Bloomberg News

Merck, Glaxo Reduce Prices of HPV Vaccines in Poorest Countries

May 09, 2013

Merck, Glaxo Reduce Prices of HPV Vaccines in Poorest Countries

Merck said one factor in determining the price is the cost involved in vaccine production and maintaining the manufacturing facilities, and that higher volumes could lower the price. The drugmaker has committed to sell 2.4 million doses of its Gardasil vaccine to GAVI from 2013 to 2017. That would generate about $11 million in revenue. Photographer: JB Reed/Bloomberg

Merck & Co. (MRK:US) and GlaxoSmithKline Plc (GSK) will cut the prices of their cervical cancer vaccines for some countries in the first large-scale effort to get the shots to millions of girls in the world’s poorest regions.

The companies will sell their vaccines to eligible low-income countries for about $4.50 a dose, a more than 95 percent discount from the prices charged in the U.S., said Nina Schwalbe, managing director for policy and performance at the GAVI Alliance, which will purchase the vaccines and distribute them to the countries at a further reduced price.

Until now, there have been very few efforts to get the inoculations that protect against the sexually transmitted human papillomavirus, or HPV, to women in low-income countries where there is little testing or treatment for cervical cancer. More than 80 percent of deaths from cervical cancer are in developing countries, where it is the leading cause of cancer deaths in women.

“In developing countries, there is no access to screening and no access to treatment so cervical cancer is a death sentence,” Schwalbe said in a telephone interview. “This is a major global health issue.”

The first vaccination program will start in Kenya this month and will be followed by seven other countries, including Niger, Ghana and Tanzania. GAVI plans to have HPV vaccination programs in 40 countries within seven years, Schwalbe said. GAVI will subsidize the cost to the countries, charging the poorest just 20 cents a dose, and covering the difference with donations from developed countries and nonprofit groups such as the Bill & Melinda Gates Foundation, she said.

Test Program

Merck, the second-biggest U.S. drugmaker, has spent several years testing programs in Rwanda and Bhutan to assess whether low-income countries could effectively administer the vaccine. In Rwanda, 95 percent of adolescent girls have received the standard three doses of the vaccine. That compares to about a third in the U.S. where the vaccination has met resistance over its more than $300 price, safety concerns, and questions about vaccinating young women for a sexually transmitted virus.

While the price discount is more than 95 percent, the $4.50 cost per dose is still too high for developing countries, said Kate Elder, vaccine policy adviser for Doctors Without Borders, the nonprofit group that provides medical aid in more than 60 nations.

“The price is unjustifiably high and will add to the already spiraling vaccination costs faced by low-income countries,” Elder said in a statement. “While the deal is a reduction from the price paid by developed countries, it will still cost nearly $14 to fully protect a girl against HPV -- a price that is too high for the world’s poorest countries.”

Determining Price

Merck said one factor in determining the price is the cost involved in vaccine production and maintaining the manufacturing facilities, and that higher volumes could lower the price. The Whitehouse Station, New Jersey-based drugmaker has committed to sell 2.4 million doses of its Gardasil vaccine to GAVI from 2013 to 2017. That would generate about $11 million in revenue. The vaccine had global sales (MRK:US) of $1.63 billion in sales last year.

Cervarix, the HPV vaccine from London-based Glaxo, generated about $428 million in 2012 sales, according to data compiled by Bloomberg.

“You can’t really talk about the price of a vaccine in a vacuum,” said Mark Feinberg, Merck’s vice president and chief public health science officer. He said Doctors Without Borders isn’t accounting for “how expensive an enterprise it is to develop and manufacture vaccines and make them available in a substantial way in high quantities in a heavily regulated environment.”

To contact the reporter on this story: Shannon Pettypiece in New York at spettypiece@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net


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