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Transparent pricing of vaccines would help poor as well as rich countries

BMJ 2011; 343 doi: https://doi.org/10.1136/bmj.d7414 (Published 23 November 2011) Cite this as: BMJ 2011;343:d7414
  1. Robert Hecht, managing director, Results for Development Institute, Washington, DC,
  2. Miloud Kaddar, group leader, Immunization, Vaccines, and Biologicals Department, World Health Organization, Geneva,
  3. Sarah Schmitt, consultant to the World Health Organization on vaccine price and procurement, Geneva
  1. Correspondence to: R Hecht rhecht{at}resultsfordevelopment.org

The BMJ’s editor, Fiona Godlee, recently challenged the UK government to publish the price it pays for vaccines, including the new vaccine Cervarix, which helps prevent cervical cancer (BMJ 2011;343:d6239, doi:10.1136/bmj.d6239). Price transparency is not just a matter for the United Kingdom, however: it is a point of vigorous debate and growing urgency in countries around the world.1

Until recently, only a handful of nations—notably the United States, through its large public sector vaccine programme for children, run by the Centers for Disease Control and Prevention—published the prices that they were paying for vaccines. Yet the questions of how much taxpayers’ money is being spent on vaccines, and which companies are winning the public tenders, is becoming ever more important as science and industry develop a new generation of life saving vaccines.

Beyond the traditional antigens for measles, tetanus, and polio, new vaccines that prevent childhood pneumonia and rotavirus diarrhoea are now in use, as well as cancer blocking vaccines for hepatitis B (liver cancer) and human papillomavirus (cervical cancer). Better vaccines for typhoid are just a few years away. A first vaccine against malaria is in advanced trials and showing promising results.2

These fruits of government and private sector investment will save millions of lives in the coming years, but they could also come with high prices. Many of the countries that most need these new vaccines are low and middle income nations. For the poorest nations, recent success in raising money from donors for the Global Alliance for Vaccines and Immunisation (GAVI) means that substantial funds are available to help the 70 poorest nations to purchase vaccines, but the countries’ need is immense, and lower prices would mean that this money could go further.

Slightly more than a dozen of these countries, including Bolivia, Angola, and Mongolia, will “graduate” from GAVI over the next few years and will no longer be eligible for GAVI grants from 2016 onward. These countries’ ability to sustain the gains in child health that they have achieved with donor support once they are on their own financially will depend heavily on the prices they have to pay and on their ability to purchase vaccines from international suppliers.

For middle income countries, such as Peru, the Philippines, and Egypt, there is no donor money for vaccines. They have larger health budgets and can bear higher prices for vaccines—but only up to a point. Asking them to pay what the United States and Canada pay for vaccines would make these essential health products unaffordable, with hundreds of thousands of lives in the balance.

The matter of openness in vaccine price seems especially relevant for these middle income countries, which currently find themselves in the dark in negotiating with the manufacturers to buy the new vaccines.

South Africa and Morocco, for example, recently sought to add the vaccines that prevent pneumonia and diarrhoea to their child immunisation programme, and wanted to know how much other countries at similar economic levels were paying for these products. They could hardly find any information because many vaccine sales have been subject to opaque, “confidential” agreements between buyer and seller.

In this context, should vaccine prices be made more widely available, as they are now for the AIDS drugs that are helping to keep more than six million people alive in Africa, South Asia, and elsewhere?3 Would such openness make the vaccines more accessible to those who need them, while still rewarding the companies that spend billions of dollars to develop and make these products, or would its effects be counterproductive?

Some would contend that price transparency would make the vaccine market more efficient by reducing the existing asymmetric information between purchasers and suppliers: if buyers know the prices being paid for vaccines, they will be able to shop intelligently and determine value. And when public funds are involved, taxpayers should know how much they are paying and to whom.

Others say that companies already efficiently price their vaccines in the existing opaque market, offering the highest prices to rich countries and heavily discounted prices to the poorest nations, with rates in between for middle income nations. They argue that greater openness could undermine this system: with prices widely known, governments of rich countries would ask for the lower prices currently paid by poor countries. Vaccine companies, feeling financially under pressure, would then raise the prices being charged to GAVI and the poorest nations.

In recent months, the ground seems to have been shifting in the direction of those who advocate for price transparency. In January UNICEF for the first time published the prices it pays to procure vaccines on behalf of GAVI, which spends upwards of half a billion dollars annually for vaccines.4 For the past several years, the Pan American Health Organization has also been publishing the average price it pays for vaccines on behalf of a group of Latin American countries.5

A team of experts at WHO recently launched a collaborative project to look closely at the question of increasing price transparency. The vaccine product, price, and procurement (V3P) project aims to provide the countries graduating from GAVI support and other middle income nations with accurate and useful information on vaccine prices, their product characteristics, and options for more efficient procurement.

These other non-price factors are also important. To get the best value for money, countries also need information on options for vaccine “presentation” (for example, whether it is available in single doses or multidose vials), the kind of refrigeration required, manufacturer performance, and techniques for soliciting and evaluating supplier bids that lead to the best possible prices. Experience suggests that the quoted vaccine price alone may not fully reflect the true cost to the country of buying and using the product.

The ultimate goal is to make these powerful life saving products more widely available to the children and adults who need them while continuing to compensate the scientists and companies that have invested so much to create these new products. Getting the price right can make a huge difference for the health of children and women—not only in the UK, but in countries around in the world.

Notes

Cite this as: BMJ 2011;343:d7414

Footnotes

  • Competing interests: None declared.

  • Provenance and peer review: Not commissioned; not externally peer reviewed.

References

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