Market Dynamics

PATH’s history of market strengthening

Safe water project

Unlocking a lifesaving vaccine

Over its 40-year history, PATH has pioneered market-strengthening efforts to make essential health products affordable and available for those who need them. In 2005, PATH embarked on a project to expand accessibility to a vaccine to protect against Japanese encephalitis by supporting the manufacturer in achieving international quality standards, thereby enabling large-scale donor procurement, and negotiating an affordable price for public-sector buyers. The result was a lasting partnership with a vaccine manufacturer in China that has resulted in millions of people in Asia receiving a vaccine to protect against this deadly disease.

The challenge

Japanese encephalitis (JE) is a neglected disease that primarily affects the rural poor in 24 high-risk countries across Asia and the Western Pacific. The wide geographic dispersion of the disease exposes more than 3 billion people to infection each year. JE is caused by a virus transmitted by mosquitos, and it can lead to a fatal inflammation of the brain, as well as long-term neurological and psychological conditions. As many as 30 percent of patients that become symptomatic do not survive, and fatalities are mostly concentrated among children. Survivors often suffer from permanent neurological problems such as paralysis and the inability to speak.

Since there is currently no effective treatment for JE available, vaccination to prevent the disease is extremely important. When PATH began work on JE, the vaccines on the market were too expensive for use in many low-income countries, which meant most populations in high-risk areas went unprotected.

JE primarily affects the rural poor in 24 high-risk countries across Asia and the Western Pacific.

After a severe outbreak in 2005 that killed thousands of people in Nepal and India, PATH and its partners went looking for a solution. After surveying the vaccine market, PATH identified one JE-affected country, China, which had developed an effective vaccine that had safely protected millions of children for nearly 20 years. Yet, the vaccine was not widely used outside of China and could not be procured by global donors because it had not met international quality standards.

Japanese encephalitis vaccine. PATH/Rocky Prajapati

Increasing availability: securing global regulatory approval

To increase availability and quality of the JE vaccine, PATH began working with the Chinese manufacturer, the Chengdu Institute of Biological Products (CDIBP), and other partners to bring the vaccine to millions of people in need. In 2005, PATH and CDIBP started gathering evidence in preparation for applying to the World Health Organization (WHO) for prequalification status—an internationally recognized quality standard. The vaccine underwent rigorous clinical study in settings outside of China, and CDIBP underwent comprehensive inspections to ensure the vaccine and the manufacturing site met WHO’s international standards of quality, safety, and efficacy.

In 2013, WHO granted prequalification for CDIBP’s JE vaccine, the first-ever prequalification for a vaccine made in China. This approval unlocked funding for countries that needed support to buy the vaccine by allowing United Nations’ procurement agencies to purchase it. It also opened the door for the vaccine to be included in Gavi, the Vaccine Alliance’s portfolio, which finances vaccine purchases for low-income countries.

While PATH and CDIBP were working to increase the JE vaccine’s availability through WHO prequalification, the two organizations were also addressing another key bottleneck in accessing the vaccine, the issue of affordability.

Improving affordability through partnership

PATH recognized that regulatory approval by international agencies such as WHO was only one part of improving access for the product. If the vaccine were available to be procured by international agencies but remained unaffordable for the public sector in low- and middle-income countries (as other JE vaccines were targeted more to travelers from high-income countries), the global public health need would not be met.

To address the issue of affordability, PATH negotiated with CDIBP to agree upon a maximum public-sector price for the vaccine by governments within a defined JE territory and global procurers such as the United Nations Children’s Fund (UNICEF) with financing from Gavi. The current Gavi/UNICEF procurement price is $0.42 per dose. This pricing mechanism allowed vaccine introduction in countries with limited public health resources, while allowing CDIBP to earn a profit on the product. Through this agreement, PATH and CDIBP opened new markets for the vaccine and increased access to the vaccine for many. The public-sector price agreed to for the JE vaccine will remain in effect until 2033 for countries who are eligible for Gavi assistance.

JE vaccine market impact

For the first time, a vaccine for Japanese encephalitis became widely available in a number of countries thanks to efforts to ensure its quality and affordability. The availability of a WHO-prequalified JE vaccine product at an affordable price led to a rapid uptake of the vaccine. To date, an estimated 260 million people in countries other than China (including Cambodia, India, Laos, Nepal, Sri Lanka, South Korea, Thailand, and Vietnam) have received the vaccine, and PATH expects this number to reach nearly 300 million by the end of 2017.

A family with their vaccination cards at the JE vaccination campaign in Khon Kahndone Village, Xieng Khouang province, Laos. PATH/Aaron Joel Santos

By negotiating a public price that was both affordable and allowed CDIBP to earn a reasonable profit, PATH aligned public health outcomes with a positive business impact. CDIBP introduced the JE vaccine to untapped markets, resulting in large volumes of sales for the company, and previously unserved populations across Asia were able to access a lifesaving vaccine. PATH is continuing to work side-by-side with CDIBP today and is working to extend the impact and sustainability of JE immunization by improving awareness of and demand for safe and effective JE vaccines.

Header photo: PATH/Aaron Joel Santos