Drugmakers agree on vaccines deal for developing nations

LONDON — Several drug companies 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, 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 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," Helen Evans, GAVI's deputy chief executive officer, told Reuters in an interview March 11.

"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 account for 95 percent of all deaths from pneumococcal disease, which causes illnesses such as pneumonia and meningitis.

Glaxo's pneumococcal vaccine, Synflorix, protects against 10 strains of the Streptococcus pneumoniae bacteria that cause the disease. The World Health Organization approved it late last year 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 for the remaining 80 percent.

The higher price is only paid for the first tranche of doses so as to ensure the drugmaker'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 about $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 e-mail.

The pneumococcal deal will be partly funded by Britain, Italy, Canada, Russia, Norway and the Bill & Melinda Gates Foundation, which agreed in June to invest $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.