DRUGS companies could receive mark-ups of 700% under a plan, spearheaded by Gordon Brown, to fund the development of a vaccine aimed at saving millions of children's lives in developing countries. Of £750m ( 1.1m) donated for the scheme . . . a third by Britain . . . 80% will go in profits to the companies, according to one international expert.
The British prime Minister, who leaves this week for the Commonwealth heads of government summit in Uganda, is staking much of his international credibility on what he calls an "innovative scheme" to produce medicines for diseases which affect people in poor countries. Since the pharmaceuticals industry lacks incentives to develop such drugs, Mr Brown is backing an "advance market commitment", or AMC, under which governments in the developed world pay the production costs, plus an agreed margin.
The plan is to produce a vaccine for pneumococcal disease, which causes pneumonia, Africa's worst child-killer. But even though a hefty discount has been negotiated . . . 90% less per dose than what drugs companies charge in Europe and America for a different version of the same vaccine . . . experts say millions more children could be treated if the industry accepted a lower margin.
Donald Light, professor of bio-ethics at Princeton University and a leading independent authority on the pharmaceutical industry, called this "indefensible". Even at the price of £2.50-£3.50 per dose cited in the documents, he told an investigation for Channel 4 News, drugs companies could make a 700% mark-up over the cost of production, swallowing up four fifths of the money devoted to the scheme.
Although discounted, the vaccine will still be the most expensive in the developing world, leading to concerns that when the AMC fund runs dry in 10 years, poor countries could be forced to shoulder the costs.
Prof Light believes Mr Brown is "misinformed", and that the vaccine could be manufactured by drugs companies for as little as 25p a dose. He was backed by one of India's leading drug manufacturers, The Serum Institute.
The US drugs giant, Wyeth, already manufactures pneumococcal vaccine for use in Europe and America. It has proved one of the most lucrative vaccines in history, creating a £1bn market in which it is about to be joined by Britain's GlaxoSmithKline (GSK).
Since both companies have already developed vaccines to cover the strains of the disease most prevalent in Africa, critics say their R&D and capital costs for producing millions of doses under the AMC plan will be negligible.