The GAVI Alliance’s vaccine - National Academies of ...iom.nationalacademies.org/~/media/Files/Activity Files/Research... · The GAVI Alliance’s vaccine ... IOM – Session V

Nina Schwalbe

The GAVI Alliance’s vaccine

market shaping approach

IOM – Session V: Learning from Other Models

Washington DC, 31July 2012

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

GAVI’s mission

To save children’s lives and protect

people’s health by increasing access

to immunisation in poor countries

WHO/Jim Holmes

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

The GAVI Alliance: an innovative partnership

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

Four strategic goals 2011-2015

The vaccine goal

Accelerate the uptake and use

of underused and new vaccines

The health systems goal

Contribute to strengthening the

capacity of integrated health

systems to deliver immunisation

The financing goal

Increase the predictability of

global financing and improve

the sustainability of national

financing for immunisation

The market-shaping goal

Shape vaccine markets to

provide appropriate and

affordable vaccines

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IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

Increased competition reduces vaccine price over

time

Price decline of pentavalent vaccine and number of manufacturers

from which vaccines were procured in each year

Source: UNICEF Supply Division, 2012

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

Context: Global vaccine market

• Global sales in 2010 ~ $ 28 billion

• “UN market” represents less than 5% of market

• 5 large Multi-National Corporations (MNC) make

up ~85% of the global market. Remaining from

both developed and developing counties

• Clear focus by MNCs new vaccine development

for industrialised countries

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

Context: Safety & Quality

Quality is the over-riding criterion

Very low acceptability of side effects –administered to healthy population

WHO pre-qualification

Highly regulated production environment

Dependency on well functioning National Regulatory Authority

GAVI/07/Atul Loke

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

Context: Production Complexity

Highly sensitive products

Biological products requiring constant temperature control - cold chain from manufacturer to child

Limited shelf life

Complex manufacturing

Specific know how, large scale investment: high barriers for entry

Significant risks of production failures

Long production cycle – long lead times required

Long term and reliable demand predictions are important

GAVI/07/Atul Loke

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

Market dynamics

Oligopsony / Oligopoly

Limited competition both on demand and supply sides

Few buyers: Oligopsony (196 countries but.....)

Key role of governments or health insurances – vaccines

typically delivered free of charge by public health

providers

Pooled procurement: UNICEF (80-100 countries); PAHO

Revolving Fund (40 countries)

Few Sellers: Oligopoly

For GAVI-supported vaccines, between 1-4 suppliers with

pre-qualified product

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

GAVI’s approach to market shaping – key

objectives

Information Communicate timely, transparent and accurate market information

Appropriate

products

Ensure

appropriate,

quality vaccines

& foster

innovation

Balance

Supply &

Demand

Ensure

sufficient

uninterrupted

supply

Vaccine

prices

Minimise cost to

GAVI &

countries

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

Tools: Increase predictability

Predictable donor funding to complement country co-financing

Example: pentavalent vaccine $2.49/dose – lowest income countries pay $0.20

Strategic demand forecasts

Long term - up to 2030

Across 73 GAVI countries + other LMICs

Across 10+ vaccines

Regularly shared and discussed with manufacturers

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

Tools: Pooling demand and contracting

flexiblities

Procurement through UNICEF Supply Division and PAHO Revolving Fund

Leverage high demand volumes from 73 countries

Example: pentavalent ~155 million doses / year

Adapting buying model / procurement tactics to market environment, examples:

Advance market commitment (AMC) for pneumococcal

vaccines

Multi-year firm contracting

Demand guaranties

Stockpiling

Concentrate volumes versus splitting of demand

Encourage competition - incentivise new suppliers

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

Tools: Vaccine quality and oversight

Through collaboration with WHO:

Strengthen national regulatory capacity in GAVI countries – particularly in producing countries to mitigate against risks to supply interruption

Support the process to develop global norms and standards for vaccines, including product suitability and technical guidance to facilitate the development of second generation vaccines

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

Tools: Tiered pricing

2011 prices per dose

Source: UNICEF Supply Division; CDC

HPV:

Price commitment to

GAVI of $5/dose

Current US public

price: $96-$112/dose

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

Factors influencing GAVI’s market shaping potential

GAVI’s relative market power

• Purchase volume

• Terms and conditions

• Revenues and profits relative to other purchasers/markets or products …

Market environment

• Number of suppliers - competition

• Production capacity

• Company’s strategy

• Ability & willingness to supply GAVI countries

Vaccine production complexity

• More complex expensive technology

• Multiple antigens or serotypes

• Products, regulatory requirements

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IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

Learnings

Clearly articulated short term vs. long term objectives (price versus supply security versus innovation) for each market

Predictable funding

Visibility and credibility of demand

Ongoing and forward looking market intelligence

Partnership and regular interaction with manufacturers

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

Vaccine supply 2001 – Vaccine supply:

5 suppliers from 5 countries

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

Vaccine supply 2011 – Vaccine supply:

11 suppliers from 9 countries

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

Vaccine supply 2011 – Vaccine supply:

10 suppliers from 9 countries

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

Accelerates the manufacture and delivery of vaccines:

Donors commit funds for new vaccines at pre-

agreed price

Manufacturers get incentive to invest in R&D for

new vaccines

Vaccines must meet stringent criteria and be

requested by developing countries

Manufacturers legally commit to supplying

vaccines at lower price long term

Long-term price is paid by beneficiary countries

and GAVI

Advance Market Commitment (AMC)

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

AMC commitments: US$ 1.5 billion

Source: GAVI Alliance, 2010

AMC commitments US$ millions

Italy 635

United Kingdom 485

Canada 200

Russian Federation 80

Norway 50

Bill & Melinda Gates Foundation 50

Total 1,500

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

GAVI supports the world’s poorest countries

Type and value of support, 2000–2011

Source: GAVI Alliance , 2012

IOM – Session V – GAVI Alliance

Washington DC, 31 July 2012

Factors influencing GAVI’s market shaping potential

GAVI’s relative market power

• Purchase volume

• Terms and conditions

• Revenues and profits relative to other purchasers/markets or products …

Market environment

• Number of suppliers - competition

• Production capacity

• Company’s strategy

• Ability & willingness to supply GAVI countries

Vaccine production complexity

• More complex expensive technology

• Multiple antigens or serotypes

• Products, regulatory requirements

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