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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) Population

Global GDP (2010) LIC 1%

HIC 19%

LMIC 7%

LIC 12%

UMIC 22%

LMC 35% UMC 34%

Global Population <$2/day

UMIC 19%

LMIC 56%

LIC 25%

HIC 70%


MICs challenges Rely less on aid (DAH) 

DAH per capita $10 $8 $6 $4 $2 $-

LIC

 Price negotiations

New vaccines 

LMIC

UMIC


$50,000

$100

$45,000

$90

$40,000

$80

$35,000

$70

$30,000

$60

$25,000

$50

$20,000

$40

$15,000

$30

$10,000

$20

$5,000

$10

$-

GAVI avg

Macedonia

South Africa GDPpc (2010)

PAHO avg Pneumo prices

Brazil

US

$-

Pneumo vax price/dose

GDPpc (2010)

Prices & GDP


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., PĂŠrez 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


$2700 $800

$10,400

7

$700

6

$600

5

$500 4 $400 3 $300 2

$200

1

$100 $0

2001

2002

2003

2004

People in LMICs on treatment Originator price of first-line ARVs

2005

2006

2007

2008

2009

2010

Lowest generic price first line ARV regimen

0

Millions

Generic Competition and HIV Treatment Scale-Up


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


A Fairer Global Vaccine Pricing System 70

Global GDP (2010) LIC 1%

60

LMIC 7% UMIC 22%

50

Price USD

40

HIC 70%

30

20

10

0

Population (hundred millions) Cost of goods

Reward for innovation


Conclusions 1.

2.

Fair, politically-sustainable global system for vaccine pricing is in everyone’s interest Pro-active interventions needed to fix a dysfunctional pricing ‘system’ to ensure access to vaccines for all Global Population <$2/day

UMIC 19%

LMIC 56%

LIC 25%


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)


10_Dr Moon_Roundtable_Towards a fair global system for vaccine pricing_How to address the MICs chall