TOWARDS A FAIR GLOBAL SYSTEM FOR VACCINE PRICING: HOW TO ADDRESS THE MICS CHALLENGE?

The best shot: reaching 22 million missed children

MSF seminar on accelerating access to vaccination Oslo, 14 October 2013

Suerie Moon, MPA, PhD Co-Director and Research Director, Forum on Global Governance for Health,

Harvard Global Health Institute and Harvard School of Public Health

Co-Director, Project on Innovation and Access to Technologies for Sustainable Development

Sustainability Science Program, Harvard Kennedy School of Government

Middle-income countries (MICs)

LIC 12%

LMC 35%

UMC 34%

HIC 19%

Population LIC 1%

LMIC 7%

UMIC 22%

HIC 70%

Global GDP (2010)

LIC 25%

LMIC 56%

UMIC 19%

Global Population <$2/day

MICs challenges

Rely less on aid (DAH)

Price negotiations

New vaccines

$-

$2

$4

$6

$8

$10

LIC LMIC UMIC

DAH per capita

Prices & GDP

$-

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

GAVI avg Macedonia South Africa PAHO avg Brazil US

Pneu

mo

vax

pric

e/do

se

GD

Ppc

(201

0)

GDPpc (2010) Pneumo prices

Tiered pricing: best strategy?

3 Major weaknesses:

a) Price: reductions not reliable, not lowest

b) Arbitrary: categories and price premiums

c) Responsibility: firms or governments?

Source: Moon S, Jambert E, Childs M, von Schoen-Angerer T. 2011. “A ‘win-win’ solution?: A critical analysis of tiered pricing to improve access to medicines in developing countries.” Globalization and Health 7:39. doi:10.1186/1744-8603-7-39. Available: www.globalizationandhealth.com/content/7/1/39/abstract

Tiered prices respond to competition: Evidence from Malaria

Source: Moon, S., Pérez Casas, C., Kindermans, J., de Smet, M., & von Schoen-Angerer, T. (2009). Focusing on Quality Patient Care in the New Global Subsidy for Malaria Medicines. PLoS Medicine, 6(7), e1000106. doi:10.1371/jounal.pmd.1000106

Generic Competition and HIV Treatment Scale-Up

0

1

2

3

4

5

6

7

$0

$100

$200

$300

$400

$500

$600

$700

$800

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Mill

ions

People in LMICs on treatment Lowest generic price first line ARV regimen

Originator price of first-line ARVs

$10,400 $2700

Arbitrary: prices & categories

No norms, no transparent basis for pricing

Evidence from HIV: 33 ARVs with Category 1 (~LICs) and Category 2 (~MICs) prices Difference Cat 1 & 2 pricing: 20-1353 USD; 4.5% to 177% Wide variation classifications:

Per capita GNI (low vs middle-income countries)* Disease burden (eg HIV) UN-classified Least-Developed Countries Human Development Index Regions

Fair price? Which countries should pay more, how much more? On what grounds? Who decides?

Government responsibility: HICs vs LMICs

Government regulation (e.g. in HICs):

Reference pricing Reimbursement rates

Formulary Price controls Pooled procurement

Pharmacoeconomic assessments

Compulsory licensing

Tiered pricing, sellers decide : Price Which countries eligible

For how long Other conditions Criteria for decisions not

transparent

Towards a fair global pricing system

Principled objectives Affordability Security of supply Reward R&D Fair burden-sharing Public responsibility

Short-term Pooled procurement Forecasting Graded price premium… …transparent rationale, data & objective criteria Government engagement

Towards a fair global pricing system

Principled objectives Affordability Security of supply Reward R&D Fair burden-sharing Public responsibility

Mid-to-Long term Competition (tech transfer) Multisource supply Proportional contribution to transparent R&D costs Intergovernmentally agreed framework

0

10

20

30

40

50

60

70

Pric

e U

SD

Population (hundred millions)

Cost of goods Reward for innovation

LIC 1%

LMIC 7%

UMIC 22%

HIC 70%

Global GDP (2010)

A Fairer Global Vaccine Pricing System

Conclusions

1. Fair, politically-sustainable global system for vaccine pricing is in everyone’s interest

2. Pro-active interventions needed to fix a dysfunctional pricing ‘system’ to ensure access to vaccines for all

LIC 25%

LMIC 56%

UMIC 19%

Global Population <$2/day

Thank you / Tusen takk Questions & comments welcome at: smoon@hsph.harvard.edu

Extra slides

Competition reduces prices: Evidence from HIV/AIDS

Public responsibility

“Access to drugs cannot depend on the decisions of private companies but is also a government responsibility.” –WHO Commission on IPRs, Innovation and Public Health (2006)

“The primary obligation for implementing the right to health falls upon the national authorities in the State in question,” and “access to medicines forms an indispensable part of the right to the highest attainable standard of health.”

– Paul Hunt, UN Special Rapporteur for Health & Human Rights (2002-08)