Technology

Vaccinating the World


G-7 finance ministers agree to provide funds for an innovative plan that will guarantee vaccine sales to poor countries

Finance ministers from five industrialized nations announced in Rome on Feb. 9 an initiative that will guarantee $1.5 billion to purchase vaccines for developing nations. The plan is designed to create a financial incentive for pharmaceutical companies to develop weapons against infectious disease.

Italy, Britain, Canada, and Norway, Russia, plus the Bill and Melina Gates Foundation, are providing the initial funds for a unique financing mechanism, called an advance market commitment (AMC), that will initially be used to subsidize the purchase of vaccines against pneumococcal diseases such as pneumonia and meningitis. These diseases kill 1.6 million people a year worldwide, half of them children. The announcement was made ahead of a meeting Jan. 9 and Jan. 10 of the G-7 finance ministers from Germany, the U.S., Japan, Britain, France, Italy, and Canada.

Of the $1.5 billion. Italy will provide $635 million, Britain $485 million, Canada $200 million, Russia $80 million, Norway $50 million and the Gates Foundation $50 million.

As a result of the initiative, the finance ministers said they expect pneumococcal vaccines to reach developing countries by 2010, 10 years earlier than if the AMC were not available. The U.S. did not contribute, saying budgetary restraints restircted it from making long term commitments.

Companies doing vaccine research heralded the agreement. "This innovative financing mechanism is a huge step forward and has the potential to save millions of lives," said Jean Stephenne, president of GlaxoSmithKline's (GSK) vaccine division. Glaxo has a pneumococcal vaccine candidate in late stage development.

Incentives for Development

Vaccines, while desperately needed, have long been a low priority in the pharmaceutical industry because the poor nations where they are most needed typically do not have the money to buy them. With little success until now, nonprofit groups have been pushing the industrialized nations to step in with financing. At their summit meeting last July the Group of Eight (the G-7 plus Russia) industrialized nations came close to approving such a commitment for vaccines against malaria, HIV/AIDS, and tuberculosis, but could not agree on final terms.

The finance ministers' program was developed with considerable input from pharmaceutical and biotech industry executives. One of the major behind-the-scenes lobbyists was Bio Ventures for Global Health, a nonprofit formed by the biotech industry with backing from the Bill & Melinda Gates Foundation to create incentives for the development of treatments for diseases that plague poor nations.

Wendy Taylor, founder of Bio Ventures, says that a lack of market opportunities was the key barrier to vaccine development. "AMCs are directed at the heart of the problem. They are a new and innovative approach where we can create real markets," Taylor says. Her group met with more than 150 industry executives on the criteria most needed to encourage development, to insure that any initiative would actually work. Bio Ventures was spun out of the Biotech Industry Organization, whose members include more than 1,100 universities, industry groups, and companies such as Genentech (DNA) and Amgen (AMGN).

Doubts About Local Distribution

The agreement did not meet with unbridled enthusiasm, however. "Will it work a little? Probably," says Roche Chief Executive Franz Humer. "It won't solve the problem though. What we really need are responsible governments capable of delivering these drugs."

The AMC does not pledge to buy any particular vaccine; rather it is meant to encourage competition by agreeing to buy from any company that develops an effective vaccine that meets its criteria. Also, manufacturers must agree to lower their prices substantially after an agreed-on period.

Taylor says the initial proposal, covering only pneumococcal vaccines, is a pilot project to determine whether such a funding mechanism will work. There is currently only one pneumococcal vaccine for children available, from Wyeth (WYE), although several other companies, including GlaxoSmithKline (GSK), are developing others. The Wyeth vaccine is widely administered in wealthy nations but is available through national programs in only five developing countries. "This agreement brings a lot of global attention to the problem of vaccines," says a Wyeth spokeswoman. "We think the AMC is a great concept that makes a lot of sense. Without this funding it would take many, many more years to accelerate penetration into developing countries."

Arnst is a senior writer for BusinessWeek in New York.

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