Glaxo, Pfizer Blamed for High Vaccine Prices in Poor Nations

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GlaxoSmithKline Plc and Pfizer Inc. are overcharging for vaccines in developing countries, Doctors Without Borders said, leaving some nations unable to afford shots that reduce child mortality.

Lack of transparency and scant competition has led to “wildly different” pricing by country that doesn’t always reflect ability to pay, the medical aid charity also known as Medecins Sans Frontieres said in a report today. The group called on Glaxo and Pfizer to cut the price of the pneumococcal vaccine, which protects against pneumonia, meningitis and ear and sinus infections, to $5 per child.

“A handful of big pharmaceutical companies are overcharging donors and developing countries for vaccines that already earn them billions of dollars in wealthy countries,” said Rohit Malpani, director of policy and analysis for MSF’s Access Campaign.

About four-fifths of Glaxo’s vaccines, including the pneumococcal medicine, are provided to developing countries at a “substantial discount” to prices in developed nations, Glaxo said in a statement today. Many of the drugs require large upfront investment and the pneumococcal vaccine is “one of the most complex we’ve ever manufactured,” the London-based drugmaker said.

Pfizer and Glaxo have reported more than $19 billion in sales from pneumococcal vaccines, according to MSF. Most of the money has gone to Pfizer, as sales of Glaxo’s Synflorix have totaled less than $3 billion since its introduction, according to Glaxo.

GAVI Funding

The report was timed in advance of a meeting in Berlin next week where donors will be asked to pledge more money to the Geneva-based GAVI Alliance, the biggest provider of money for vaccines sent to developing countries. Nations such as Indonesia and Angola are losing donor support because of increased economic wealth, so their vaccine costs may skyrocket, according to MSF.

Both Glaxo and Pfizer said they are extending discounts to countries that are losing GAVI support.

Glaxo offers its lowest prices to GAVI and Unicef, meaning that some vaccines are provided for as little as one-tenth of the charges in developed countries, the company said. The drugmaker is investing in research projects for neglected diseases such as malaria and Ebola, and is trying to reduce vaccine production costs to pass savings on to poor nations, it said.

Great Complexity

The price of Pfizer’s pneumococcal vaccine Prevenar 13 reflects the fact that it is “one of the most complex biologic products ever developed and manufactured,” the New York-based company said in a statement. It takes more than two years to create one batch of Prevenar 13, with more than 500 quality control tests, hundreds of professionals and multiple facilities.

MSF also said the vaccine industry is “secretive” and often unwilling to reveal prices, with drugmakers saying disclosure would weaken their negotiating position with governments and other purchasers, and perhaps drive up prices to poor countries.

Of the nine companies contacted by MSF, four shared their prices: Bio Farma, Biological E, Panacea and Serum Institute of India. Glaxo, Pfizer, Merck & Co. and Johnson & Johnson’s Crucell division shared information on pricing strategy or vision, and Sanofi didn’t reply by MSF’s deadline.

Since 2000, GAVI has contributed to the immunization of 440 million children and the prevention of an estimated 6 million deaths, according to the organization, which is funded by governments and the Bill & Melinda Gates Foundation.