The deal, brokered by the Geneva-based Global Alliance for Vaccines and Immunization (GAVI), is the first under a new scheme 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.
GAVI estimates that the introduction of new vaccines against pneumococcal disease -- which causes serious illnesses such as pneumonia and meningitis --- could save around 900,000 lives by 2015 and up to seven million lives by 2030. GAVI said it plans to introduce pneumococcal vaccines in 47 countries by 2015.
Reuters reported on March 11 that several leading drug firms had made long-term commitments in the agreement.
Glaxo and Pfizer each committed to supply 30 million doses of their Synflorix and Prevnar 13 vaccines to GAVI over 10 years, at $7 per dose for the first 20 percent supplied, dropping to $3.50 for the remaining 80 percent.
By comparison, Glaxo and Pfizer charge between $54 and $108 per shot for their vaccines in rich nations.
This is a landmark deal. It has been the result of four years of intense work and negotiation, and it means that this year, 2010, we can begin to roll out a better pneumococcal vaccine that can tackle one of the biggest killers of children in the poorest parts of the world, Julian Lob-Levyt, GAVI's chief executive, told Reuters in a telephone interview.
Pneumococcal disease claims the lives of around 800,000 under fives a year. In total the disease kills 1.6 million people a year and 95 percent of deaths are in Africa and Asia.
The pneumococcal deal will be partly funded by Britain, Italy, Canada, Russia, Norway and the Bill & Melinda Gates Foundation, who agreed in June last year to invest a total of $1.5 billion in the project.
Glaxo's Synflorix shot protects against 10 strains of the streptococcus pneumoniae bacteria which cause the disease, while Pfizer's Prevnar 13 shot protects against 13 strains.
This AMC deal could pave the way for future deals on recently introduced vaccines against rotavirus, which causes severe diarrhea, and an experimental treatment against malaria, which combined kill millions in poor countries each year.
The AMC scheme was devised to try to encourage drug companies to make and supply medicines and vaccines to boost health in poorer countries, which are generally unable to afford the high prices paid in Western markets.
Both Pfizer and Glaxo expressed interest in future AMC deals, saying they are committed to tiered pricing structures to ensure their drugs can get to the people who need them most.
Pfizer's senior vice president in charge of global biopharmaceutical businesses Ian Read said the AMC deal was a major milestone in GAVI's plans to get effective drugs to the world's poor.
Creating access is not just about having medicines, it's also about getting medicines to people who need them, he told reporters during a telephone briefing.
GAVI said drug firms can still tender under the pneumococcal AMC as new calls for offers will be issued over time.
Besides Glaxo and Pfizer, 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, it said. As more firms take part, the long-term vaccine price could drop further.
GAVI says it needs to raise a further $1.5 billion over the next 5 years to ensure the program is fully funded.