Global Vaccine Market: Main Players and Questions of Price

Today I start a series of posts dedicated to the commercial aspects of the UN drug market; that is, the companies who produce and develop drugs and other medical substances that are essential for health development and relief programs. I will start by focusing on the areas that are currently declared by the UN (WHO, UNICEF) as main priority areas: malaria, HIV, maternal and infant health programs.

Although I acknowledge that there is a lot of debate about why the UN has decided to include precisely these ones into its Millennium Goals, for the moment I prefer to use them as the starting point of my research. Later, I plan to write a similar post on non-communicative diseases and emergency medications.

The current post is a short overview of the global vaccine market. Here I would like to share a table which shows the vaccine product mix of the top 5 global vaccine producers. It is no surprise that these are 5 of the biggest pharmaceutical companies - Sanofi, Merck, GSK, Pfizer and Novartis - whose cumulated proceeds from vaccine sales in 2012 exceeded $21 Bln, accounting for 80% of the global vaccines market. 

Around 7.5% of this revenue accounts for the so called UN Market (vaccines purchased for WHO and UNICEF programs) through governmental and institutional funding (including big NGOs such as Bill and Melinda Gates foundation), which means that these companies received around $1.5 Bln from development funds. However, if we look at dose volumes, the UN Market accounts for more than 50% of EPI vaccines produced (WHO Expanded Program of Immunization BCG, diphtheria-tetanus-pertussis (DPT), oral polio, and measles for all and Hepatitis B (HepB), yellow fever and Haemophilus influenza meningitis (Hib) for some countries). 

Top 5 Vaccine Producers and their product mix

The difference in pricing for industrialized countries and UN projects (for vaccines these prices are negotiated by the GAVI alliance) can reach up to 99%, like in the case of Prevnar 13, which is priced at $150 in the USA and supplied by $3.5 to GAVI (source: GAVI).

What do these figures mean for vaccine manufacturers and for consumers? For instance, does it mean that consumers in wealthy countries, who contribute 80% of vaccine revenue, are de facto subsidising these UN development programs? If yes, can this fact be better communicated and used for marketing purposes both by governments (who are the main customers in most countries) and by the drug companies, who try to maximize prices? Should these numbers by taken into consideration when calculating the indirect contributions of the wealthy nations to these development programs? How does this impact economic development models? 

I will try to dig deeper into these subjects in the following posts, but above is the promised table.