Pricing The HPV Vaccine

Updated: 2 days ago


Just last week, I wrote about how the high costs of cancer drugs are being called “immoral” by doctors and cancer researchers. This week, the price of another cancer-related treatment has hit the news, but for the opposite reason -- the makers of a vaccine for Human Papilloma Virus, which causes cervical cancer and several other cancers, have announced that they will dramatically cut their prices for people in the poorest countries.


The vaccines (Gardasil and Cervarix) cost about $130 a dose in the United States, but they’ll be selling for only $4.50 a dose in Ghana, Madagascar, Kenya, and other developing countries. These vaccines may have life-saving consequences for the millions of women who can’t afford the vaccine or the Pap smears that can detect early cervical cancer. The vaccine can also prevent penile and anal cancers in men, as well as genital warts in both sexes.


The global health community has applauded this news as a major victory for women’s health. However, the charity Doctors Without Borders (DWB) claims that the prices should be even lower. In an interview with the New York Times, DWB vaccine specialist Kate Elder claimed that the vaccines were developed with US taxpayer money, and the companies who sell the vaccine have already made billions of dollars. She said, “Why are the pharmaceutical companies still making profits off the backs of the poorest countries?”


Five dollars may be affordable for charitable organizations who work in developing countries, but it may still be too expensive for poor people paying out-of-pocket. The vaccine is delivered in three doses over six months, so the total cost will be $15, plus three visits to the doctor. Although this price is dramatically lower than the US prices, it may still be prohibitively expensive for poor people abroad. Glaxo and Merck, the companies who sell the vaccines, claim that the price can’t go any lower. They say that $4.50 pays for the cost of manufacturing the vaccine and won’t bring in any profits.


The debate over the HPV vaccine sheds light on the contested and contextual nature of prices. Furthermore, it reveals the wide gap between prices for the vaccine in different parts of the world. An American woman would have to pay $390 for all three doses of the vaccine, whereas the same product will go for less than $15 in Kenya. This price might be affordable for many Americans, whose insurance companies would cover it, but what about the uninsured? And even if Americans can pay for it, should there be a price limit?


The pricing system for HPV vaccines is understandable from a Price-based perspective -- these companies are charging what the market will pay. Consumers and charities in developing countries can’t afford $130 for the vaccine, so the companies lowered the price to a point that meets demand. Even if they don’t turn a profit with the vaccines in poor countries, they will promote a humanitarian image that will hopefully warm the hearts of more affluent consumers as well as the agencies that give grants for future research and development. 


However, the debates around these medical interventions go beyond Price-based considerations to include Moral concerns. Global health officials praised Glaxo and Merck for promoting fairer access to healthcare, a substantive value. On the other hand, American consumers have protested the price gap between rich and poor countries because it violates their own substantive value for fairness -- if the companies can sell the vaccine for less than $5 somewhere else, why should Americans be charged more than twenty times that price?


So what is the most “moral” price for these vaccines? Would it be better to charge people differentially based on their ability to pay, with the risk that more affluent consumers will be gouged? Or should we charge everyone a fixed price based on the cost of production plus a “fair” profit (however that is defined), with the risk of excluding low-income consumers in developing countries? Is it possible to balance these competing conceptions of fairness? 

Photo by Art Writ.



Citations:

  1. McNeil, Jr., Donald G. (2013). “Cervical Cancer Vaccine Prices Cut for the Poor.” The New York Times. May 9. (http://www.nytimes.com/2013/05/10/health/prices-cut-for-hpv-cervical-cancer-vaccines-for-neediest.html) 

  2. Biggart, Nicole Woolsey and Rick Delbridge. (2004). “Systems of Exchange.” Academy of Management Review 29(1): pp. 28-49.





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