Drugmakers agree on landmark vaccines deal for poor

LONDON (Reuters) - Several drug firms have agreed on a landmark deal to supply up to 200 million doses a year of cut-price pneumococcal vaccines to developing nations, according to the global immunization alliance that is overseeing the deal.

Leading manufacturers of such vaccines include GlaxoSmithKline and Pfizer.

The agreement is the first under a new scheme called an Advance Market Commitment (AMC), which provides a guaranteed market for vaccines supplied to poor nations but sets a maximum price that drugmakers can expect to receive.

It is likely to pave the way for future deals on recently introduced vaccines against rotavirus, which causes severe diarrhea, and an experimental one against malaria, which combined kill millions in poor countries each year.

The GAVI Alliance (Global Alliance on Vaccines and Immunization) said details of the pneumococcal deal would be announced in the coming weeks.

"Decisions have been made and we are hoping for an announcement very shortly -- in the next couple of weeks," GAVI's deputy chief executive officer Helen Evans told Reuters in an interview on Thursday.

"It's very exciting news because they are going to make long-term commitments."

Pneumococcal disease is one of the world's biggest killers of children, claiming up to 1.6 million lives each year. Africa and Asia together account for 95 percent of all deaths from pneumococcal disease, which causes serious illnesses such as pneumonia and meningitis.

Glaxo's pneumococcal vaccine, called Synflorix, protects against 10 strains of the streptococcus pneumoniae bacteria which cause the disease. It was approved late last year by the World Health Organization for use in developing countries.

Pfizer's Prevnar 13 shot protects against 13 strains and won the approval of U.S. regulators earlier this month.

Under the terms of the AMC tender, drugmakers were required to make a 10-year commitment to supply a share of the total forecast demand of 200 million doses a year.

Evans said each manufacturer would have a minimum volume order guaranteed in return for a price of $7 per dose for the first 20 percent supplied, dropping to $3.50 dollars for the remaining 80 percent.

The higher price is only paid for the first tranche of doses so as to ensure the drug firm's research and development costs are covered. Beyond that, $3.50 is the maximum price GAVI and countries will pay for the vaccine.

By comparison, Glaxo charges around 40 euros ($54) per shot for Synflorix in Europe.

The AMC scheme was devised to try to encourage drug companies to make and supply medicines and vaccines to boost health in poorer countries, which are generally unable to afford the high prices paid in Western markets. GAVI and its partners say they plan to introduce pneumococcal vaccines in 42 developing countries by 2015.

Officials at both Glaxo and Pfizer confirmed they had been working with GAVI on the supply agreement.

"We remain committed to participating in this initiative and hope to be one of the first companies to supply its vaccine," Glaxo spokeswoman Claire Brough said in an emailed statement.

The pneumococcal deal will be partly funded by Britain, Italy, Canada, Russia, Norway and the Bill & Melinda Gates Foundation, who agreed in June last year to invest a total of $1.5 billion in the project.

If it proves successful, existing and new donors have said they would be interested in supporting more AMC schemes, including one for malaria.

Glaxo struck another long-term deal for its pneumococcal vaccine worth 1.5 billion euros with Brazil last September, guaranteeing sales for 10 years.