Thanks big drug!

The big news concerning the health of the millions of poor and sick across the third world, and obviously very briefly reported in the ever-sensational tabloidical Indian media, was that the major drug companies of the world have reduced the prices of major life-saving drugs such as those for diarrhoea and malaria, which kill millions of men, women and children in the poor nations across the world.

This is good news, definitely, and before I start talking about whats in it for them, let me try to dig out more details of this development. So according to the BBC News, GlaxoSmithKline, Merck, Johnson & Johnson and Sanofi-Aventis have agreed to cut prices through the international vaccine alliance called GAVI (Global Alliance for Vaccines and Immunization).

According to the news, the medicines will be subsidized by the higher prices being charged in the richer nations. According to the CEO of GSK, Andrew Witty,

"What we need is a return to invest in the next generation of new vaccines and drugs and that has to come from the profits of the medicines or the vaccines," Andrew Witty, chief executive of GSK told the BBC.

"But it's obvious that if you're in Kenya or a slum in Malawi or somewhere like that there is no capacity for those people to contribute to it, so they have to be helped out by the contribution from the middle and the richer (countries)."

There's something that I have been really curious to get some concrete data on - how much of the R&D investments of the big drug companies is going into life saving drugs and how much of it is going towards the lifestyle diseases, which mainly afflict the richer nations.

Some examples of the price cuts are:

GSK said it would cut the price of its vaccine for rotavirus by 67% to $2.50 (£1.50, Rs. 112.5) a dose in poor countries.

Merck has said it will provide its own rotavirus vaccine for $5 a dose, coming down to $3.50 (Rs. 157.5) once more than 30 million doses have been sold.

The good thing is that Indian pharma companies too are working towards these price cuts.

The price Gavi pays for pentavalent vaccines, which protect against diphtheria, tetanus, pertussis, hepatitis B and Haemophilus influenzae type B will be cut by two Indian firms, Serum Institute and Panacea Biotec.

According to the coverage in the Times of India, which focuses on the Indian companies that are part of this pledge, the alliance is short by USD 4 billion in its commitments towards vaccinating populations in many poor countries.

Bharat Biotech, Serum Institute and Shantha Biotechnics are developing rotavirus vaccines for GAVI-eligible countries. Vaccines from these firms, however, are not expected to be ready for purchase through Unicef until approximately 2015.

I think its my own ignorance in this case that I have not heard of GAVI before. The BBC article talks about them a lot, and in glowing terms, and I did read recently that Bill Gates found it.

Its not that its without its critics. One of the reader comments in the Times of India article that I just referenced is that GAVI is a "notorious NGO with an aim on depopulation!" However, that reader makes a very valid point - whether the price of a vaccine is low or high, for a healthy nation, the main aim should be reducing the number of vaccines given to the children. I think what the reader has in his mind is a thought similar to what I had regarding aid to the third world. Don't make them dependent on aid, rather, work towards creating avenues of growth so they won't need aid.

This article in the British newspaper, The Guardian, discusses why GAVI is so short on funds, but it also tells me how this seems like a big tragicomedy with huge hints of the white man's burden. The countries funding it are European, the NGO is western, and the companies winning their contracts are western, when it has been reported again and again that Indian companies can make the same vaccine at a much much lower cost.

Gavi agreed to pay $3.50 (£2) a dose, or $10.50 per child, since each child needs three shots. But to tempt companies in, it offered double that price in the first years, subsidised from the $1.5bn pot of money in the AMC. Two of the biggest pharmaceutical companies in the world - GSK and Pfizer - won contracts to supply 30m doses a year for 10 years. They were guaranteed $225m each from the AMC, in addition to the $3.50 Gavi pays, which works out at a total price of $7 a dose for the first two years.

Gavi has also committed itself to funding a range of other vaccines. The demands are so great that it may even struggle to afford the full rollout of a new vaccine to stop the annual death toll from meningitis across a central belt of Africa, even though the vaccine developed by an Indian company costs less than 50 cents a dose.

MSF and Oxfam say the money could have been better invested in helping developing world companies in India, China or Brazil to produce vaccines at a cheaper cost. The cheap African meningitis vaccine was made by the Serum Institute of India. The company is now working on a pneumococcal vaccine and will have a version available by 2015 that is expected to cost $2 a dose, or $6 (Rs.  a child.

I think its the power of big drug companies at work here. Since most of the funding comes from the western nations, I am assuming the pressure would be to engage companies that are based in the west. Its quite similar to the way the rich nations and now the Chinese do business - we will fund you, but you use our equipment.

Coming back to the question whether developing vaccines is really a priority for the big drug companies of the west, the article only briefly mentions that pharma companies (I am assuming it only means the western pharma companies) have left the field because of no profits. But if they are going to fund these vaccines from their profits from the medicines they sell in the rich nations, then that is in direct conflict with the raison d'etre of any public company - profit!

I can't seem to understand, but what would make more sense is if these companies would stop making it so difficult for the numerous pharma companies in India, Brazil and elsewhere to fill in the vacuum. Thats where the nations of the world need to come together and work out a proper agenda that will encompass all the poor nations in the world instead of leaving it to individual NGO's or institutions to try to make a change.