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LONDON — GlaxoSmithKline PLC has agreed to cut the British government's order of H1N1 swine flu vaccine by around a third without penalty.
Under an agreement announced Tuesday, the government's order has been capped at 34.8 million doses. It will not pay a cancellation fee after both sides agreed that the settlement, terms of which were not disclosed, represented "fair value."
The British government had ordered enough vaccine to protect the entire population if needed, but was later advised by experts that contingency would no longer be necessary.
"This deal means the UK will save approximately one third of the original value of the orders with GSK," said Health Secretary Andy Burnham. "This both protects the public purse and ensures the UK remains at the forefront of pandemic preparedness worldwide."
Glaxo, which is the biggest supplier of H1N1 vaccines, has already reached agreements with Germany and Belgium to cut vaccine orders by those countries.
Simon Jose, General Manager of GSK U.K. said the company was committed to working with the government "to respond to their needs as the pandemic evolves and find appropriate and fair solutions."
The British government said that vaccines that haven't been used will be kept as a strategic reserve in case of another wave of the illness. It also plans to donate 3.8 million doeses to the World Health Organization to boost immunity in Africa before the rainy season.
Glaxo will also provide the government with doses of H5N1 bird flu vaccine and antiviral drug Relenza to replace the amount used during the swine flu outbreak.
Since swine flu emerged last April, more than 17,000 people have died worldwide, according to WHO. It says that number is an underestimate because many cases were missed and most countries with large outbreaks stopped counting individual cases.
Glaxo shares closed 0.3 percent higher at 1,260 pence ($19.19) on the London Stock Exchange.
