In its recent report on vaccine pricing, Médecins Sans Frontières (MSF) recently called out pharmaceutical giants GlaxoSmithKline and Pfizer on what it refers to as “arbitrarily priced” pneumococcal vaccine. According to MSF, the nature of the pharmaceutical industry in general is pretty guarded and the prices for vaccines aren’t available for all countries.
What the organization does know, however, is that hospitals in Morocco and Tunisia pay around $64 to $67 for the pneumococcal vaccine, while those in France pay around $58. MSF is asking how this makes any sense, especially considering that both Morocco and Tunisia’s GNP is less than 10 percent of France’s.
From research and development to production, the pneumococcal vaccine is one of the more expensive vaccines out there. GSK refers to it as “one of the most complex we’ve ever manufactured, essentially combining 10 vaccines in one.” MSF isn’t asking Pfizer and GSK to give away its high-cost vaccine; it's simply asking it to cut the price down to $5 per child (each child needs three doses).
Bill Gates has responded to MSF's report by saying, basically, “you can’t get it for free.” Gates isn’t snubbing his nose at MSF's claims, what he’s saying is that if you lower the price of the pneumococcal vaccine, big pharma is more likely to stop pouring R&D money into it.
Gates reiterated the complex nature of the pneumococcal vaccine and offered praise to pharma companies that were willing to pour their considerable resources into developing such a costly product. He went on to say, “To focus on ‘why isn’t everything free’ is a misdirection that has to do with the fact that they don’t actually know anything about the costs.”
The point Bill Gates might be missing is that MSF isn’t asking to get the vaccine for free, nor is it asking for an across-the-board price cut. It’s just asking that it be affordably priced for developing countries.
Pharmaceutical companies currently offer many vaccines on a tiered pricing system. This sounds relatively simple, but in reality, it’s incredibly complicated. According to Gates, this pricing system has allowed countries to acquire the vaccine “at about a 50th of what the US price for these things would be.” He credits this pricing scheme for cutting the rate of childhood deaths by half.
The current pricing scheme isn’t necessarily bad; it just isn’t working for everyone, and it’s far from sustainable for many countries.
Related: Bill Gates