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)