The Lancet, Volume 374, Issue 9705, Pages 1879 – 1880, 5 December 2009
The Global Alliance for Vaccines and Immunisation is at loggerheads with experts critical of the financing mechanism that it administers for pneumococcal vaccines. Ann Danaiya Usher reports.
The US$1·5 billion Advance Market Commitment (AMC) for pneumococcal vaccines was officially launched in June, 2009, at the G8 Summit in L’Aquila, Italy. With funding provided by Italy, the UK, Canada, Russia, Norway, and the Bill & Melinda Gates Foundation , the idea of the AMC is that it creates a market for vaccines that target developing country diseases by putting up a large subsidy and fixing the price at which vaccines are to be sold. But finding the right price has been a key stumbling block for the donors since the scheme was proposed by Italy in 2005.
Today the AMC is close to being realised with four companies expressing interest in supplying vaccine through the initiative. But unanswered questions remain about what this innovative funding mechanism will really cost and what it will achieve.
The initiative that was presented in L’Aquila sets the price per dose to be paid to participating firms at $7 per dose. 18 months earlier, donors were considering a much higher price.
An expert group headed by Ruth Levine, a senior fellow at the Center for Global Development—a think-tank based in Washington, DC, USA—had studied the options, and held consultations with vaccine producers to get a sense of their pain threshold. Days prior to what was meant to be the last meeting of the AMC donors (May, 2008) to hammer out the final details of the scheme, Levine’s group presented a report to the donors in which they recommended a price of $10 per dose.
Norway, alone among the donors, argued that this was too high and feared that the terms were being set “on industry’s premises”. Internal documents show that Norway insisted that the price should not be higher than $7, and managed to convince the other donors to agree.
The Global Alliance for Vaccines and Immunisation (GAVI) says that the initiative will save 7 million lives by 2030. A logical question is what was gained by pushing the price down by 30%? How many more lives are expected to be saved with this AMC compared with the higher price of $10? The difficulty of finding clear answers to these questions indicates one of the fundamental problems of the years-long AMC process: the lack of transparency in the deliberations, which has hampered informed public debate about this huge aid-financed project.
Promoters of the AMC say that in terms of lives saved, nothing was gained. “If a higher AMC price had been chosen, the same number of lives would have been saved”, says Tania Cernuschi, AMC manager at GAVI.
Ruth Levine concurs. “The number of doses is independent of the AMC price—although I realise it does sound a little counter-intuitive”, she says.
The reason given is complicated. Through the scheme, companies commit to supply a certain number of doses over 10 years. In the initial phase, the price is $7 per dose, after which the firms continue to supply the vaccine at a tail price that cannot exceed $3·50. GAVI covers most of the tail price for the remaining 10 years with developing country governments contributing a small share. GAVI hopes that companies will offer a price below $3·50 and that donors will provide GAVI with additional funds to purchase the vaccines, so that they can immunise more children.