ANanni ISPPD2006 02Apr06

PneumoADIP’s Approach toBuilding A Win-Win-Win Situation for Industry, Donors & CountriesSupply, Price & Finance for Pneumococcal Vaccines for Developing Countries : PneumoADIP’s Approach to Building A Win-Win-Win Situation for Industry, Donors & Countries Supply, Price & Finance for Pneumococcal Vaccines for Developing Countries ISPPD April 2-6, 2006 Alice Springs, Australia


Overview : Challenges of supplying vaccine in developing countries What’s possible for a pneumococcal vaccine in developing countries PneumoADIP’s approach for making vaccine introduction a reality Strategic demand forecasting Overview


Challenges in Public Health Sector : Challenges in Public Health Sector Countries will adopt if the cost is acceptable given the potential health impact Funders will fund if their investment has the potential to significantly impact health outcomes Suppliers will manufacture if the cost / benefit ratio is acceptable Donors/ Countries Willing to Finance Countries Willing to Introduce Industry Willing to Supply Difficult to get information from one constituent without having credible information about the other two Difficult to generalize across developing world markets due to significant differences in market characteristics


PneumoADIP – Decision-Making Framework : PneumoADIP – Decision-Making Framework Seek win-win-win solution sets through analysis Use solution sets with key constituents Refine assumptions as information is shared Continually update analyses as information evolves


What’s possible for pneumococcal vaccination in developing countries? : What’s possible for pneumococcal vaccination in developing countries? Accelerated introduction by 2008 the current 7-valent vaccine, Prevnar, in countries where appropriate; laying the foundation for widespread use by 2010 of a 10-13 valent vaccine. Affordable pricing Requires supply strategy, evidence-based demand creation, and early commitment to finance the vaccine Credible strategic demand forecast 2010-2025 Prevents 3.6M child deaths by 2025


Slide6 : How is this possible? PneumoADIP demonstrated the market value in developing countries by: Creating a Strategic Demand Forecast


What is a strategic demand forecast? : What is a strategic demand forecast? A forecast that estimates demand into the future - Estimates country adoption dates over a 20 year period early adopters, early majority and late adopters; Estimates number of doses each country will uptake, the timing of introduction and the rate of uptake; Assumes a price that gives incentives for countries, donors, and suppliers to sustain vaccination; Analyzes the supply environment to assure adequate supply to meet demand from countries; PneumoADIP conducted research and analysis over a 2 year period to create a strategic demand forecast


How is a strategic demand forecast used? : How is a strategic demand forecast used? Industry creates to: budget 5-20 years in the future; address significant future uncertainty i.e. development success, time to market, product attractiveness and pricing support strategy development and investment decision-making


WHY is demand forecasting important? : The #1 omission that industry cited as an obstacle in working with the public sector was the lack of a credible demand forecast **Mercer study 2002 Lessons Learned: New Procurement Strategies for Vaccines www.gaviftf.info/docs_activities/pdf/lessons_learned_draft_final.pdf **McKinsey study 2002 examined alternatives & developed a “business case” for GAVI support of new vaccine introduction, again lack of credible demand forecasting was cited as the biggest obstacle WHY is demand forecasting important?


Strategic Demand ForecastInputs : Strategic Demand Forecast Inputs Global market assessment of pneumococcal vaccine. Analysis of the supply environment: Supply strategy working group Product profile Cost analysis Product portfolio Country analysis; quantitative & qualitative Financing requirements


Strategic Demand Forecast1.Global Market Assessment /Vaccine Market Size : Strategic Demand Forecast 1.Global Market Assessment /Vaccine Market Size Examining the market for new vaccines from a global market perspective is critical for: Informing donors on: Potential economic priority of high and middle income markets to suppliers Cost of low income market financing strategies Informing suppliers on: Potential value of low income markets Value of overall market to support investment decision-making


Global Market Assessment3 Key Building Blocks : Global Market Assessment 3 Key Building Blocks Vaccine Need Potential Vaccine Market Target Demand # of doses Need x DTP3 coverage rates Country willingness & ability to adopt vaccine Research data directs target demand Global birth cohort x 3 doses


Vaccine Market SizeKey Analysis Results – Potential Vaccine Market : Vaccine Market Size Key Analysis Results – Potential Vaccine Market *Low & Middle Income prices are PneumoADIP estimates; High Income prices based on CDC price list 2005 (http://www.cdc.gov/nip/vfc/cdc_vac_price_list.htm) Low Income Markets Value = $1.3 billion


Vaccine Supply Environment Components : Vaccine Supply Environment Components Supply Strategy Working Group 8 experts from World Bank, Gates Foundation, GAVI Fund, WHO consultants, USAID meet to review data, develop a supply strategy to assure supply is available to meet demand Product Profile Research Survey conducted with international public health experts and regional representatives to identify optimal product profile for a pneumococcal vaccine. Costing Study conducted by Mercer Management Comprehensive detailed research included costing of conjugation processes, formulation, filling, capital for both conjugate and protein vaccine environments.


Vaccine Supply EnvironmentSupplier Scenario – Components : Vaccine Supply Environment Supplier Scenario – Components In-Market Supplier Scenario For each supplier: Vaccine Availability COGs Assessment Market Share Assessment


Vaccine Supply EnvironmentPneumococcal vaccine pipeline : Multi-national Launched Clinical trial Phase III Clinical trial Phase II Clinical trial Phase I 9-valent 11-valent Steptorix1 10-valent Prevnar (7-valent) 13-valent 7-valent Pre-clinical stage >5 mulit-valent conjugate vaccine projects Emerging suppliers Expected launch 2008 ~20 vaccines in research/ Pre-clinical stage (includes conjugate & protein-based vaccines) Discontinued 1Completed first Phase III trial; results announced in Jun05 Development Stage Vaccine Supply Environment Pneumococcal vaccine pipeline Source: BCG Global Supply Strategy 2005 PneumoADIP team analysis


Vaccine Supply EnvironmentSupplier Scenario – Base Case* : Vaccine Supply Environment Supplier Scenario – Base Case* * For potential solution set analysis purposes only; not discussed with suppliers 2005-2009 1 supplier in the market with 100% of market share 2010-2015 Two suppliers in 2010 and share market 2016-2025 Third supplier enters market in 2015 (emerging supplier) Three suppliers share market Possible 4th supplier enters market.


Slide18 : Country Analysis / Segmentation Willingness & Ability to Adopt


Strategic Demand ForecastsPneumoADIP – Methodological Approach : Strategic Demand Forecasts PneumoADIP – Methodological Approach Earliest time to adoption Maximum acceptable price for each country Market price over time Funding strategy Seek Funding Agency commitment Seek Supplier commitment Change input assumptions and re-analyze If Yes win-win-win scenario Goal Achieved! Can Funders/ Country afford resulting demand? Will forecasted demand motivate Suppliers? Change input assumptions and re-analyze Change input assumptions and re-analyze Change input assumptions and re-analyze Define set of assumptions Conduct Analyses If Yes If Yes If Yes Seek Country commitment Change input assumptions and re-analyze If Yes


Slide20 : Strategic Demand Forecast Base Case $5 $4 $3 $2 $1 5 10 15 Hib Uptake over 15 years


Strategic Demand Financing Requirements : Strategic Demand Financing Requirements US$ millions


Analysis Results & ImplicationsPotential Solution Sets : Analysis Results & Implications Potential Solution Sets Clearly, many win-win-win solution sets can be found Now is the time to move from analysis to action Conversations of Possibilities Conversations for Commitment


PneumoADIP Supply & Finance : PneumoADIP Supply & Finance Thank you