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Global Vaccine Shortages: The Threat to Children - and How to Meet It

Cold Spring Harbor - 23 October 2002

Mr. Chairman, Distinguished Delegates, Ladies and Gentlemen:

Vaccine security and uninterrupted access to life-saving vaccines for all children are at the heart of UNICEF's programme priorities. That is why I take special pleasure in opening a colloquium that will focus on vaccine shortages on a global scale - and the threat that they pose to child health.

Twenty years ago, children in both developed and developing countries received the same basic vaccines - and their availability was more than adequate. The primary concern was mobilizing nations and communities to get the vaccines to children.

Today, capacity is a growing source of worry. As you all know, vaccine security - the sustained, uninterrupted supply of affordable vaccines - is at risk.

While a number of new vaccines have been developed, there are fewer vaccine manufacturers. There is also a growing divide between vaccines given to children in developing and developed countries.

Children in developing countries still receive the same basic vaccines that children around the world used to get - but those in industrialized countries are now receiving a new, considerably more expensive battery of vaccines.

The global vaccine market has changed significantly over the past decade.
As new vaccines are introduced, older, less profitable ones become progessively more devalued, which in turn forces more vaccine producers to exit the market. In fact, the overall number of manufacturers of basic pediatric vaccines that meet WHO standards has declined to 4 for each of the main basic pediatric vaccines, with over-dependence for some vaccines on one manufacturer with the high risk of shortages in cases of batch failure or other delays.

The effects are invariably felt at UNICEF, where vaccines are our principal commodity support to developing countries. Indeed, UNICEF is the single largest buyer of vaccines for children - 40 per cent of the global volume of vaccines. This includes those procured on behalf of GAVI, and for the worldwide polio eradication effort.

Vaccines and pharmaceuticals make up a substantial portion of UNICEF's global business portfolio. Last year, they represented 53 per cent of our $596 million outlay for supply and logistics. On a global basis, UNICEF purchases of vaccines totaled $261 million.

Tiered pricing, which allowed for lower prices for poor countries, while wealthier countries paid more for the same vaccines, is less viable when developed countries buy different vaccines than poor countries. While there are a number of emerging vaccine manufacturers in developing countries producing older vaccines used in the developing world, there are still not enough to meet the demand. Moreover, developing country manufacturers do not generally have research and development capacity, which is critical for innovation and the development of new and needed vaccines.

In 1992, vaccines generated approximately $2.9 billion in revenues. By 2000, revenues from vaccines had increased to $6 billion - an average annual growth rate of 10 per cent over an eight-year period. This growth is expected to continue, and likely accelerate, given both the recent focus on bioterrorism risks and the early stage of introduction in 2000 of some of the new vaccines driving revenue growth, such as meningitis C and pneumococcus.

Investment in research and development has also risen significantly, and is now at pharmaceutical industry levels. Yet against this backdrop of increases in revenue and investment, we also find ourselves in the paradoxical situation of facing increasing vaccine shortages - and often inadequate systems to deliver the ones we have.

As reflected in the participants who have come together for this colloquium, the issue of vaccine security is a domestic as well as global concern. The recent Report to the United States Congress by the General Accounting Office (GAO), highlighted vaccine shortages also facing the United States, outlining some of the causes for the shortages, which include production failures and higher-than-expected demand.

The shift to a single-dose preference among high-income country buyers, for example, has significantly increased the demands on capacity. It is estimated that the shift by the US Centers for Disease Control to single-dose presentations alone has doubled the filling capacity required.

The removal of the preservative thimerosal from vaccine production, as strongly encouraged by the FDA and other US regulatory bodies, is expected to further increase demand for single dose presentations, exacerbating constraints on filling capacity.

There are a number of common causes behind domestic and international vaccine shortages, principally inadequate forecasting and up-front financing.

Common issues facing manufacturers and buyers on both the domestic and international level include the need for long-term planning and commitments, as well as better communication between regulatory bodies, manufacturers and buyers. The long lead times involved in vaccine production and capacity increases make forward planning especially critical, even more so in a tight market.

So the question before us and the objective of this important colloquium is: What are we doing to address these concerns?

The recent Mercer study commissioned by GAVI, which you will be hearing more about tomorrow, underlined three key issues affecting vaccine supply, namely the need for appropriate returns for suppliers; open, collaborative relationships; and credible and predictable demand.

The study also outlines some key lessons learned to reduce vaccine shortages and ensure an adequate, uninterrupted supply. These include the necessity of assuming that the introduction of any new vaccine is almost invariably a multi-year effort.

It is also a multidisciplinary effort. Further, there are inter-dependencies between these disciplines, requiring strong coordination and communication. And consistent messages on priorities need to be sent to suppliers, potential donors and countries.

UNICEF's principal strategy for ensuring a sustained, uninterrupted supply of affordable vaccines is focused on three areas. First, it is vital that there be enhanced accuracy in long-term forecasting of demand. Second, UNICEF works closely with governments to arrange for firm commitments for multi-year sure funding. And third, we always seek to sign solid future vaccine-supply contracts with multiple manufacturers.

Nonetheless, obstacles abound. Among the principal challenges to procurement that UNICEF faces is inaccurate forecasting of vaccine needs, especially in low-income countries where planning is rudimentary and health delivery systems are under significant stress. There is only one solution, and that is to find ways to build national capacity-building for improved forecasting.

The availability of medicines often determines whether health services are used or not. Much more needs to be done to support public health systems to have access to vaccines and essential medicines.

Making those improvements is more and more the product of partnerships - but as we move toward reaching every child, there is a need to ensure that every partnership is working effectively. Some are not.
For example, some of the private-public partnerships that have flooded the development marketplace have been assembled without reference to the most fundamental goals of the partnership and relevance of the partners around the table.

More and more, the question should be asked: Partnerships with whom? And for what?

We have learned a great deal in the first two to three years of the GAVI partnership. One of the key lessons has been the importance of effective collaboration and communication between vaccine producers, international organisations and countries that are working together to supply vaccines and strengthen the systems to deliver them.

We have also made significant strides in improving collaboration and communication, building on lessons learned from the start of the global polio eradication initiative - and we expect to continue developing close and effective relations with producers of essential vaccines and pharmaceuticals.

Ladies and Gentlemen, we live in an increasingly interdependent world. Our human security is dependent on open channels of communications, flexibility, accountability and a shared sense of what matters. At UNICEF, we talk about - and live by - a principle of child-centred development. That is to say, development "with a human face," not measured by the number of hospitals or bridges built, but by the lives we are able to save.

The challenge before all of us at this colloquium is not only to come up with practical, tangible measures to ensure uninterrupted supplies of needed vaccines for children, but to mobilize producers to make decisions that are driven not only by short-term market gains, but by long-term concerns for human security.

Mr. Chairman, together we have the power, as individuals and as societies, to create a world fit for children, a place where every child has the opportunity to grow up in health, dignity and peace. I wish you every success in your work at this important colloquium - and I look forward to your recommendations on how we can best move forward to ensure the health and well-being of children everywhere.

Thank you.

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