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AP, LTW

(NYSE: GSK) and Pfizer Inc. (NYSE: PFE) made a 10-year commitment to supply developing nations with new pneumonia vaccines, the Geneva-based public-private partnership GAVI Alliance said Tuesday.

GSK said it would discount its drug Synflorix by 90 percent. The company, which operates its U.S. headquarters in Research Triangle Park, N.C., said it is supplying Synflorix and said it had invested more than $400 million in a dedicated manufacturing plant in Singapore to make hundreds of millions of doses in the coming years.

“The coalition that has made this possible is providing new means to transform global public health,” said GSK Chief Executive Officer Andrew Witty in a statement. “The AMC [advance market commitment] is precisely the sort of innovative model needed to accelerate access to vaccines for people living in the poorest countries. The typical 15-20 year ‘vaccine gap’ between access in developed countries versus the world’s poorest countries is unacceptable. This AMC means children in Africa will start to receive Synflorix this year.”

GAVI’s program to treat pneumococcal disease received initial funding of $1.5 billion from the governments of Italy, the U.K., Canada, Russia, Norway and the Bill & Melinda Gates Foundation.

“By guaranteeing the availability of initial purchase funds, the AMC enables vaccine makers to invest in development and manufacturing capacity,” GSK “In addition, by contracting significant volumes over the long-term, manufacturers can significantly reduce the cost of their vaccines. Pneumococcal vaccines will be supplied at an approximate reduction of 90% of the cost in developed markets. Over the ten year period of the agreement, GSK will supply up to 300 million doses of its pneumococcal vaccine, valued at approximately $1.3 billion.”

GSK also recently made commitments to fighting malaria and elephantiasis in the developing world.

"Today’s landmark announcement promises to make new vaccines available affordably, where they are urgently needed, and faster than ever before," said GAVI CEO Julian Lob-Levyt.

Pneumococcal disease, which includes pneumonia, takes the lives of 1.6 million people each year including approximately 800,000 children before their fifth birthday, according to GAVI. More than 90 percent of the deaths are in developing countries, with pneumonia accounting for one in every four child deaths.

GAVI set up the Advance Market Commitment program to get drugs to those in need. GAVI said affordable vaccines could save 900,000 lives by 2015 and up to 7 million lives by 2030.

Glaxo and Pfizer will supply 30 million doses each, per year, for a 10-year period. The vaccines will be sold at $7 per dose initially, but prices then drop to $3.50 per dose for the most of the commitment. GAVI and the receiving nations will pay for the vaccine.

GAVI said the total is a fraction of the current cost of pneumococcal vaccines in many industrialized countries.

Pfizer will supply Prevenar 13, which is approved for use in infants and young children in more than 40 countries. The company said it is boosting manufacturing capacity to meet global demand.