Addressing Supply Side Barriers to Introduction of New Vaccines to the Developing World

Abstract

AbstractLow-income countries experience significant morbidity and mortality from avoidable infectious diseases, but all too often life-saving innovative vaccines are only available in high-income markets. The Generic Open (GO) license proposal posits that an increase in generic entry will lower prices through greater competition and increase vaccine availability in low-income markets. However, the GO proposal, as currently structured, is unlikely to function as envisioned in the vaccine market. Innovator vaccine firms will be unlikely to participate in the program because the payments in the GO license do not adequately compensate firms for all lost profits. Additionally, the price reductions from competitive entry are unlikely because the vaccine market is already characterized by low, and in some cases unsustainable, prices. I propose a potential adaptation where developing world vaccine manufacturers serve as contract suppliers to innovator firms for a given period of time. Donors could also share in the initial costs of capacity with the developing world manufacturers. Sales of developing world manufactured vaccines would be sold solely to UN procurement agencies under a confidential pricing or rebate system. This would increase overall product availability, maintain market separation, and decrease costs to UN agencies.