When setting prices, all companies consider countries’ Gavi status – most also consider GNI per capita
The 2017 Access to Vaccines Index asked six companies which factors they consider when setting vaccine prices. Collectively, they consider 18 diverse factors when setting vaccine prices, with the most attention being paid to the conditions (not least economic conditions) in a given country. Indeed, the only factor considered by all six companies is a country’s eligibility for Gavi support. The six companies asked were: GSK, Johnson & Johnson, Merck & Co., Inc., Pfizer, Sanofi and Serum Institute of India.
Vaccines are among the most cost-effective ways of protecting people against disease, not least children, who can be safeguarded from the often debilitating impact of many childhood illnesses. Nevertheless, immunisation programmes involve considerable costs, with vaccine prices accounting for a significant proportion.
Figure 10: Companies report considering 18 factors when setting vaccine prices
The 18 factors can be divided into five different groups. The largest focuses on conditions in a given country, such as its Gavi status. Others look at aspects of government commitment, or the value of or need for the vaccine in question, including related costs.
Understanding how vaccine prices are determined can help shape expectations for procurers, donors, market-shapers and other companies when entering negotiations. A better understanding here can lead to more affordable vaccines, in turn enabling greater immunisation coverage and greater market sustainability. Cost plays a role in vaccine pricing, including investments companies make in clinical development or in manufacturing facilities. The public health value of a vaccine to healthcare systems is also used to inform vaccine prices.
All six companies offer discounts to Gavi-eligible countries. Four companies also consider Gross National Income (GNI) per capita. Most also publicly commit to offer discounts for some vaccines for a set time period to the 16 countries classified in 2016 as Gavi-transitioning. Companies generally offer their lowest prices to Gavi-eligible countries. However, many middle-income countries (MICs) are not eligible for Gavi support (or PAHO’s Revolving Fund). Many also face healthcare budget constraints. The Index does not find clear evidence that companies systematically consider countries’ ability to pay when setting vaccine prices in MICs. This raises concerns that many MICs may not be able to afford vaccines, thus limiting immunisation coverage, particularly of newer, more expensive vaccines.