The Introduction of New Vaccines into Developing Countries II. Vaccine Financing

The development of new vaccines for important childhood diseases presents an unparalleled opportunity for disease control but also a significant problem for developing countries: how to pay for them. To help address this problem, the William H. Gates Foundation has established a Global Fund for Children's Vaccine. In this paper, we discuss the allocation of this and other similar funds, which we call Global Funds. We propose that allocation of the Global Funds to individual countries be guided in part by a Vaccine Procurement Baseline (VPB). The VPB would set a minimum of 0.01% of gross national product (GNP) as an amount each developing country would devote to its own vaccine procurement. When this amount is not sufficient to procure the vaccines needed by a developing country, the Global Funds would meet the shortfall. The amount required of donors to maintain the Global Funds would be about $403 million per year for both existing EPI vaccines as well as for a hypothetical group of five new vaccines costing $0.50 per dose and requiring three doses per child. Including program costs, poor developing countries currently spend about 0.13% of GNP on EPI immunizations. In contrast, the United States, as one example donor country, spends about 0.035% of GNP for childhood immunization including several new vaccines. This paper analyzes the Global Funds requirements for hepatitis B and Haemophilus influenzae type b (Hib) vaccines. After a ramp-up period, needier countries would eventually require about $62 million for hepatitis B and $282 million for Hib at current prices. Various additional criteria could be used to qualify countries for participation in the Global Funds.