GlaxoSmithKline (GSK) and Pfizer Inc. undertook on 23 March 2010 to provide life-saving vaccines that help protect against pneumococcal disease, including pneumonia the world’s biggest childhood killer, at an “affordable” price where they are urgently needed. Supply will start as soon as possible and at a fraction of the price charged in industrialised countries.

The supply agreements were made possible thanks to the Advance Market Commitment (AMC) for pneumococcal disease, an innovative financing mechanism piloted by the GAVI Alliance (www.gavialliance.org). The governments of Italy, the United Kingdom, Canada, Russia, Norway and the Bill & Melinda Gates Foundation committed US$1.5 billion to launch the programme.

Pneumococcal disease takes the lives of 1.6 million people each year – including approximately 800,000 children before their fifth birthday. More than 90 percent of these deaths occur in developing countries. Pneumonia, the most common form of serious pneumococcal disease, accounts for one in every four child deaths, making it the leading cause of death among young children.

GAVI estimates that the introduction of suitable and affordable vaccines against the disease could save approximately 900,000 lives by 2015 and up to seven million lives by 2030.
The two participating firms have committed to supply 30 million doses each per year, for a ten year period. These vaccines will be made available at US$ 3.50 per dose to be paid by GAVI and the developing country governments that introduce the vaccines.

For approximately 20% of the doses, companies will also receive an additional payment of US $ 3.50 for each dose they provide, which is paid with donor commitments (AMC funds). In total, this is a fraction of the current cost of pneumococcal vaccines in many industrialised countries.
The aim of this AMC is to stimulate the late-stage development and manufacture of appropriate vaccines at affordable prices.
Through the AMC, donors commit money to guarantee the price of vaccines once they have been developed. These commitments help provide vaccine makers with the incentive to invest the considerable sums required to finalise development of vaccines and build adequate manufacturing capacity to serve developing countries.

Firms can still make offers under the AMC as new calls for supply offers will be issued over time. In addition to GSK and Pfizer Inc., Panacea Biotec Ltd and the Serum Institute of India Ltd. are among the firms that have already registered with the programme and other companies have expressed interest in the pilot.

As more companies participate in the AMC, the long term vaccine price could drop further.

To provide the new vaccines to countries, GSK and Pfizer Inc. have committed to scale up their manufacturing capacity to appropriate levels.

Before introduction can begin, the vaccines must be prequalified by the World Health Organisation and approved by the AMC’s Independent Assessment Committee. Approval is expected sometime this year.