The GAVI Alliance on Tuesday formally announced that drugmakers GlaxoSmithKline and Pfizer had signed off on a “10-year deal … to supply 60 million doses a year of cut-price pneumococcal vaccines to developing nations,” Reuters reports. The agreement is under what’s “called an Advance Market Commitment (AMC) which guarantees a market for vaccines supplied to poor nations but sets a maximum price drugmakers can expect to receive,” the news service writes (Kelland, 3/23).

“The vaccines, Pfizer’s Prevnar 13 and GlaxoSmithKline’s Synflorix, prevent pneumococcal disease, which includes pneumonia and meningitis. Pneumococcal disease kills 1.6 million people a year throughout the world, including 800,000 children before their fifth birthday, according to GAVI,” the New York Times reports (Pollack, 3/23). “More than 90 percent of these deaths occur in developing countries,” according to a GAVI press release. The group estimates the deal could help to save “approximately 900,000 lives by 2015 and up to seven million lives by 2030,” the release notes.

“Today’s landmark announcement promises to make new vaccines available affordably, where they are urgently needed, and faster than ever before,” GAVI CEO Julian Lob-Levyt said. “Through this AMC and thanks to the political will demonstrated by donors and least developed nations and the participation of the pharmaceutical companies, prevention against the world’s biggest childhood killer is now within reach,” he added (3/23).

“Under the agreement, Pfizer and GlaxoSmithKline will provide up to 300 million doses each of their vaccines over a 10-year period,” the New York Times continues. As part of the deal, “20 percent of the supply will be $7 a dose,” and the remainder will cost $3.50 a dose. “In Western markets, the pneumococcal vaccines sell for $54 to $108 a dose,” the newspaper writes (3/23).

“The AMC is precisely the sort of innovative model needed to accelerate access to vaccines for people living in the poorest countries,” GlaxoSmithKline CEO Andrew Witty said in a press release. “The typical 15-20 year ‘vaccine gap’ between access in developed countries versus the world’s poorest countries is unacceptable. This AMC means children in Africa will start to receive Synflorix this year” (3/23).

“Pfizer is dedicated to broadening access around the world to our medicines, and public-private partnerships such as the one involving the Advance Market Commitment are critical to achieving true inroads on this front,” Pfizer Chairman and CEO Jeffrey Kindler said in a press release, the Associated Press reports.

GAVI, together with the recipient countries, will pay for the reduced-rate vaccines, according to the AP. To date, GAVI has “received initial funding of $1.5 billion from the governments of Italy, the U.K., Canada, Russia, Norway and the Bill & Melinda Gates Foundation” to help launch the program, the news service adds (3/23). “But, GAVI still needs to raise another $1.5 billion by 2015 to pay for the procurement and distribution of the vaccines over the 10-year life of the program,” the New York Times writes (3/23).

GAVI is scheduled to meet with “state and private donors in the Netherlands on Thursday seeking an additional 4.3 billion dollars for the next five years to expand affordable immunisation against a variety of diseases,” Agence France-Presse reports. “The WHO and … UNICEF – both partners in the alliance – last year launched a global drive against pneumonia, including vaccination in developing nations,” the news service adds (3/23).

The New York Times writes that the “two companies would not disclose their costs but did not deny they would make money. ‘Certainly the whole notion was to create a sustainable model,’ said Gwen Fisher, a spokeswoman for Pfizer. ‘It wasn’t to make it into a money-losing proposition.'” The article includes comments from Orin Levine of the Johns Hopkins Bloomberg School of Public Health, who has worked with GAVI and Tido von Schoen-Angerer of Medecins Sans Frontieres (3/23).

GAVI said that “Panacea Biotec and the Serum Institute of India are among firms that have registered to the program and other companies have expressed interest in the pilot,” Reuters writes. “As more firms take part, the long-term vaccine price could drop further,” the news service adds (Kelland, 3/23).

GAVI “said the Pan American Health Organisation had waived its usual demand that its member countries could buy any vaccine at the cheapest price available in the world, clearing an obstacle to agreement by manufacturers to the AMC,” according to the Financial Times (Jack, 3/24).