Last Tuesday, drug makers Pfizer and Glaxo signed a ten year deal to provide vaccines at a reduced cost to poor, developing nations. The deal sets the supply of pneumococcal vaccines at 60 million per year for a ten year period.
The deal was set up by the Global Alliance for Vaccines and Immunizations (GAVI) and is the first test of their Advance Market Commitment (AMC) plan. The project was started as a way to provide drug makers with a fixed market in developing countries in exchange for fixed maximum costs for the products.
Both drug makers have agreed to sell the vaccines at $7 per dose for the first 20 percent and $3.50 per dose for the remaining 80 percent. In developed countries the same vaccines are sold for anywhere from $54 to $108 per shot. The project is partly funded by various governments as well as a large donation from the Bill and Melinda Gates Foundation. GAVI is hopeful that it will provide a model for similar agreements for vaccines for illness such as rotavirus and malaria.