Vaccine Policy and Advance Market Commitments
November 5, 2011 vol xlvI nos 44 & 45 EPW Economic & Political Weekly Pages 18-9
COMMENTARY
november 5, 2011 vol xlvI nos 44 & 45 EPW Economic & Political Weekly
18
Vaccine Policy and Advance Market Commitments
Jacob Puliyel
The new National Vaccine Policy Draft 2011 by the Union Ministry of Health and Family Welfare comes out openly in favour of public-private partnerships and suggests flexible governing and funding mechanisms to support vaccine development in the PPP mode. This article argues that our vaccine policy must look into the health of the children in the country and it should not be overly concerned solely with the viability of the vaccine industry
COMMENTARY
november 5, 2011 vol xlvI nos 44 & 45 EPW Economic & Political Weekly
18
Vaccine Policy and Advance Market Commitments
Jacob Puliyel
The new National Vaccine Policy Draft 2011 by the Union Ministry of Health and Family Welfare comes out openly in favour of public-private partnerships and suggests flexible governing and funding mechanisms to support vaccine development in the PPP mode. This article argues that our vaccine policy must look into the health of the children in the country and it should not be overly concerned solely with the viability of the vaccine industry
support vaccine development in the PPP mode, because “the private sector has the discipline and culture for business development
and marketing”.
The policy draft states that industry (the private partner) will in future be allowed
to influence policy. It states that “industry must be provided a channel to voice opinion to be utilised in framing policy”. The fact that this would invite conflicts of interest because of the tension between the profit motives of industry and the promotion of public health is ignored.
Furthermore, the policy states that if industry has a “genuine concern that a decision is made to its detriment”, there must be a speedy redressal by an independent
(of government) mechanism.
The funding mechanisms will ensure that costs are borne by the government and profits are reserved for the private partner for their “entrepreneurial skills and marketing abilities”. The document even suggests that repositories in public sector institutes and platforms in the Indian Institute of Technology must support the vaccine industry (private partner) as they manufacture “risky vaccines”.
The policy prescribes the “risk of manufacturing
vaccines must be cushioned by assistance from government”. The boldest suggestion is that it should be “mandatory for government to support developments with Advance Market Commitments and honour the commitments”. It further says that a vaccine fund, through “innovative financing mechanisms” must be considered,
for introducing new vaccines.
Advance Market CommitmentsThe concepts of advance market commitment
(AMC) and the implications of the term “innovative financing” as used by the Global Alliance for Vaccines and Immunisation
(GAVI) – an organisation of vaccine manufacturers, the Bill and Melinda Gates Foundation and the World Health Organisation
(WHO), among others need to be stated explicitly.
AMCs are aimed at providing incentives for new vaccines through guaranteeing the market for the product even before it is tested – the government promising it will buy a certain amount of vaccines at a
given price. It is to be binding even if the vaccine produced has poor efficacy orsupport vaccine development in the PPP mode, because “the private sector has the discipline and culture for business development
and marketing”.
The policy draft states that industry (the private partner) will in future be allowed
to influence policy. It states that “industry must be provided a channel to voice opinion to be utilised in framing policy”. The fact that this would invite conflicts of interest because of the tension between the profit motives of industry and the promotion of public health is ignored.
Furthermore, the policy states that if industry has a “genuine concern that a decision is made to its detriment”, there must be a speedy redressal by an independent
(of government) mechanism.
The funding mechanisms will ensure that costs are borne by the government and profits are reserved for the private partner for their “entrepreneurial skills and marketing abilities”. The document even suggests that repositories in public sector institutes and platforms in the Indian Institute of Technology must support the vaccine industry (private partner) as they manufacture “risky vaccines”.
The policy prescribes the “risk of manufacturing
vaccines must be cushioned by assistance from government”. The boldest suggestion is that it should be “mandatory for government to support developments with Advance Market Commitments and honour the commitments”. It further says that a vaccine fund, through “innovative financing mechanisms” must be considered,
for introducing new vaccines.
Advance Market CommitmentsThe concepts of advance market commitment
(AMC) and the implications of the term “innovative financing” as used by the Global Alliance for Vaccines and Immunisation
(GAVI) – an organisation of vaccine manufacturers, the Bill and Melinda Gates Foundation and the World Health Organisation
(WHO), among others need to be stated explicitly.
AMCs are aimed at providing incentives for new vaccines through guaranteeing the market for the product even before it is tested – the government promising it will buy a certain amount of vaccines at a
given price. It is to be binding even if the vaccine produced has poor efficacy or
support vaccine development in the PPP mode, because “the private sector has the discipline and culture for business development
and marketing”.
The policy draft states that industry (the private partner) will in future be allowed
to influence policy. It states that “industry must be provided a channel to voice opinion to be utilised in framing policy”. The fact that this would invite conflicts of interest because of the tension between the profit motives of industry and the promotion of public health is ignored.
Furthermore, the policy states that if industry has a “genuine concern that a decision is made to its detriment”, there must be a speedy redressal by an independent
(of government) mechanism.
The funding mechanisms will ensure that costs are borne by the government and profits are reserved for the private partner for their “entrepreneurial skills and marketing abilities”. The document even suggests that repositories in public sector institutes and platforms in the Indian Institute of Technology must support the vaccine industry (private partner) as they manufacture “risky vaccines”.
The policy prescribes the “risk of manufacturing
vaccines must be cushioned by assistance from government”. The boldest suggestion is that it should be “mandatory for government to support developments with Advance Market Commitments and honour the commitments”. It further says that a vaccine fund, through “innovative financing mechanisms” must be considered,
for introducing new vaccines.
Advance Market CommitmentsThe concepts of advance market commitment
(AMC) and the implications of the term “innovative financing” as used by the Global Alliance for Vaccines and Immunisation
(GAVI) – an organisation of vaccine manufacturers, the Bill and Melinda Gates Foundation and the World Health Organisation
(WHO), among others need to be stated explicitly.
AMCs are aimed at providing incentives for new vaccines through guaranteeing the market for the product even before it is tested – the government promising it will buy a certain amount of vaccines at a
given price. It is to be binding even if the vaccine produced has poor efficacy oreven if the market price of the vaccine is a fraction of the AMC price. AMC was first used for pneumococcal vaccine research. The vaccine that resulted from this effort prevents just four cases of cough and cold for every 1,000 babies vaccinated and the vaccine costs Rs 1,200 per child at the United Nations International Children’s Emergency Fund (UNICEF) prices. The cost of vaccinating
1,000 children to prevent four cases
of pneumonia is Rs 12 lakh. Instead, on an average, treating the pneumonia in four children with the drugs recommended
by the WHO would cost only Rs 40.
The money for the vaccine in the AMC must be deposited with the World Bank even before the delivery of vaccine, so the directors of the pharmaceutical do not have to lose sleep about marketing the drug or about withdrawal of orders on account
of the low efficacy of the product. The policy drafters understand the government
will not be able to foot the hefty bill. The draft, therefore, helpfully suggests “innovative financing” to be able to make the money available to the World Bank
upfront. The term “innovative fifi
nancing”
is GAVI speak and must be understood as such. The Government of India is being urged to issue sovereign bonds in the capital
markets so that investors and speculators
can put up the money. This is a win-win situation for the pharmaceutical industry
and the bond investors – for all, except perhaps the taxpayer. These innovations
need careful consideration before this is accepted as a national policy.
Moving ForwardVaccines have eradicated small pox and it is one of the greatest successes of modern medicine. Characteristics of vaccines in the past have been their low costs and their remarkable cost-effectiveness. The diphtheria,
tetanus, pertussis vaccine (DPT) costs less than Rs 15 for all the doses needed to immunise a child. According to the National Family Health Survey, we are not been able to provide this vaccine to half our population.
The production of these essential vaccines, inexpensively in our public sector undertakings, was a source of security for the country, at a time when private manufacturers
were dropping out of the market because of the low profitability of these products. The public sector should be what the national vaccine policy supports.
It is no one’s case that more expensive vaccines sold by private manufacturers must not be introduced in the public health system in India. However, there must be a transparent evaluation of the need for the vaccine and it must have demonstrable
cost-effectiveness. Vaccine policy must enunciate these guiding principles and describe
how the evaluation is to be done. Our vaccine policy must look into the health of the children in the country and it should not be overly concerned solely with the viability of the vaccine industry.
This looks like a policy not to have a policy, but to utilise vaccines indiscriminatingly.
If we are being asked to make long-term advance market commitments before evaluating the utility or even the market value of a vaccine, this policy needs a careful scrutiny.
Note
1 http://www.slideshare.net/prabirkc/national-vaccine-policy-2011