GSK, Merck agree on HPV vax discount with GAVI

Social issues have held back uptake of GlaxoSmithKline's ($GSK) and Merck's ($MRK) human papillomavirus (HPV) vaccines in the U.S., but globally the problem is more fundamental--the shots cost too much. But it is these low-income countries--where 85% of cervical cancer cases occur--that need the vaccines most.

This disconnect between who can afford the vaccines and where they are needed has held back Merck's Gardasil and GSK's Cervarix. Now both manufacturers have agreed to deep discounts to get the vaccines into countries where they can do the most good. The GAVI Alliance is paying $4.50 a shot for Gardasil and $4.60 for for Cervarix. In comparison, the lowest price paid by the public sector previously was $13, and privately a jab costs upwards of $100. GAVI identified this as a problem as far back as 2011, when Merck agreed to offer Gardasil at $5 a shot.

GAVI only began accepting applications for HPV vaccine support last year, though. CEO Seth Berkley told the press this week that GAVI was taken aback by the response. It soon had applications from 15 countries and expects at least as many again this year. A rollout in Kenya will begin later this month, with a further 7 countries to follow. The speed at which GAVI can grow the HPV program is limited by most countries' limited experience vaccinating adolescents. To overcome this, small training projects will be run before scaling up. As the project gets up to speed--and more nations are added--vaccine volumes will increase. That could mean lower prices for vaccines, as Merck has an agreement with GAVI to further discount Gardasil if volumes increase.

Experience with other vaccines suggests the next big price drop will come when manufacturers from India or China enter the HPV market. Berkley said both countries are developing HPV shots and this will create "healthy competition" in years to come. Competition from low-cost countries has pushed the price GAVI pays for some pentavalent vaccines down to $1.19 a dose.

- here's the GAVI press release