Measles Partnership Meeting

1. Measles Partnership Meeting Yalda MomeniSeptember 23rd - WDC

2. Vaccines – a New Perspective • …. not viewing vaccines as the life saving interventions they are. • A commercially viable commodities to invest in…. • Essentially - the supply perspective

3. High Product Sensitivity Biological products requiring constant temperature control Significant risks of production failures Highly regulated production environment Quality is the OVER-RIDING Criterion Dependency on well functioning NRA Limited Shelf life Cold Chain from Manufacturer to Child Very Limited Supply 1- 5 suppliers per product High entry cost to manufacturers How long does it take to make vaccine? Production of a dose: 6 -24 months Capacity Increase: 2-3 years New Plant: 5-7 years New regulatory requirements can cause interruptions Knowing the product profile from a supply perspective is key for supply planning Vaccines as Products • UNICEF Vaccine Procurement • No firm contracts for the majority of vaccines procured • 40% volume, 5% value • Funding often less than 12 weeks before delivery Summary: manufacturer taking risk in low profit environment!

4. Procuring the routine needs of 80 – 100 countries annually, alongside the procurement of vaccines for GAVI, the Measles Partnership and the Global Polio Eradication Program • Amounting to 40% of the global volumes but only 5% of the Global value • With significant increases in the overall procurement level over the past 10 years UNICEF has a significant role in the vaccine market in terms of volumes UNICEF has a significant role in the vaccine market in terms of volumes but limited in terms of value

5. UNICEF represents an important buyer in terms of volume on the Measles market Data Sources: Population Data: ‘The State of the Worlds Children 2008’ Procurement Coverage Data: UNICEF Vaccine Forecast 2008 Income Classification: World Bank Excl. self producing countries Covering the vaccine procurement for ~ 70% of the routine demand on the Global Market In addition to procuring the vaccines on behalf of the Measles Partnership Over 200m doses per year average for the past 3 years

6. However the picture is very different in the MR market Covering the vaccine procurement for less than 10% of the routine demand on the Global Market In addition to procuring the vaccines on behalf of the Measles Partnership Under 20m doses per year average for the past 3 years

7. In addition, Pricing trends within the vaccine markets are dependant on (i) levels of competition, (ii) demand profile within the market Weighted Average Prices for Vaccines Hep B – ‘High’ competition, declining prices BCG – 4 suppliers, stable pricing Measles – high dependency on 1 supplier, increasing prices DTP, declining demand, 2 suppliers per presentation, increasing prices • Within the MR market • Currently 2 WHO pre-qualified manufacturers • High dependence on one Manufacturer

8. Markets in Transition - Shifting the demand profile • Recent experiences within the DTP markets highlight the market transition within different settings

9. Current trend shows a clear preference and shift towards the combination vaccine with the timelines to shift being longer than anticipated The original forecasts contained a ‘potential switcher’ category where the actual demand was unknown and dependant on individual country decision Transition of DTP to STP-HepB/Hib demand UNICEF large influence on market. GAVI supported, Routine demand only - requiring individual country decisions to switch creating a level of uncertainty, moving from an established market to new markets. Rate of change gradual, longer timelines than anticipated.

10. PQ products Pipeline products Weighted average price Even with funded demand, the Pentavalent market took time to react- healthy market, increased availability & evolving pipeline- declining prices as new sources / products become available- more significant price decreases expected in next tender round (2010-2012)

11. Lessons Learnt from prior experiences • Market shifts require to be closely managed: • It is not only the establishment/ enhancement of new markets but the maintenance of the older markets needs to be monitored • ensuring an uninterrupted supply and balanced market requires multiple suppliers • With only one or two manufacturers in the market, supply interruptions are a real risk that need to be managed while the market is developing • The level of influence over the market is dependant on the level of availability versus demand, the market share both in terms of volumes and value. • Adoption of new products require individual country approval • the timelines for uptake are longer than global programme timelines • Sustainable demand is a key driver for manufacturers to engage in production • Affordable prices: • Healthy market (competition) needed before significant decreases in price can be expected

12. 3 Pillars of Vaccine Security UNICEF Vaccine Procurement – focused on achieving Vaccine Security - Ensuring the uninterrupted, sustainable supply of affordable, quality vaccines Appropriate Contracting Accurate Forecasting Firm funding - contracting could not occur without the necessary funding in place The forecast is the foundation of Vaccine security – it is the base upon which the production quantities are determined and funding needs identified • - to secure production • dependant on the individual vaccine markets

13. Vaccine supply 2009 and beyond • India Measles SIA and timing and volume • CRS elimination strategy and Rubella vaccine requirements • Increase need for country generated funding • Tender for EPI vaccines 2010-2012 in Q1 2009 • Supply arrangement in place 6 months prior to first delivery

14. What do we need….. • Realistic demand • Program Planning with Realistic timelines in terms of vaccine availability • Long term plans and demand projection Ensure uninterrupted, sustainable supply of affordable, quality vaccine!

15. UNICEF VACCINES • Thank You