Drugmakers extend cut-price pneumonia vaccine deal

Fri Dec 16, 2011 7:00am EST

* Goal to prevent pneumonia, meningitis, sepsis in poor nations

* Pfizer and GSK increase pneumococcal sales more than 50 pct

* GAVI to buy extra doses of Prevenar 13, Synflorix at $3.50

By Ben Hirschler

LONDON, Dec 16 (Reuters) - Pfizer and GlaxoSmithKline are increasing sales of cut-price pneumonia vaccine to developing countries by more than 50 percent, marking the scale-up of an international programme to protect millions of children.

The Global Alliance for Vaccines and Immunisation (GAVI) is buying an additional 180 million doses of Pfizer's pneumococcal vaccine Prevenar 13 and a similar quantity of GSK's Synflorix at a deeply discounted price of $3.50 a shot.

The two companies said on Friday they would supply the extra vaccine through 2023, building on an original commitment last year to supply 300 million doses apiece.

The GAVI Alliance, a public-private partnership set up in 2000 to speed the introduction of vaccines into the world's poorest countries, hopes to avert up to 7 million deaths by 2030 by giving the vaccines to infants and young children.

Pneumococcal disease, which can cause pneumonia, meningitis and sepsis, kills more than half a million children every year, the vast majority of them in poorer countries.

GSK's Synflorix protects against 10 strains of the streptococcus pneumoniae bacterium, while Pfizer's Prevenar 13 shot protects against 13 strains.

In exchange for large orders, GAVI has negotiated a low price with the two drug companies, which get $7 per dose for the first 20 percent and $3.50 for the remainder of their orders under a so-called Advance Market Commitment (AMC) scheme.

A Pfizer spokeswoman said $3.50 was a more than a 90 percent reduction from prices charged in some industrialised countries.

The pneumococcal vaccination programme was initially started a year ago in Nicaragua and has now been rolled out to 15 other countries in Africa and Latin America.

The latest agreement shows how momentum is building behind the GAVI programme, even as experts worry about funding cutbacks in other areas of global health due to austerity measures in donor countries hit by the economic crisis.

The Global Fund to Fight AIDS, Tuberculosis and Malaria, the world's largest financial backer of HIV treatment and prevention programmes, said last month it was cancelling new grants for countries battling these diseases and would make no new funding available until 2014.

By contrast, GAVI secured a bigger-than-expected $4.3 billion in pledges from its donors last June, reflecting widespread acknowledgement of the value of its immunisation work.

Overall, development assistance for health in all forms has continued to grow in 2011, although the rate of growth has slowed, the Institute for Health Metrics and Evaluation in Seattle said in a report this week.

It estimated that spending increased by 4 percent each year between 2009 and 2011, reaching a total of $27.7 billion, down from 17 percent between 2007 and 2008.

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