Five governments and the Bill & Melinda Gates Foundation pledged $1.5 billion on Friday to help give poor countries better access to vaccines against pneumococcal disease such as pneumonia and meningitis.
The Advance Market Commitment program creates financial incentive with a guaranteed price to persuade companies to invest the large sums of money it takes to develop new vaccines.
The GAVI Alliance, the Gates-funded group established to speed delivery of vaccines against a wide range of disease to the developing world, will run the program and allocate another $1.3 billion for it.
"We look forward to pharmaceutical firms applying to the Advance Market Commitment quickly in order to ensure the rapid introduction of life-saving vaccines," Julian Lob-Levyt, chairman of the Geneva-based GAVI Alliance, said in a statement.
Pneumococcal disease kills more than 1.6 million people worldwide each year, including at least 800,000 children. More than 90 percent of the deaths occur in the world's poorest countries.
The existing pneumococcal vaccine, Wyeth's Prevnar, protects against seven strains of the disease but these are not the ones most common in the developing world, GAVI said.
Wyeth, slated for takeover later this year by Pfizer Inc, will soon face a challenge from GlaxoSmithKline's new pneumococcal vaccine Synflorix, which won European approval in March.
Another problem is that vaccine research is often viewed as a low priority by pharmaceutical companies, especially when the target market is the developing world.
The current vaccine costs more than $70 per dose in the industrialized world but the new program funded by the governments of Italy, Britain, Canada, Russia and Norway aims to bring the long-term price down to $3.50 in poor countries.
"This innovative new model will mean faster access to vaccines for millions of children in poor countries," Bill Gates, co-chair of the Bill & Melinda Gates Foundation said in a statement.
The program aims to spur vaccine development by guaranteeing a price. This commitment provides pharmaceutical companies with the incentive to do the research and to build manufacturing capacity, the GAVI Alliance said.
Participating companies will agree to long-term commitments to supply the vaccines at lower and sustainable prices even after the donor funds are spent, it added.
The goal is to introduce the vaccines in up to 60 of the world's poorest countries by 2015 as part of the challenge to make the treatments part of regular immunization programs.