaccines for over 50 developing countries. Significant price reductions are a welcome development, for GAVI, which faces a funding shortfall.
Challenges remain and further progress can be made to realising lower long-term prices through competition and developing better-adapted vaccines:
New development: GlaxoSmithKline (GSK) lowers the GAVI price of its rotavirus vaccine from $7.50 per dose to $2.50 a dose. Merck announces they will offer reduced prices for GAVI as well, and lower their price from $5 to $3.50 a dose after selling 30 million doses.
What challenges remain?
· The GSK price decrease is welcome news—GAVI has stated it will save them approximately $500 million through to 2020. However, donor countries are also paying GSK US $225 million subsidy for another vaccine—pneumococcal conjugate (PCV)—through the Advance Market Commitment (AMC). The AMC gives a total of $1.5 billion in subsidies, on top of the price of the vaccine, to companies that agree to sell their PCV to GAVI at reduced prices.
· Current rotavirus vaccines are particularly challenging to introduce in lowresource settings found in many GAVI countries. Lower prices are one component to greater vaccine accessibility, but lower volume, improved stability, and other improvements in product characteristics would also make the rotavirus vaccine more practical for introduction in GAVI countries. For example the GSK vaccine must be given to children under eight months old, which can be very difficult in practice. 
New development: Serum Institute lowers the price of their pentavalent vaccine to $1.75 a dose. Crucell (a Johnson & Johnson subsidiary) and Shantha Biotechnics, Ltd. (a subsidiary of Sanofi Pasteur) announce that countries seeing GAVI support end in 2015 will be able to continue purchasing their pentavalent products at the prices offered to GAVI.
What challenges remain?
· Crucell and Shantha have the highest prices for pentavalent vaccines sold to UNICEF, so their offer to continue providing GAVI-graduating countries with GAVI prices would be more welcome if it was coupled with price reductions. Crucell sells pentavalent to GAVI for $3.20 a dose, and in 2009 received approximately one-third of its annual revenue from sales of pentavalent to UNICEF. It will also rotate onto the GAVI Board in July.
Basic information on GAVI Vaccines
What is rotavirus vaccine?
Rotavirus vaccines protect against several forms of diarrhoeal diseases. Two vaccines are pre-qualified by the World Health Organisation and can therefore be sold to GAVI. The GSK product requires two doses, for a total new cost of $5 per child vaccinated. A Merck product, which requires three doses, costs $15 per child vaccinated (which will fall to $10.50 per child following sales of 30 million doses to GAVI). Until today, GSK had charged $5 a dose, also for a total cost of $15 per child vaccinated.
What is pentavalent vaccine?
Pentavalent vaccines protect against five diseases: diphtheria, tetanus, pertussis (whooping cough), hepatitis B (HepB), and haemophilus influenzae type B (hiB). A full course requires three doses. Currently, five suppliers sell pentavalent vaccine to GAVI through UNICEF.
Prices of pentavalent and other vaccines purchased by UNICEF (which purchases vaccines for GAVI) can be seen online 
Page updated: 6 June 2011
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