Is G8 putting profits before the world's poorest children?

July 26, 2007

Only a quarter of the $1.5 billion donated by G8 leaders to eradicate disease among poor children will be spent on the costs of vaccines, while three-quarters will go to profits. G8 should instead negotiate the lowest, sustainable, non-profit price in order to maximize the number of lives saved and children who can benefit. These are the conclusions of a Comment published in this week's edition of The Lancet.

Professor Donald Light, Netherlands Institute for Advanced Study and the University of Medicine and Dentistry of New Jersey, USA, says that the kind of contract which the G8 is using was designed to match the revenues and profits which multinational pharmaceutical firms earn from medicines sold in affluent markets. But in this case, the G8 plans to purchase a pneumococcal vaccine that is already discovered and developed for affluent markets so it is really a large, extra contract that should be non-profit to help lift the burden of disease in poor countries. He says: "This alternative strategy could be called the Advance Maximum Benefit Commitment (AMBC)."

The current G8 contract is set to pay $5.00 - $7.50 a dose, about four times what Prof Light estimates to be the average cost, including capital and overheads costs for enlarging production facilities. Thus 300 million or fewer children can benefit from the donations, while if the G8 used the AMBC strategy, 1.2 billion or more children could benefit. Prof Light questions whether poor countries and donors will stand by and watch G8 paying four times the average sustainable cost of these vaccines.

Still better would be for G8 leaders to negotiate for licenses and technology transfer so that third-world based companies could compete for long term contracts. The donated money would then provide a double benefit: boost the economies of low income countries as well as lift the burden of disease. He concludes: "The low cost structure in developing countries might get the price down to $1 a dose, so that 300 million more children could be saved."


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