This post originally appeared as a letter to the editor of Financial Times.
Andrew Jack’s report “GSK and Merck pioneer vaccine deal” (May 10) on a discounted human papillomavirus (HPV) vaccine price for the Global Alliance on Vaccines and Immunisation (Gavi) illustrates a continuing focus on the price, rather than on the value and affordability of a product in a given health system.
On one side, advocates such as Médecins Sans Frontières and global health funders focus on price-cutting, arguing that products will be more cost-effective and accessible if they are cheaper. On the industry side, “better” companies go for volume at low price while “worse” companies maintain prices and ignore access and, hence, limit overall revenues.
Yet neither the advocates for lower prices nor the industry recognise that price-cutting that ignores need and value is as arbitrary a policy as price-setting that ignores access and overall revenue.
To advocate bringing prices down on grounds of affordability, judged roughly using averages of gross domestic product per capita, makes no sense in the increasingly rich but also increasingly inequitable countries where the poor of our planet actually live (75 per cent live in middle-income countries). Averages may indicate cost-effectiveness but these governments are still not able to afford the costs of a vaccine introduction programme (that go well beyond the price of the product), and resources may be better used elsewhere to maximise health.
Advocates rightly say that the vaccine will prevent thousands of deaths from cervical cancer in low-income countries. However, these deaths will be prevented in 20-30 years at minimum. Meanwhile, these countries face health problems today that generate hundreds of thousands of immediate deaths from (other) vaccine and non-vaccine preventable causes. This is why a product’s price is not the major issue.
Instead, adoption of new health technologies should be based on the incremental costs and benefits and on immediate and longer-term affordability of a technology in a particular health system, and decisions on price should flow from that starting point.
More discussion of these issues in the context of the HPV vaccine is available here.
Kalipso Chalkidou, NICE International, UK; Amanda Glassman, Center for Global Development, US; and Yot Teerawattananon, Health Intervention and Technology Assessment Program, Thailand
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise.
CGD is a nonpartisan, independent organization and does not take institutional positions.
