As GSK and Pfizer roll out pneumococcal vaccines in Kenya, MSF asks are donors getting a fair deal?

A vaccine to protect children against pneumococcal diseases will be launched in Kenya next week as part of an international program to bring the new vaccine to poor countries. Kenya will be one of the first African countries to receive the new pneumococcal vaccine.

Introducing the new pneumococcal vaccine (PCV) in developing countries is a critical step that can prevent millions of bouts of illness and countless deaths in children, says the charity Medecins Sans Frontieres (MSF), which will start vaccinating children with PCV in Kenya. The rollout of this new vaccine also offers a window of opportunity to strengthen the coverage of other basic vaccinations in the developing world.

However, says MSF, a closer look at the financing mechanism to support this program, called the Pneumococcal Advance Market Commitment (AMC), reveals that two multinational pharmaceutical companies - GlaxoSmithKline (LSE: GSK) and Pfizer (NYSE: PFE) - are receiving a significant subsidy, funded by donor governments, in order to secure their participation in the scheme. The companies have each agreed to sell 30 million doses annually for 10 years in exchange for $3.50 per dose, plus a total subsidy of $225 million for each company. If GSK and Pfizer increase the number of doses they supply annually, they will receive more subsidy payments, the charity notes.