GAVI is shaping the vaccine market to the benefit of the developing world
There is evidence of GAVI's initial impact in the changing production and supply base, price declines in some specific vaccines and the entrenching of a tiered pricing approach that means poorer countries pay significantly less for vaccines:
Reduction in rotavirus and HPV vaccine prices
Source: GAVI Alliance, PAHO, UNICEF Supply Division, 2011

Reduction in rotavirus and HPV vaccine prices
As a result of long term supply agreements with manufacturers signed in 2012, GAVI will buy the bulk of rotavirus vaccine at a price of US$ 2.50 per dose (US$ 5 per course), a 67 percent reduction compared to the previous lowest price offered to GAVI of US$ 15 a course.
Another manufacturer offered its human papillomavirus (HPV) vaccine at US$ 5 per dose, a 64 percent reduction on the lowest public price at the time.
As countries prepare to apply for HPV vaccine support for the first time, GAVI is actively pursuing further price reductions from manufacturers.
Number of manufacturers and price decline of pentavalent vaccine
Source: UNICEF Supply Division, 2012

Pentavalent vaccine price falling
GAVI currently buys the majority of its vaccines in the pentavalent vaccine market. Predictable country demand for this vaccine and assured funding from GAVI has attracted new manufacturers to this market and led to a price decline:
- in 2001, GAVI procured vaccines from just one manufacturer. By 2011, this had increased to four manufacturers, two of which were based in emerging market economies;
- in 2011, GAVI paid a weighted average price of US$ 2.49 per dose of the combination pentavalent vaccine, a drop of 31% from US$ 3.61 in 2007 when most GAVI-eligible countries switched to pentavalent. This price drop will allow GAVI to immunise many more children against diphtheria, tetanus, pertussis, Haemophilus influenzae type b and hepatitis B.
Tiered pricing: vaccine prices in different markets
Source: UNICEF Supply Division, CDC Vaccine Price List. 2012

Tiered pricing
GAVI's business model has created an incentive for the pharmaceutical industry to set up a tiered pricing policy, whereby low-income countries are charged less than higher income countries for the same product.
GAVI-eligible countries are now firmly established as the accepted low-income pricing tier, with manufacturers using GAVI countries as a benchmark in their pricing strategies.
GAVI's 2011-2015 strategy includes a market-shaping goal that aims to ensure an adequate supply of vaccines to meet demand and minimise the costs of vaccines to GAVI and low-income countries.
Increasing number of GAVI suppliers based in emerging markets
Source: UNICEF Supply Division, 2011

More emerging market manufacturers
GAVI's ongoing success has signalled to vaccine manufacturers that there is a large and viable market for vaccines in low-income countries.
The emergence of this new market financially backed by GAVI has encouraged market entry, particularly from vaccine manufacturers based in emerging economies. In 2011, GAVI-supported vaccines were purchased from 10 vaccine manufacturers. Of these, five were based in emerging markets, compared with just one in 2001.