GSK is one of the world's largest suppliers of vaccines. Eighty percent of all the vaccine we produce goes to developing countries. Forty percent of all the vaccine we produce is supplied to GAVI. And over the past year, we became the first company to have WHO prequalified vaccines for pneumococcal disease, rotavirus and H1N1 pandemic flu.
Pneumococcal disease is a great example of partnership. GSK is likely to be the first company to supply the $1.5 billion Advanced Market Commitment. The AMC is the largest financing mechanism ever designed for a single vaccine and will dramatically increase sustainable access to pneumococcal vaccines with prices at a fraction of the cost paid by industrialized nations.
And the public health benefit will be incalculable: it's a little known fact, but pneumonia kills more children than AIDS, malaria and TB combined.
We are also--importantly--on the cusp of completing the world's first malaria vaccine, which is now in late-stage trials in seven African countries. Of course we don't actually have a registered vaccine yet, and we are in no way taking anything for granted. But that doesn't mean we shouldn't be thinking now about how we ensure this vaccine--should it make it--gets to all those that could benefit from it.
Each time we have a new vaccine we try to ensure the widest possible access by using tiered pricing--where the poorest countries pay the least. As a result, vaccines in the world's poorest countries are typically a fifth--or less--of the price in industrialized countries. So far GSK has invested $300 million in R&D for this vaccine. Our partner, PATH Malaria Vaccine Initiative, has invested a further $200 million.
The dilemma we face is this: unlike virtually every other vaccine there is no rich market for our potential malaria vaccine--tiered pricing simply doesn't apply. So we cannot apply our normal model. It's a unique problem and requires a unique solution. One that is sustainable and incorporates responsible pricing. Let me describe the principles of how we will price this vaccine.
First, it must be sustainable to allow for continued investment in high quality manufacture and follow on R&D.
Second, we must also ensure that we do not do anything which would discourage other companies from entering into this field. If we set a precedent of not-for-profit we could discourage others from doing research into malaria or other neglected tropical diseases.
We want to avoid that. But we want to be responsible too. That's why what we will do is set a price which covers our costs and generates a small return. A small return, all of which will be ploughed back into R&D for next-generation malaria vaccines and vaccines against other neglected diseases. In addition to this price commitment we are also committed to donating at least 12.5 million doses of vaccine to PATH.
Whatever the price, what we need is a partnership with donors and recipient countries to ensure access to all those that could benefit. We should be looking now to build on the fine example of the AMC for pneumococcal vaccination.
Thank you for your question. It is a sad fact that many people throughout the world lack access to basic vaccines and medicines. Industry can support the development and delivery of new vaccines, and I believe that GSK is doing its part with ground-breaking work in the area of malaria, pneumonia, rotavirus, cervical cancer and pandemic flu vaccines, but we are only one player.
In the developing world, for example, GSK works closely with international organizations--often funded by governments, the private sector, and foundations--to buy our vaccines at the lowest prices. These organizations, such as the GAVI Alliance and Unicef, in turn distribute the vaccines in GAVI-eligible countries. For very young children, this is done through the WHO’s Expanded Programme on Immunization (EPI).
The global health community also recognizes that cost is not the only barrier to providing vaccines to the children who need them most in low-income countries. Often, poor infrastructure and inadequate healthcare facilities hamper our ability to get vaccines off shelves and loading docks. Thus, last year, GSK announced that it would reinvest 20% of the profits we make selling medicines in the LDCs into infrastructure projects in these countries. While this is not a huge sum, it is start towards making some of these vaccines more accessible in poorer countries.
Whilst this is admirable and GSK integrity is not in question; the fact remains that even with a tiered cost built into supply, mant people in developing and the developed countries cannot afford vaccine. How do we meet these needs?