This week has seen several pharma companies slashing the prices of important vaccines for use in developing countries, but is the move spurred by simple generosity alone? There are often headlines about pharma companies’ drug donations to developing countries and I think it’s great to see the pharma industry making a difference in this area. However, the price reductions may also stem from something other than generosity: the need to compete with other vaccine manufacturers, particularly at a time where more and more low-cost generic medicines are becoming available.

Indeed, many of this week’s price cuts have been made in response to a tender off for the rotavirus vaccine (the world’s second largest killer of children after pneumonia) from the United Nations Children’s Fund (UNICEF), which supplies medicines to children in developing countries. The reductions were detailed in a statement from the GAVI Alliance, a global health partnership that aims to increase access to immunisation programmes in poor countries.

GlaxoSmithKline (GSK) has come forward with an offer of just $2.50 per dose or $5 to fully immunise a child, which is a 67% reduction on the current, lowest available public price. However, GSK isn’t the only company  taking an axe to its prices. Merck has said it will offer its own rotavirus vaccine to UNICEF at a discounted price, and new market entrants in India, including Bharat Biotech, the Serum Institute and Shantha Biotechnics (a subsidiary of Sanofi Pasteur), are also developing rotavirus vaccines for GAVI-eligible countries, although these are not expected to be ready for purchase until 2015. However, these vaccines could encourage further price reductions. On its website, Bharat Biotech has said that it will offer $1 per dose.

According to Helen Evans, GAVI’s interim CEO, if the rotavirus vaccine could be purchased this year at a $2.50 price, the impact on public health could be significant. It would also enable GAVI to save approximately $500 million through to 2020, or about $140 million through to 2015, as measured against GAVI’s current financial estimates.

Cuts have also been made to the prices of other important vaccinations. For instance, the Serum Institute and Panacea Biotec (India) have both lowered the prices of their pentavalent vaccines. GAVI’s statement added, “The price reductions illustrate the key role of emerging market suppliers as new global players, contributing to both innovation and increasing competitiveness in the market place.”

Merck has also offered its human papillomavirus (HPV) vaccine at a reduced price of $5 per dose, while Crucell and Sanofi Pasteur have announced that they will extend GAVI prices on their pentavalent vaccines to the 16 countries expected to graduate from GAVI support. In its statement, GAVI added that these announcements build on similar commitments made to graduating countries by Pfizer and GSK.

“Our market-shaping goal is to achieve the lowest price for currently available products while maintaining supply security,” said Evans. “Looking forward, Alliance members will work to broaden competition and ensure the provision of quality vaccines at sustainable prices. Today’s announcements are a step forward to achieving this goal.”

GAVI’s statement was issued in the lead up to its first pledging conference, which will take place next week.