"Scandalously expensive"
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.
GAVI conference
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.
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