Vaccines save lives but is GAVI getting value for money? Guest post from Max Lawson

June 13, 2011 7 By admin

Today the replenishment conference for the Global Alliance for Vaccines and Immunisation (GAVI) kicks off in London.  The last few gavi_logoweeks have seen significant campaigning by a broad range of organisations to secure more money for GAVI, which is running out of cash, with the requisite NGO brinksmanship being cranked up – ‘four hours to save four million lives’ according to Save the Children this week.  

GAVI is an excellent initiative, which has successfully vaccinated millions of children in the poorest countries, and saved 5 million lives as a result. But there is a long way to go – one in five children still gets no vaccine at all. Oxfam fully supports GAVI getting the money it needs from rich nations to continue and expand this sterling work.  

But (there’s always a but). DFID is one of GAVI’s major sponsors, and in its recent multilateral aid review, GAVI scored well.  However, DFID also said that GAVI should be doing more to drive down the prices it pays for vaccines. We agree. One of the reasons GAVI is running out of money is because it has paid too much for them. Scaling up HIV/AIDS treatment is not just about raising money but also ensuring, through competition, the lowest possible price for anti-retroviral medicines.

vaccination 2Oxfam and Medecins Sans Frontieres have been pressing GAVI to take three steps to address this problem: first, full transparency about the prices GAVI pays; second, forceful action by GAVI to use competition to get a better deal; third, all pharmaceutical companies should step down from the GAVI Board because of their clear conflict of interest.

There has been some great progress in recent weeks.  UNICEF is the primary procurer of vaccines for GAVI, and has recently published all of the prices it has historically paid.  This transparency will now be a prerequisite for all future contracts. 

The move is already doing its job in adding weight to the other two issues of prices and governance.  According to the Wall St Journal the pricing data revealed significant differences. For one common paediatric vaccine used to prevent several diseases including hepatitis B, Serum Institute of India last year charged UNICEF 40% less per dose than Crucell, a Dutch company owned by Johnson and Johnson.  With three doses per child, and millions to immunise, such price differentials really matter.

Last week, partly in response to this more robust approach, and with big contracts with UNICEF in the offing, there were a series of welcome announcements by several vaccine manufacturers voluntarily lowering their vaccine prices.  Yet we can’t rely on these ad hoc moves by companies.  Systematic action by GAVI to drive down prices is also required. GAVI is publishing a new ‘market shaping’ strategy in late June, for consultation and then agreement by the Board in the Autumn, a real opportunity for it to shift up a gear. 

Perhaps the thorniest issue is that of governance. There are two seats for Pharmaceutical companies on the GAVI board.  Crucell, which earns up to 60% of its income from GAVI contracts (like the hep B vaccine mentioned earlier), is replacing GSK on the board this July.  Both GSK and Crucell have fiercely resisted the moves towards price transparency, according to the FT. Given the 40% differential such resistance is hardly surprising.

An element of conflict of interest is commonplace on many boards, and normal practice is for that board member to absent themselves Vaccinationfor that particular decision.  The problem here is that it is hard to think of any significant decision taken by the GAVI board that would not have a direct impact upon the bottom line of vaccine suppliers to the alliance.  Oxfam fully recognises the value of GAVI working closely with the pharmaceutical industry, but we do not believe that the best interests of the millions requiring vaccinations are best served with this continued clear conflict of interest.  The new Chair of the Board and the new Chief Executive have both said they want to tackle the governance issue, and we urge them to do so.

With donor budgets squeezed ever more it is vital we get maximum value for money – that means as many kids as possible vaccinated per aid dollar. GAVI is a great initiative, and must be fully supported by donors today, but in return for clear steps to ensure that it is paying the lowest possible prices for vaccines.

Max Lawson is Head of Development Finance and Public Services for Oxfam GB

Update: Very interesting response from Owen Barder, who thinks we are wrong on this