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Price chop for vaccines for world's poor

A nurse vaccinates a child in a health center in Managua on Dec. 16, 2010.

Tess Vigeland: Each year, half a million children around the world die from diarrhea caused by rotavirus. There is a vaccine, but many poor countries can't afford it.

Today, Glaxosmithkline and other drug companies announced they're lowering what those nations pay for rotavirus and other vaccines. This may be a case where a little price transparency helped save lives. From our Health Desk at WHYY in Philadelphia, Gregory Warner reports.


Gregory Warner: Just about a week ago, UNICEF publicized for the first time the prices that it pays for vaccines for kids in poor countries. It revealed that Western drugmakers charge the agency up to $1 more per dose than companies in India charge. That adds up -- last year UNICEF bought two billion doses.

I reached Joan Howe of UNICEF by cell phone in Copenhagen.

Joan Howe: We published the prices because we believe that transparency is a positive thing in terms of creating the environment where competition is healthy amongst suppliers.

Today some of those suppliers, including Merck and Johnson & Johnson, said they'll cut prices for vaccines to UNICEF and other members of the Gavi Alliance. That's a coalition of governments, private donors and drug companies founded by the Bill and Melinda Gates foundation.

Richard Gold at McGill University is an expert in drug innovation and access to medicine. Gavi, he says, has been criticized for not using its leverage to reduce drug prices.

Richard Gold: Their interests are not necessarily to deliver the most vaccines to developing countries. It is a combination of goals. One is, yes, we want to provide access. But one is we want to support our own industries.

Nina Schwalbe: Driving towards the lowest price isn't always the best thing for kids.

Nina Schwalbe is managing director of policy at the GAVI alliance.

Schwalbe: You want to drive towards a sustainable price, keep a couple of manufacturers in the business so that you can also achieve supply security.

Schwalbe says she welcomes the discounts that drug companies offered today. They'll help narrow a $3.7 billion shortfall at the Gavi Alliance through 2015.

In Philadelphia, I'm Gregory Warner for Marketplace.

About the author

Gregory Warner is a senior reporter covering the economics and business of healthcare for the entire Marketplace portfolio.

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