Vaccines for the poor deal announced

GlaxoSmithKline and Pfizer have agreed to provide pneumococcal vaccines to the under-developed world at a discounted rate. The agreement was brokered by the Global Alliance on Vaccines and Immunization. The deal will set a maximum price that the drug makers will receive, in exchange for a guaranteed market for the vaccinations. The GAVI Alliance hopes to strike more deals like this in the future to provide drugs for other diseases to the under-developed world.

From Reuters, we find more details about the agreement.

Under the terms of the AMC (Advance Market Commitment) 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 dollars for the remaining 80 percent.

The higher price is only paid for the first tranche of doses so as to ensure the drug firm'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 around 40 euros ($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.