BMJ authors blast 'unacceptable' vaccine pricing practices

An editorial in The BMJ says vaccine companies should be more transparent about pricing.

Just this month, Pfizer pledged a “major” commitment to humanitarian programs after a charity rejected its donation offer for 1 million free Prevenar 13 doses. But now, experts argue in The BMJ that the global health community shouldn’t continue to rely on “random acts of charity” in vaccine pricing.

Authors Els Torreele and Mariana Mazzucato didn’t mince words in their editorial, writing that the health community has seen an “unacceptable commodification of human lives by drug companies using monopoly pricing power to determine who lives and who dies.” Torreele serves as director of access to medicines, innovation and accountability at Open Society Foundations, while Mazzucato is an economics professor at the University of Sussex.

Instead of the status quo, they argued, vaccine pricing should be transparent and take into account tax-funded research contributions while weighing manufacturing expenses and public health need.

The authors said the pneumonia vaccines from Pfizer and GlaxoSmithKline “are likely to cost less than a dollar to produce,” and can be sold at $120 to $160 per dose in wealthy countries. Immunization requires at least three doses.

Pfizer’s Prevenar family is the best-selling vaccine franchise in the world, pulling in more than $6 billion in sales last year. Synflorix contributed $476 million to GSK’s top line in 2015.

A Pfizer spokesperson told FiercePharma the pharma company works "with a range of local and global partners, including governments, healthcare experts, and civil society organizations to address the most pressing unmet medical needs and determine the most effective way for a donation to meet the needs of affected communities."

In rejecting Pfizer’s donation offer back in October, Médecins Sans Frontières (MSF) said “free is not always better” and that donations can delay vaccination campaigns and “undermine long-term efforts to increase access.”

At the time, Pfizer said it “strongly disagrees” with MSF’s position, adding that “donations play a crucial role in addressing humanitarian crises around the world.”

One month later, the company announced a longer-term arrangement, offering to price its vaccines at the “lowest prevailing global” cost for humanitarian emergencies. For the first year, it’ll donate all proceeds to “groups undertaking the difficult work of reaching vulnerable populations in emergency settings,” according to a statement. To get the program started, it'll donate some Prevenar doses.

Tiered pricing

MSF celebrated the move after years of lobbying for lower prices and making arguments similar to those voiced by Torreele and Mazzucato in The BMJ. For one, the editorial points out “price discrimination” in the industry that allows providers to charge customers “differently depending on their ability or willingness to pay.”

It’s “controversial for any type of good,” but in the realm of public health, it’s an “extremely serious” matter, the authors contend.

Pfizer's spokesperson said on Tuesday that "tiered pricing has the potential to significantly improve access to vaccines in emerging markets, while preserving the incentives for investment in innovation and new vaccine development." The approach is used in "many industries" and is supported by Gavi, The Bill and Melinda Gates Foundation, and the United Nations, the company contends.

The pharma's humanitarian pledge followed another by GlaxoSmithKline, which markets the pneumococcal vaccine Synflorix. GSK said in September that it’ll supply the vaccine to nongovernmental organizations at $3.05 per dose so that displaced children can be protected.

"Through this new pledge, we hope to provide consistency and stability for those delivering healthcare to some of our most vulnerable communities," GSK CEO Andrew Witty said in a statement at the time.

Pneumonia kills 1 million children each year, and only 37% of the world’s children are being immunized with the vaccines, the BMJ authors report.

Editor's note: This story was updated with a statement from a Pfizer spokesperson.