Q&A: A Fair Shot

On April 23, 2015, Doctors Without Borders/Médecins Sans Frontières (MSF) launched a global campaign—"A FAIR SHOT"— to call on pharmaceutical companies GlaxoSmithKline (GSK) and Pfizer to slash the price of the pneumococcal vaccine in developing countries to US$5 per child, so more children can be protected from this childhood killer, and to disclose what they currently charge countries for the vaccine.

Read the Press Release: MSF Kicks off Global Campaign to Reduce the Price of Pneumonia Vaccine to $5 in Developing Countries

Why has MSF launched this $5 call now?

MSF, like governments and health professionals, has faced a huge increase in vaccine prices over the past 14 years. At today’s lowest global prices, the price to fully vaccinate a child is 68 times more than that it was just over a decade ago. This has become a huge challenge for many in the world to get the most vulnerable children protected from some of the deadliest diseases. After years of fruitless negotiations with the manufacturers of the pneumonia vaccine—GlaxoSmithKline and Pfizer—we have decided to take our call public. This is why, over the next few months, MSF will rally people to take action and #AskPharma to slash the price of the pneumonia vaccine to $5 per child—for all three doses—in developing countries.

Why are vaccines so expensive?

At today’s lowest global prices, the price to fully vaccinate a child is 68 times the price that it was just over a decade ago. This is largely due to a lack of competition in the new vaccines market, where there are only two manufacturers (a duopoly) for several new vaccines, including the pneumonia vaccine (PCV—produced by GlaxoSmithKline and Pfizer), and a severe lack of information on vaccine prices.[1] Without pricing information, for countries trying to make smart purchasing decisions for vaccines—finding the best price—is like shopping in the dark. This results in irrational pricing: Morocco and Tunisia each pay more for the pneumonia vaccine than France does[2].

Why is more information on vaccine prices the key to making vaccines cheaper?

Increasing information on vaccine prices is essential in allowing countries to compare prices and ultimately negotiate better deals to vaccinate their children. It’s very difficult to buy a product and expect to get a fair price if you have no idea what the price should be. WHO has recently recommended that more vaccine price data be made available so countries can see what others are paying. Promoting healthy market competition and sharing information on production and manufacturing costs could also help drive prices down drastically.

For the PCV, we know that increased competition will not happen any time soon, as no new manufacturers are expected to enter this market for several years. Pharmaceutical companies, like most companies, won’t share their cost structures unless governments and people put tremendous pressure on them to do so—which is why we are urging people to mobilize to #AskPharma and help apply this pressure.

MSF is asking GSK and Pfizer to slash the lowest global price of the pneumococcal vaccine, and offer it at $5 for all developing countries—how did you come up with $5 as the target price?

GSK and Pfizer have already reaped more than $23 billion in sales for this vaccine since its launch, the majority from sales in wealthy countries. Meanwhile, vaccine manufacturer Serum Institute of India has publicly stated that it plans to sell the vaccine for $6 for all three required doses when it brings its version of the vaccine to market in several years’ time. Today’s lowest global price for the pneumonia vaccine (provided to the poorest countries through Gavi) is roughly $10 per child (for three doses); Gavi released an evaluation of this price (2012) that concluded the price Gavi pays is likely well more than the cost to make the vaccine.

Given the Indian company’s price target, and Gavi’s evaluation conclusion that with the $10 price GSK and Pfizer are still making a sizeable profit off of the PCV vaccines they sell to Gavi, MSF believes the price could come down to $5 per child. MSF doesn’t believe lifesaving vaccines should be big business in poor countries; the companies should do their part to reduce the price, lowering the overall cost to immunize a child, and helping donor money go towards vaccinating more children or giving countries a chance to be able to afford the vaccine—not lining the pockets of Big Pharma.

Pfizer and GSK say that they are already doing their best to reduce the price of the pneumococcal vaccine. Is this true?

We are faced with an artificial system that maintains unreasonably high prices for most countries, while still reaping profits off the backs of the poorest countries. GSK claims that they don’t make any profit off of PCV, and Pfizer says they sell it at a loss to Gavi. The reality is that the companies have not been transparent with their costs, nor have they allowed any audit of their books, so nobody knows what the real cost is to make the vaccine.

Both companies have already accumulated more than $23 billion in sales from their pneumococcal vaccines, so we believe the cost to developing countries should be as close to the production cost as possible. We have heard many officials of developing countries who do not receive any Gavi support say that they cannot afford the PCV vaccine for their children.

How much does the pneumonia vaccine cost now? 

The price charged for the PCV vaccine for the poorest countries—procured through Gavi, the Vaccine Alliance—is around $10 for three doses. However, to make matters more complicated, a $1.5 billion "incentive" for GSK and Pfizer to provide the vaccine early to these countries has left Gavi paying up to $21 for the three doses for as long as the $1.5 billion lasts (it is almost used up now).

After that subsidy is used up, the long-term price is set at around $10 per child. More than 30 percent of Gavi-eligible countries will lose support starting next year and will be required to pay around $10 for three doses on their own, which will be unaffordable for many. Once countries lose access to Gavi’s lowest price, they could pay as much as six times more for the PCV vaccine.

Middle-income countries and countries not eligible for Gavi financial support or access to its $10/child price pay far more. Morocco and Tunisia pay over $63 and over $67 per dose for PCV, respectively—over $190 and more than $200 per child.

Why has MSF accepted in-kind donations of the pneumonia vaccine (PCV) from GSK and Pfizer?

MSF worked with GSK and Pfizer for five years fruitlessly to negotiate a fair and sustainable price for MSF to purchase PCV. Because this effort failed, MSF had no choice but to accept a donation from the companies. MSF has signed multi-year donation agreements to secure a supply of pneumonia vaccine that can be rapidly deployed to vaccinate children caught in on-going crises.

The agreements are a notable exception to MSF’s policy not to accept donations from corporations whose income comes from the production and/or sale of tobacco, alcohol, arms, pharmaceuticals, and mineral, oil, gas or other extractive industries. While MSF is thankful for donations of PCV that help us vaccinate vulnerable children against pneumonia in some of our emergency operations, donations are not MSF's preferred solution for meeting its medical operational needs, as they are not sustainable. 

What could countries and donor countries do better?

Governments supporting Gavi must pressure companies to disclose the price they charge for the pneumococcal vaccine in all countries. On January 27, in Berlin, donor countries and private foundations pledged more than $7.5 billion in donations to Gavi, to vaccinate children in the poorest countries. While this is good news for some of the most vulnerable children, very few people questioned why more than one-third of the budget is going to pay for the pneumonia vaccine alone.

Additionally, Gavi does not support most of the countries that have continuously voiced their frustration at not being able to afford the PCV vaccine to protect their children. Countries must hold Gavi to better account, and demand GSK and Pfizer reduce the price of PCV and ask them to open up the books on the vaccines’ cost and prices charged to all countries.

Click Here to See Photos and Follow the Campaign

[1] Similarly, the rotavirus vaccine (against diarrhea) is only made by GSK and Merck; the human papillomavirus vaccine (against cervical cancer) is only made by GSK and Merck.

[2] Morocco pays US$63.70 and Tunisia $67.30 for PCV, while France pays $58.40. Morocco and Tunisia prices are those paid in hospitals and public institutions; France’s price is the manufacturer price (before it enters the wholesale and retail distribution network). Prices quoted are for Pfizer’s PCV13.