The Drug Price War Hits Vaccines: Will Pfizer, GSK Give In To MSF Plea?

By Anna Rose Welch, Editorial & Community Director, Advancing RNA

A new pricing war is afoot — but this time, it doesn’t involve AbbVie or Gilead Science’s HCV treatments. This week, Pfizer and GSK were both met with push-back from Doctors Without Borders (MSF) to reduce the prices of their pneumococcal vaccines to $5 per child (includes all three doses). Higher prices are making it harder to protect children’s lives in developing nations where pneumococcal disease strikes particularly hard.

According to the MSF press release, the price to vaccinate children in emerging nations has skyrocketed since 2001: it’s currently a “colossal” 68 times more expensive. In a new report, MSF attributes the rise in vaccination costs to the high price tag of pneumococcal vaccines. These vaccines have certainly been good to the drug companies, with Pfizer and GSK raking in roughly $19 billion from pneumococcal vaccines, MSF says.

Vaccinating children in these nations will partially depend on the generosity of donors, which the MSF hopes will contribute upwards of $7.5 billion to cover vaccine supply for the next five years, Rohit Malpani, director of policy and analysis for MSF’s Access Campaign, said. But he also believes it’s Pfizer’s and GSK’s responsibility to lower prices and ensure wider access to their pneumococcal vaccines.   

Much like we saw in the war on Gilead’s sofosbuvir high price tag, both GSK and Pfizer are defending the vaccines’ already discounted prices because of their quality, efficacy, and the complexity of their manufacturing process.

In a statement given to the Wall Street Journal blog, a spokeswoman for Pfizer says its Prevnar 13 is “one of the most complex biologic products ever developed and manufactured,” citing its 13 individual components, the two years it takes to make one batch, and the 500 separate quality control tests required before the drug’s release. The cost of this vaccine for Gavi, the Vaccine Alliance, is $10 dollars, or $3.30/dose through 2025 (below the manufacturing costs, says Pfizer).

GSK also released a statement to the WSJ in defense of its pricing of Synflorix, saying that it is already providing 80 percent of its vaccines, including its pneumococcal vaccine, to Gavi and UNICEF for a price that is “as little as a tenth of developed world prices.”

Pfizer is no stranger to receiving flak for the pricing of Prevnar 13. In 2014, the New York Times published a new analysis showing that U.S. vaccine prices, especially that of Prevnar 13, were on the rise. Besides high facility investments and the time it takes to develop a vaccine, a lack of competition and the fact that insurers are required to cover it can also raise a vaccine’s price, says Fierce Pharma.

The complexity and efficacy of a drug aside, arguments that companies need to be wary of the vaccine pricing system have been surfacing for the past few years. According to Fierce Vaccines, in 2013, both the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) and BIO were warning companies that the favored differential pricing strategy was coming “under threat”— especially since richer countries could view the lower price offered to developing nations as their own standard.

Not only are prices high, the industry is, according to some, suffering from a lack of price transparency. According to Bloomberg, while several big U.S. companies provided information about vaccine pricing strategies, only four of nine companies MSF contacted volunteered the prices of their vaccines: Bio Farma, Biological E, Panacea, and Serum Institute of India (none of them U.S. companies, in case you were wondering).

Indeed, the Serum Institute of India has already announced its intention to make a pneumococcal vaccine available in upcoming years for $6 ($2/dose), according to MSF.

In the future, developing nations might find they don’t need to be as reliant of Big Pharma vaccines. Indeed, Bill Gates called attention to the BRICS nations’ growing contributions to the vaccination space in an article last year. According to Gates, “The increased competition and new manufacturing approaches created by companies [such as Serum Institute of India and Biological E] have made it possible to protect a child against eight major diseases — including tetanus, whooping cough, polio, and tuberculosis — for less than $30.”

Drug companies maintain that disclosing vaccine pricing could take away their negotiating power and raise prices in poorer nations, while MSF asserts the lack of comparative pricing information hinders developing nation’s abilities to negotiate and attain vaccines for affordable rates. If some of the BRICS nations keep it up with pricing transparency, like the Serum Institute of India, I’m certainly curious to see what Big Pharma will do as the vaccine playing field continues to even. Will there even need to be negotiations that involve Pfizer and GSK in the future?