Two vaccine arguments: So simple, so complicated

We have at least two vaccine arguments raging - one with the epicenter in Disneyland and the other in developing nations.

Good vaccines are, like other good medicine, difficult to make. But in an area with many disputes, there is little dispute that good vaccines work very well over most populations who get them. The tricky part is getting people vaccinated and paying for it.

Measles can be a very bad disease, which is why healthcare officials spent decades working to eradicate it in the United States. But a few parents, including some with enough money and education to know better, have decided to skip vaccinating their children against measles out of misguided fear that it causes autism or bad breath or something else unrelated. So, with many visitors from foreign countries where measles has not been eradicated, Disneyland is at the center of the measles outbreak. According to Monday's story in the Los Angles Times, there have been 73 measles cases reported in California and 14 outside the state: three in Utah, two in Washington state, five in Arizona, one in Colorado, one in Oregon, one in Nebraska and one in Mexico.

The other current vaccine tempest involves pneumococcal vaccine, which protects against strains of pneumonia.

The main actors in this drama are Pfizer, GlaxoSmithKline, GAVI, the Vaccine Alliance, and Doctors Without Borders, which is also known by its French name Médecins Sans Frontières (MSF).

Pfizer and GSK are the only manufacturers of pneumococcal vaccine. Gavi has tried to get governments, drugmakers and non-governmental groups (Bill and Melinda Gate Foundation) to work together to fund, develop, deploy and pay for vaccines. Doctors Without Borders goes into really awful situations and tries to save lives.

U.S. and European drugmakers openly say they charge higher prices for vaccines and other medicine in developed countries and lower prices in poorer countries because the citizens and governments in each kind of place can afford those prices. Obviously, that alone causes arguments of several sorts.

But just how low the vaccine price goes in developing nations is another argument, and the latest episode of that debate arose in the last week or so.

On Jan. 20, Doctors Without Borders called on Pfizer and GSK to cut the cost for pneumococcal vaccine to $5 per child, while publishing a report on the rising overall costs of vaccinating children in the developing world. The report is entitled, "The Right Shot: Bringing Down Barriers to Affordable and Adapted Vaccines (2nd Edition)" and a link is here.

The call to cut prices came in advance of Gavi's two-day donor conference in Berlin. After the conference ended Tuesday, Gavi said that "new pledges, totaling $7.5 billion, will enable countries to immunize an additional 300 million children, leading to 5 to 6 million premature deaths being averted." The pledge included $1 billion over four years (2015-2018) from the United States. A link to the announcement is here.

On Monday, Pfizer said it would cut the price of Prevnar 13 by 20 cents per dose, from $3.30 to $3.10, for the new four-dose vial regime, which is expected to be introduced under a new Gavi program due to start in in 2016. On Tuesday, Pfizer released its full-year 2014 financial results, which included $4.46 billion in revenue from its family of Prevnar products. More than half of that revenue came from outside the United States. Only Lyrica brings in more cash for Pfizer.

Some might suggest that Pfizer CEO Ian Read has sacrificed for the cause. Read took a pay cut in his total compensation in 2013. According to Pfizer's SEC filing, Read's total yearly compensation dropped from more than $25 million in 2011 and 2012 to $18.95 million in 2013. Then again, others might disagree on that sacrifice idea. (The link to Pfizer's SEC proxy statement from last spring is here. The overall compensation chart is on page 89.)

Meanwhile, GSK said Tuesday that "developing countries that graduate from Gavi support due to increased economic wealth will be able to continue to purchase vaccines against pneumonia, diarrhea and cervical cancer at significantly discounted Gavi prices for a decade after graduation. This will help ensure sustainable vaccination programs in developing countries in the long term."

Doctors Without Borders was unimpressed by all of this apparent corporate goodness, in part because a good chunk of the funds generated by Gavi were going to the drug companies on top of the prices they were charging.

“Pfizer’s 6% ($0.20) price cut for the pneumococcal vaccine is inadequate - we need to see both Pfizer and GSK take bolder steps to reduce the price of this vaccine in half for developing countries, so more kids can be protected against deadly strains of pneumonia," Philadelphia native Kate Elder, vaccines policy advisor for Doctors Without Borders, said in a statement. "Considering Pfizer has raked in nearly $16 billion for this vaccine in just four years, we think the company can do much more than a meager 6% (20-cent) discount. Additionally, Pfizer and GSK are still being paid up to $21 per child (for all three doses) for some quantities through a special subsidy funded by Gavi donors.

"Pfizer claims that it is making the pneumococcal vaccine available to the poorest countries at below cost price, but we really don’t know if that’s true. We need to see both Pfizer and GSK opening up their books – being transparent for a change – on what the real costs of the research, development and production of this vaccine are. The secrecy that shrouds the vaccine industry makes it almost impossible to have an educated discussion on reasonable vaccine prices.

"The Indian manufacturer Serum Institute says it plans to bring its version of this vaccine to market for just $6 per child (for all three doses) in a few years, and we’re assuming they will still be making a profit at that price, so we think Pfizer and GSK can afford to slash their prices a whole lot more. As donors prepare to pledge $7.5 billion to Gavi over the next five years, we repeat our call to Pfizer and GSK: make the pneumococcal vaccine available for $5 per child for kids in developing countries.”