Research Today, Money Tomorrow, and the Vaccine Takes Off

Vaccines included in immunization programs are generally very efficient, because they cost relatively little and afford high health benefits. However, oftentimes there are no effective vaccines for pathologies disproportionately affecting poor countries, and even if vaccines are available, they reach these countries with years of delay and remain under-utilized. So financial tools are needed to generate additional resources over a predictable time-span, so as to provide R&D with incentives to develop vaccines for poor countries and favor their diffusion.

Following the birth in 2000 of the Global Alliance for Vaccines and Immunizations (GAVI), a global partnership to increase access to vaccines in LDCs (countries with per capita GDP of less than $1,000), two innovative instruments were launched. The first is the International Finance Facility for Immunization (IFFIM), a financing mechanism based on the issuing of assets on financial markets, backed by donor countries which warrant their reimbursement over twenty years. Resources generated via such mechanisms have been immediately reinvested in immunization programs destined to the countries supported through GAVI. Since its inception in 2006, IFFIM has achieved important results, raising almost $2 billion on financial markets. The second tool, Advance Market Committment (AMC) has the objective of providing incentives for the private sector to develop and produce vaccines that are tailored to the needs of least developed countries. It's a mechanism by which donor countries engage themselves to the future purchase - at pre-set prices for a given duration – of vaccines that are effective in poor countries. The pharma producer that is beneficiary of AMC must also supply the vaccine at a sustainable price (which is also fixed in advance) for an additional period of time after initial the agreement elapses. An AMC pilot project was launched at the beginning of 2009. It concerns a vaccine targeting Streptococcus pneumoniae in children, which is responsible for almost one million deaths a year, 90% in poor countries, and was funded for $1.5 billion by some governments (including Italy) and the Bill and Melinda Gates Foundation. AMC is attractive because it's a promise to finance a vaccine in the future, if it meets certain requirements, and because it creates a private market of vaccines destined to poor countries. Also, since it's a promise and not an actual disbursement, it doesn't weigh on national accounts of donor countries. However, it's a very complex mechanism around which certain doubts remain. The market for vaccines is not very competitive: there's a limited number of producers, and whenever a new vaccine enters the market, it immediatly supersedes the existing ones.

In such a context, it's hard to determine the long-term price of a vaccine which is not yet available. Also, it remains to be seen whether AMC finance for antipneumococcus vaccine will only go the two multinationals that are currently developing it (GlaxoSmithKline and Wyeth) or also to pharma companies hailing from the South of the world: without the latter it's hard to see how prices of vaccines can decline to a level that makes them affordable in least developed countries.

While IFFIM seems a decidedly positive development to favor access to immunization in poor countries, the case of AMC looks less persuasive.