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Drive pays off, vaccine price may fall more

Drive pays off, vaccine price may fall more

Bangalore: Almost a decade after the Global Alliance for Vaccines and Immunization (GAVI) was set up, the grouping meant to immunize children globally and prop up the floundering vaccine industry has not only revived the sector by financing 130 million doses so far—including vaccines worth about $45 million (Rs208 crore today) in India between 2002 and 2007—but also driven down costs, enabling even non-member nations to benefit.

At the GAVI Partners Forum in Hanoi on Tuesday, the United Nations Children’s Fund (Unicef), which buys most of the vaccines financed by GAVI, said it would purchase 148 million doses of pentavalent vaccine—which provides protection against five major childhood diseases—in 2011 and 150 million in 2012. The average price per dose has fallen below $3 and will reduce further to $2.94 in 2010 and 2011, and $2.83 in 2012. In 2004, the vaccine had cost $3.65 per dose.

A reason for the drop in prices, according to GAVI and Unicef, is the entry of two Indian manufacturers of pentavalent vaccines in 2008—Shantha Biotechnics Ltd, recently acquired by French drug maker Sanofi-Aventis SA, and Panacea Biotec Ltd.

Two more Indian companies, Serum Institute of India Ltd and Bharat Biotech International Ltd, are ready to enter the pentavalent vaccine market next year, said Krishna M. Ella, chairman and managing director of Bharat Biotech, which will apply to the World Health Organization (WHO) for a pre-qualification approval, which is required for drugs to be purchased by Unicef.

The current fall in price will create about $55 million in savings in 2010 and enable GAVI to finance the immunization of 6.3 million more children. GAVI, set up by a start-up grant of $750 million by the Bill and Melinda Gates Foundation in 1999, is a global partnership reaching out to 72 countries, including India.

“This is the GAVI effect at work: encouraging and pooling growing demand from countries, attracting new manufacturers, and increasing competition to drive down prices," said GAVI chief executive Julian Lob-Levyt. “The price drop has come later than we had hoped and it needs to fall further. But this is a clear indication that our market-shaping efforts work."

Indian vaccine companies, which have in many ways thrived due to Unicef and other agencies’ advance purchase policy as the Indian government hardly formulates such agreements, say the increase in sales due to global programmes has brought down the domestic prices as well.

“We (Indian companies) sell vaccines in the local market or to government programmes either at Unicef or slightly lower prices," said Ella. “So, as volume builds in the global immunization programmes, prices will be lowered locally too."

He, however, added that the price of combination vaccines such as pentavalent can drop only to a certain extent as “the combination chemistry is complex technology".

GAVI, bolstered by the earlier success of its tetravalent vaccine price reduction, where a savings of $27 million allowed 22 million more children to be vaccinated, is now planning to bring some forthcoming new vaccines for diseases such as rota virus, human papillomavirus (cervical cancer), pneumococcal and malaria under its ambit, said Jeffrey Rowland, media and communications director at GAVI.

But experts say the issue shouldn’t be about cheap vaccines, but about vaccine security so that developing country manufacturers, like other stakeholders, including the payers, get adequate returns.

Panacea Biotech continues to be sensitive to the cost, said Rajesh Jain, its managing director. Along with developing country manufacturers, we’d want to remain competitive so that we are profitable and continually invest in research and development, he added.

“We want to partner with GAVI, Unicef and WHO as stakeholders, not as suppliers," Jain said.

Unicef says additional quantities of pentavalent vaccines could be awarded over the next three years, and “should Indian manufacturers have their vaccines pre-qualified, they could be considered for awards like all other new manufacturers, which have their vaccines pre-qualified".

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