Pneumonia vaccine price drops dramatically for lower-income countries thanks to the Gavi Pneumococcal AMC

Lower-income countries across the world will now be able to access life-saving pneumococcal conjugate vaccines, which protect against the leading cause of pneumonia, for US$ 2 per dose, thanks to a new supply agreement between UNICEF, Gavi’s procurement partner, and the Serum Institute of India (SII). The new price represents a 43% reduction from the Gavi price of US$3.50 at the start of the AMC.

The supply agreement is the eighth to take place under the Vaccine Alliance’s Advance Market Commitment (AMC) mechanism, and the first to include a developing country manufacturer. Under the agreement, the Indian manufacturer will provide ten million PCV doses to Gavi-supported countries each year for the next ten years.

The pneumococcus bacterium is the leading cause of severe pneumonia and is a major cause of morbidity and mortality worldwide. Most of these deaths occur in lower-income countries and include a disproportionate number of children under the age of two.

The AMC, which is set to end this year, was launched by Gavi in 2009 – with the support of donors Italy, the United Kingdom, Canada, Russia, Norway, and the Bill & Melinda Gates Foundation – to solve a clear example of market failure: complex vaccines like PCV would normally reach low-income countries, where the disease burden is often highest, ten to 15 years after their introduction in industrialised countries. The AMC mechanism incentivised research and development (R&D), particularly for vaccines suitable for developing country epidemiological contexts, and an expansion in manufacturing capacity to meet demand from lower-income countries while maintaining an affordable price per dose.

A decade later the results are clear: the PCV vaccine has now been introduced in 60 lower-income countries, where coverage rates, at 48%, are now higher than the global average of 47%. Estimates indicate that more than 225 million children will have been vaccinated and that over 700,000 deaths will have been prevented by the end of 2020. In that time, the AMC has catalysed a steady decrease in PCV prices and thanks to this eighth supply agreement will be closing this year having facilitated the entry of a new manufacturer to the market as well as a record-setting low price for Gavi-supported countries that will result in estimated millions of dollars in savings for both Gavi and lower-income countries’ vaccine budgets.

“This is fantastic news, which will make this highly effective, lifesaving vaccine even more affordable for the world’s poorest countries, and is a testament to the success of Gavi’s Pneumococcal AMC mechanism, which has now achieved everything it set out to do,” said Aurelia Nguyen, Gavi’s Managing Director for Vaccines and Sustainability. “Thanks to this visionary model we have a healthy PCV market that is producing enough vaccines to supply both rich and poor countries and, as a result, hundreds of millions of children are now protected against one of the world’s deadliest diseases.”

At last week’s Global Vaccine Summit, Gavi launched the Gavi Advance Market Commitment for COVID-19 Vaccines (Gavi Covax AMC), a new financing instrument aimed at incentivising vaccine manufacturers to produce sufficient quantities of eventual COVID-19 vaccines and to ensure access for developing countries.

Original source: Gavi
Published on 16 June 2020