Drugmakers cut vaccine prices for poorer nations

By Kate Kelland

LONDON (Reuters) - Several leading drugmakers are cutting their prices on potentially life-saving vaccines for people in developing countries in an effort to sustain supplies via the GAVI international vaccine alliance.

The price cuts, offered by both generic and branded drugmakers including GlaxoSmithKline, Merck, Johnson & Johnson's Crucell and Sanofi-Aventis' Sanofi Pasteur, should help the alliance narrow a $3.7 billion funding gap for its commitments up until 2015.

GSK said on Monday it would provide its Rotarix rotavirus vaccine to GAVI at a 67 percent discount to the current public price -- bringing it to $2.50 per dose, or $5 to fully immunize a child. Merck said it will offer its Rotateq rotavirus shot at $5.00 a dose initially. "The RotaTeq price will decrease to $3.50 once the purchase volume increases to 30 million doses," it said.

Julie Gerberding, president of Merck Vaccines said long-term purchase commitments help to speed up availability of vaccines.

"Confirming volumes to be purchased will enable further price reductions as manufacturers expand production and lower costs in the future allowing for greater access," she added.

Diarrhea is one of the top two killers of children under five worldwide and rotavirus is the leading cause of severe diarrhoeal disease in children. Each year, rotavirus-related Diarrhea kills more than 500,000 children.

In 2009, the WHO recommended that all countries should include rotavirus vaccines in national vaccination programs, but many poorer countries struggle to afford them.

GAVI, which funds bulk-buy vaccination programs for nations that can't afford shots at Western prices, has committed to help fund rotavirus vaccine introduction in at least 40 of the world's poorest countries by 2015.

But the alliance is facing a shortfall of $3.7 billion to fund it projects through to 2015, and has been seeking extra donor money and price cuts from drug firms to close that gap. It has a pledging conference in London on June 13.

"These are promising offers that demonstrate industry commitment to work toward affordable and sustainable prices," Helen Evans, GAVI's interim chief executive, said in a statement.

GSK said it had offered to supply up to 125 million doses of Rotarix over five years at an approximately 95 percent price cut from the Western market price.

"Whilst most babies in the world will get rotavirus at some point, those in developing countries do not have access to the medical care they need which means millions of babies die unnecessarily," GSK's CEO Andrew Witty said in a statement.

He said the British drugmaker was committed to finding new ways to get urgently needed vaccines to children in poor countries.

Evans said that if rotavirus vaccine could be purchased this year at $2.50 a dose, the impact on public health could be significant and would allow GAVI to save approximately $500 million through to 2020, or about $140 million through to 2015.

The price GAVI pays for pentavalent vaccines, which protect against diphtheria, tetanus, pertussis, hepatitis B, and Haemophilus influenzae type b, will also be cut by the India-based firms Serum Institute and Panacea Biotec.

Serum, which had already cut its price to $1.75 a dose, said it would "continue to provide the most competitive pricing," while Panacea said it would cut its price by up to 15 percent.

Crucell and Sanofi Pasteur said they would extend GAVI prices on their pentavalent vaccines to 16 countries who are moving on from GAVI support to begin buying shots themselves.

Sanofi Pasteur said this would also apply to its yellow fever vaccine and a rotavirus vaccine being developed by its Indian subsidiary Shantha.

Merck also announced it will offer GAVI its Gardasil shot, which protects the human papillomavirus (HPV) that causes cervical cancer, at a discounted price of $5 per dose -- a 67 percent reduction on the current public price.

Although GAVI has not yet committed to funding HPV vaccines, it said they were part of its investment strategy and it hoped "to see further price reductions." More than 90 percent of deaths from cervical cancer now occur in developing countries, killing 200,000 women a year.

(Editing by Marguerita Choy and Erica Billingham)