How to Introduce
Benefits of Price Transparency
Availability of information on the public sector prices—negotiated by countries currently using rotavirus vaccines in their national immunization programs—has two potential benefits:
(1) It would aid countries considering vaccine introduction in conducting more accurate economic evaluations.
(2) It may assist in price negotiations with manufacturers.
WHO’s Vaccine Product Price and Procurement Project (V3P) was launched at the request of countries to increase price transparency by sharing their vaccine price information. As of September 2015, 17 countries reported their prices for rotavirus vaccines.
|ROTAVAC ||Bharat Biotech International||Licensed in India; WHO Prequalification expected 2017||G9P|
|Rotavin M1 ||POLYVAC||Licensed in Vietnam||Vietnamese|
|Lamb rotavirus (lamb-human reassortant) LLR|
|Lanzhou Biologicals / Xinkexian|
Biological Technology (China)
|Licensed in China||G10, P + G1, G2, G3, G4|
ROTA Council Recommendations
- To enable countries of all income groups to include rotavirus vaccines into their national immunization programs, transparent and flexible pricing mechanisms are required.
- It is recommended that global health agencies (i.e. UNICEF, WHO, Gavi), and non-governmental organizations influential in vaccine programs (e.g., Médecins Sans Frontières and Save the Children) expedite initiatives to ensure prices paid for rotavirus vaccines reflect true manufacturing costs, provide reasonable returns on manufacturers’ investments and take into account an individual country’s ability to pay.
- All countries using rotavirus vaccines in the national immunization program should be encouraged to report the price of their vaccine to WHO’s V3P Project.
- Additional mechanisms may be required to provide innovative funding options for low-middle income, non-GAVI eligible countries
For low-income countries, Gavi provides co-financing support for vaccine introduction. After Gavi support ends, countries must commit to taking on financial responsibility for sustaining the vaccination program.
For Gavi-eligible countries, vaccine pricing is dependent on the country’s gross national income (GNI) per capita on average over the previous three years.
I. Initial self-financing
- Countries with ≤$1,045 GNI per capita
- US$0.20/dose with no annual increase
II. Preparatory transition
- Countries with US$1,045-1,580 GNI per capita (formerly called “graduating countries”)
- Starts at current Gavi co-financing price for one year
- Following this, co-financed share of price increases by 15% each year.
III. Accelerated transition
- >US$1,580 GNI per capita (formerly called “graduating countries”)
- One year of 15% increase, as in preparatory transition phase
- Following this, countries gradually ramp up over five years to reach the UNICEF procurement price paid by Gavi after co-financing ends
Middle-income countries that are not eligible for Gavi support also face challenges for funding new vaccines, including rotavirus vaccines. Several options for assistance are available for some of these countries. Some vaccine manufacturers have committed to offering tiered pricing agreements with individual countries or to providing their vaccine at an affordable price1-2.
ROTA Council RecommendationNoting the broad economic and social benefits of vaccination, it is recommended that national and local governments enact legislation that addresses issues of the rights of populations to receive recommended vaccines, and provisions to ensure a supply of quality, affordable vaccines.
PAHO Revolving Fund
In the Americas, the Pan American Health Organization (PAHO) created the Revolving Fund to facilitate bulk purchase of vaccines, cold chain equipment and related supplies for member states.
For countries that are not eligible for Gavi support for vaccine introduction and that are not part of the PAHO Revolving Fund, alternate funding strategies beyond direct negotiations with vaccine manufacturers may be needed. UNICEF recently proposed a strategy for vaccine procurement that would establish reference prices and also provide pooled procurement similar to the PAHO Revolving Fund2. Negotiations for tiered prices may also benefit countries that are able to conduct one-on-one negotiations with vaccine manufacturers.
Potential Mechanisms to Secure an Affordable Vaccine3
A bulk purchasing fund
Driven by the global health community and global health agencies
Taking advantage of economies of scale, the PAHO Revolving Fund secures vaccines and related supplies—prequalified under WHO standards of safety and effectiveness—for its member states in bulk at affordable prices. By purchasing through the Revolving Fund instead of directly from producers, Latin American countries can make significant savings on the purchase price. Founded on the principle of equity, PAHO’s Revolving Fund enables all
participating member states to have access to the same products, offered at the lowest price, which is the same regardless of the country’s size or economic situation. The Revolving Fund also handles key processes like planning, demand estimates, price negotiations, purchase orders, supply coordination, shipment monitoring and billing. As a result, Latin American countries have had continuous access to safe and effective vaccines at low, stable prices for over 30 years. This assists national governments with budget planning and fosters sustainable immunization programs. While this system requires significant work to establish, it is a model other regions—such as Asia—could consider.
UNICEF hybrid procurement strategy
Driven by global health agencies
Recently, UNICEF presented a strategy for vaccine procurement for middle-income countries that would provide industry with demand forecasts, provide countries with information on products and availability, pool procurement and establish reference pricing. Exploring this strategy further may benefit middle-income countries.
Manufacturer tiered pricing
Driven by manufacturers
Vaccine manufacturers have indicated that they are willing to enter into tiered pricing agreements with individual governments. Unfortunately, the prices agreed to by companies and individual countries are generally not in the public domain to guide decision makers in other countries. Further, one-on-one negotiations may violate legal requirements in some countries.
Separating technical decisions from economic evaluations
Driven by country governments
In this scenario, one technical advisory committee in a country would evaluate disease burden and vaccine efficacy and determine whether there is strong evidence in support of implementing the vaccine in this setting. Another advisory group would evaluate cost-effectiveness, determine whether the vaccine can be made available through the national immunization program or if a co-payment will be required and then provide the government with its recommendation regarding the implementation of the vaccine. Australia uses this mechanism, and it enables the country to work with industry to establish the vaccine price. However, in contrast with PAHO’s Revolving Fund, the vaccine price is not made public. This mechanism may also be too cumbersome for smaller countries to manage.
Country-level economic evaluations
Driven by country governments
To help determine a suitable vaccine price, country-level economic evaluations can be conducted prior to the decision to introduce a new vaccine. Typically, the main drivers of these assessments are the price of the vaccine and the number of deaths and hospitalizations averted. Ideally, the vaccine would cost less and be more effective than the present intervention(s). Importantly, this mechanism requires accurate input of vaccine price. Often, because this information is not publicly available, the more expensive private market price is utilized, and decision makers are led to erroneously conclude that a national vaccination program is not cost-effective.
1. Stephenne, J., Vaccines as a global imperative–a business perspective. Health Aff (Millwood), 2011. 30(6): p. 1042-8.
2.UNICEF. Middle Income Countries | Supplies and Logistics. Available from: http://www.unicef.org/supply/index_67101.html.
3.Nelson, E.A., et al., Overcoming perceptions of financial barriers to rotavirus vaccine introduction in Asia. Hum Vaccin Immunother, 2013. 9(11): p. 2418-26.