[Ip-health] Is the Gates Foundation’s plan for global vaccinations too friendly to the drug industry?

Krista Cox krista.cox at keionline.org
Mon Jun 13 09:43:12 PDT 2011


Is the Gates Foundation’s plan for global vaccinations too friendly to the
drug industry?
June 13, 2011 | 6:27 AM | By Tom Paulson
Vaccines are “miracles,” Bill Gates likes to say, because of their power to
prevent death and disease so simply and at such a low cost. Today, at a
meeting in London held to increase funding for one of global health’s
biggest success stories, the Global Alliance for Vaccines and Immunization,
governments and international donors agreed to boost funding for the vaccine
intiative by $4.3 billion — exceeding GAVI’s request of $3.7 billion

The new money — most of which came from the British government, the
Norwegian government and the Gates Foundation — will allow the vaccine
alliance to vaccinate 250 million more children worldwide and prevent at
least 4 million child deaths over the next five years. The funding allows
expanding the initiative’s portfolio to include two new vaccines against two
big killers pneumonia and diarrhea.  “For the first time in history,
children in developing countries will receive the same vaccines against
diarrhea and pneumonia as children in rich countries,” said Bill Gates,
co-chair of the Bill & Melinda Gates Foundation. “Together we must do more
to ensure that all children – no matter where they live – have equal access
to life-saving vaccines.”

In this time of economic recession, when governments and donors are
reluctant to even maintain, let alone increase, foreign aid, GAVI’s success
at fund-raising is extraordinary. There’s little question GAVI is making a
big difference in terms of global health, having so far prevented something
like 5 million deaths. I’ve written several posts recently emphasizing this
point, and to some extend perhaps sounding a bit like an advocate for GAVI.
It’s hard not to be when you look at what this project has accomplished in
terms of lives saved.

But there are some questioning whether GAVI is, in fact, saving the most
lives possible by getting the biggest bang for the buck. This question was
raised today, at the London meeting and at the press conference. So let’s
ask a few of the tough questions now that the fund-raising goal’s been met.
Vaccines are made by drug companies, which tend to want (well, are required)
to make money. Yet the goal of GAVI is not supposed to be about helping drug
companies make money. The goal is to vaccinate children in poor countries.
And poor countries don’t have a lot of money to spare.

The first question:
Does GAVI strike the hardest bargain with drug companies, getting the needed
vaccines at the lowest cost? Put another way, is the organization too
willing to accept what the drug companies want? The Wall Street Journal
today cites a number of organizations who think GAVI has not done enough to
reduce prices, is too “cozy” with drug companies and want to see
pharmaceutical industry representatives removed from the governing board.
Nina Schwalbe, a GAVI official, responded that the alliance has done the
best it could to get the industry to reduce vaccine prices and that they
need to collaborate with the drug industry.

The vaccine that has drawn the most ire from critics is for preventing
pneumococcal disease, which causes pneumonia and meningitis, for which GAVI
agreed to pay $7 per vaccine (children need three shots). The higher price
(which will go down to $3.50 later) was agreed upon to help drug firms
GlaxoSmithKline and Pfizer build manufacturing plants.
Schwalbe said changes in the vaccine market over time are expected to
continue to drive down prices but “GAVI in the meantime can’t afford to let
kids die.” One fomer staffer at GAVI who now works for UNICEF, Craig
Burgess, recently wrote an open letter in How Matters to new GAVI CEO Seth
Berkley in which he made five recommendations. One of them was to suggest
that GAVI needs to become less beholden to the drug industry, stop allowing
it to set prices and use the organization for marketing purposes. Burgess

Some would argue that the GAVI Alliance is one of the best marketing
machines ever devised by industry and partners, stimulating demand and
shaping pricing mechanisms…. Challenging the industry publicly or privately
seems off limits for discussion, adding to the ‘smoke and mirrors’ perceived
relationship that GAVI has with pharma. James Love, of Knowledge Ecology
International, specializes in examining the relationship between the drug
industry and global health organizations like GAVI and the World Health
Organization. Here’s a statement his organization, along with Oxfam,
Médecins Sans Frontières and others, made recently expressing concern
regarding growing conflict-of-interests due to industry participation in the
governance structures of many global health initiatives:

We are concerned that proposals in the current debate over WHO reform,
particularly in the report on ‘The future of financing for WHO, World Health
Organization: reforms for a healthy future’, do not adequately address the
management of conflicts of interest, and present an unrealistic and
empirically unsupported assumption that all stakeholders will collaborate to
advance the public interest.

The statement specifically calls for opposition to, among other things, the
governance of a new organization called the Decade of Vaccines
Collaboration. This organization was created to carry out the vision
described in the declaration — which includes a promise of $10 billion over
10 years — made by Bill and Melinda Gates last year at the World Economic
Forum meeting in Davos.

Love and members of other health advocacy organizations are concerned these
initiatives are heavily weighted toward the interests of those on the supply
side of the vaccine equation — industry, researchers, NGOs — with inadequate
representation by the intended beneficiaries — poor people in poor or
middle-income countries. The Commission on Smart Global Health Policy
recently issued a report on GAVI’s Future. In the opening statement, the
commissioners write: Now and into the future, GAVI will need to convince
donors and recipient governments alike that in the midst of a global
recession and constrained national budgets and donor resources,
immunizations and GAVI’s leadership in delivering vaccines to the poor are a
“best buy” in global health.

Sanofi Pasteur
Finding the “best buy” leads to the second question:

Why isn’t more being done to get the vaccines made in poor and middle-income
countries rather than relying largely on Big Pharma?  That’s the question
Yojana Sharma of SciDev.Net raises in Make Vaccines for Africa in Africa.
The vaccines used by GAVI are almost entirely made in Europe, the U.S. and
to some extent in Latin America and Asia, Sharma notes, and a number of
organizations are calling on GAVI to support vaccine manufacturing in poor
countries: Julia Hill, vaccines policy advisor at MSF, said: ”We believe
GAVI could be stronger in including low cost producers rather than paying
companies who have developed vaccines originally for use in richer
countries. [The vaccines] need to be better suited to the countries they are
used in.”

Daniel Berman, also with Médecins Sans Frontières (MSF, aka Doctors Without
Borders), makes the same argument but with more force in “GAVI money welcome
but could it be more wisely spent?” Berman contends that GAVI’s approach to
vaccine purchases with Big Pharma amounts to “corporate welfare” and that
much more could be accomplished if more vaccines were purchased from
“emerging country suppliers” such as in India. Last week, a number of drug
companies jointly announced plans to reduce the price of select vaccines for
GAVI. This was widely hailed as evidence the global vaccines initiative is
making progress toward its goal of “market shaping” — driving down costs by
guaranteeing drug firms large purchases for their vaccines and creating
market demand for vaccines that otherwise would be of little interest to

Obviously, the announcement by industry was timed to precede the London
meeting. Some saw this as less due to “market shaping” than pre-emptive
marketing. One vaccine expert suggested to me the drug firms likely were
faced with either showing good faith on price reductions or getting
lambasted at the summit. But even with the price drops, many of the newer
vaccines remain fairly expensive for poor countries. What happens if/when
donors stop funding the vaccines? Will poor countries be able to continue
The Smart Global Health Policy gang says in its report:

There is a pressing need to achieve continued and steeper vaccine price
reductions, create incentives for late-stage research and development (R&D),
and promote manufacturing of new vaccines, while respecting the need to
maintain a healthy competitive market among manufacturers.

So, last question:

Is there a healthy competitive market to maintain among manufacturers of

I’m no economist, and so I won’t try to answer that. My concern is if this
question is even phrased accurately. Vaccines are basically a public good.
They need to be cheap to be useful. Drug companies can’t be expected to take
a loss in producing them. But what constitutes a healthy competitive market
for vaccines?  Right now, vaccines are made by a relatively few drug
companies. And the nature of any large corporation is to compete, sometimes
to the point of creating an unhealthy market — in which one or two
industries exert too much control over both sides of the supply and the
demand equation. What is happening right now with regard to Big Pharma’s
assault on the generic drug industry in the developing world is worrisome,
indicating that “healthy competition” is not necessarily a top priority for
drug companies. Most AIDS drugs, for example, are only affordable in many
countries because they are generic drugs. Yet Big Pharma appears to be
pushing for regulations that would greatly restrict global marketing of
these drugs.

As the Guardian reports:
According to Michelle Childs, director of policy and advocacy with Médecins
Sans Frontières’ campaign for access to essential medicines, the US, the
European Union and Japan are trying to make laws “even stricter and narrow
the opportunities for generic producers to make [and] to export those
drugs.” Clearly, the drug industry does a good job protecting its own
interests. The question for GAVI is how best to strike the right balance
between collaborating with the drug industry while also pressing it to serve
the interests of the poor.

Krista Cox
Staff Attorney
Knowledge Ecology International
(202) 332-2670

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