On Jun. 16, 2020, lower-income countries across the world have access life-saving pneumococcal conjugate vaccines, which protect against the leading cause of pneumonia, for US$ 2 per dose, thanks to a supply agreement between UNICEF, Gavi’s procurement partner, and the Serum Institute of India (SII). The new price represents a 43 per cent reduction from the Gavi price of US$3.50 at the start of the Advance Market Commitment.

The supply agreement is the eighth to take place under the Vaccine Alliance’s Advance Market Commitment (AMC) mechanism, and the first to include a developing country manufacturer. Under the agreement, the Indian manufacturer will provide ten million PCV doses to Gavi-supported countries each year for the next ten years.The pneumococcus bacterium is the leading cause of severe pneumonia and is a major cause of morbidity and mortality worldwide. Most of these deaths occur in lower-income countries and include a disproportionate number of children under the age of two.

The AMC, which is set to end this year, was launched by Gavi in 2009 – with the support of donors Italy, the United Kingdom, Canada, Russia, Norway and the Bill & Melinda Gates Foundation – to solve a clear example of market failure: complex vaccines like PCV would normally reach low-income countries, where the disease burden is often highest, ten to 15 years after their introduction in industrialised countries. The AMC mechanism incentivised research and development (R&D), particularly for vaccines suitable for developing country epidemiological contexts, and an expansion in manufacturing capacity to meet demand from lower-income countries while maintaining an affordable price per dose.

A decade later the results are clear: the PCV vaccine has now been introduced in 60 lower-income countries, where coverage rates, at 48%, are now higher than the global average of 47%. Estimates indicate that more than 225 million children will have been vaccinated, and that over 700,000 deaths will have been prevented by the end of 2020. In that time, the AMC has catalysed a steady decrease in PCV prices and thanks to this eighth supply agreement will be closing this year having facilitated the entry of a new manufacturer to the market as well as a record-setting low price for Gavi-supported countries that will result in an estimated millions of dollars in savings for both Gavi and lower income countries’ vaccine budgets.  

Gavi, the Vaccine Alliance is a public-private partnership that helps vaccinate half the world’s children against some of the world’s deadliest diseases. Since its inception in 2000, Gavi has helped to immunise a whole generation – over 760 million children – and prevented more than 13 million deaths, helping to halve child mortality in 73 developing countries. Gavi also plays a key role in improving global health security by supporting health systems as well as funding global stockpiles for Ebola, cholera, meningitis and yellow fever vaccines.