VACCINES: TECHNOLOGY TRANSFER TO THE DEVELOPING WORLD John H. Barton Professor Emeritus, Stanford Law School Former Visiting Scholar, NIH Department of Clinical Bioethics
THIS IS A WORK-IN-PROGRESS: PLEASE CRITICIZE, ADVISE, CORRECT, AND SUGGEST, AS NEEDED! I speak purely for myself and not for Stanford or NIH.
VACCINE TECHNOLOGY TRANSFER STUDY • Why technology transfer? • Technology as engine of growth and science • Transfer as affecting access to products for local and global markets • Variety of modes changing over time • Severe restrictions under current international economic law • Why vaccines? • Crucial medical intervention • Reasonably separable area (and very different history from pharmaceuticals) • Interest
VACCINE TECHNOLOGY TRANSFER: OUTLINE • Heroic era (1891 => 1930s) • National public health: Growth and divergence (193Os = >1990s) • Global vaccination programs (1960s => 2000s) • Era of privatization and biotechnology (~1990 =>
I - HEROIC ERA • Smallpox: • Arm-to-arm vaccination – prehistory • Jenner – 1798 • Brazil – 1887 (predecessor of Butantan) • Rabies and Pasteur Institutes • Pasteur - 1885 • Pasteur Institutes • Dakar – 1896 • Saigon – 1891 • Now a network of 29 institutes, including 22 in developing nations • Researchers trained at Institut Pasteur • Haffkine (Bombay) – 1899 • Oswaldo Cruz (Rio) – 1900
NEW VACCINES IN THE HEROIC DAYS • Typhoid (1896) – Wright (England) and others; trials in India • Cholera (1896) – Haffkine, Delhi & Calcutta • Plague (1897) – Haffkine, Hongkong? • Diphtheria (1923) – Ramon (France) (antitoxin earlier) • TB (BCG) (1927) – France, but based partly on work in Saigon • Tetanus (1927) – Ramon (France) • Pertussis (1933) – Denmark & US • Yellow fever (1935) – RF (Lagos & New York); Pasteur (Dakar); trials in Brazil
DYNAMICS OF HEROIC ERA • Scientists had to go where the disease was (Arrowsmith syndrome) • Colonial policy (“mission civilisatrice,” “every colony should have its Institut Pasteur”) • Public health interest in more sophisticated developing nations (Brazil)
THE TECHNOLOGY IN THE HEROIC DAYS • Production involved small institutes doing both research and production (technology based on animal and flask culture) • Technology acquired through personal study (Institut Pasteur)
SMALLPOX VACCINE PRODUCTION – OSWALDO CRUZ – EARLY 20TH CENTURY Fernandes 2004
II - GROWTH AND DIVERGENCEDURING THE MID 20TH CENTURY • New vaccines • New technologies • New regulations
NEW VACCINES • Polio (Salk & Sabin) • Measles • Mumps • Hepatitis B • Meningococcus • Haemophilus influenza • Combinations
New technologies • Culture on chick embryos (Goodpasture, Walter Reed, 1931) • Tissue culture (Enders, 1949) • Biotechnological production of specific antigens (1980s) • Conjugate vaccines (1980s) • Plus improved separation methods and improved assays
NEW REGULATORY STANDARDS • “Jim” and Biologicals Act – 1902 • Cutter incident – 1955 – led to creation of Division of Biologics Standards in NIH, now in FDA • GMP and management of input materials 1963 and 1976 • Management of air pressure – 1978/87? • Documentation and Team Biologics --1990s
MEANWHILE, BACK IN THE DEVELOPING WORLD • World War II • Independence and conversion of colonial public health systems into national ones, often fighting for limited resources (later on with IMF and World Bank pressures on health budgets) • Lack of major scientific research programs comparable to those of the developed world (until Brazil, China, India in about 1980s)
THE BASIC PATTERN: • Many small scale producers (WHO found 74 rabies vaccine producers in 1984, many still using live animals) • Frequent GMP problems • Did not make most advanced vaccines • OPV, not IPV, partly because of WHO pressure • Whole-cell pertussis, not acellular • Brazil as major exception
Brazil – 1943Probably making yellow fever vaccine at Oswaldo Cruz Lacerda and Mello (2003)
THE RESULT:APPROXIMATE STATISTICSDTP COVERAGE - 1980 • Industrialized countries 60 % • Latin America 38 % • South Asia 5 % • East Asia 5 % • MidEast 25 % • Sub-Sahara Africa 5 % Hadler et al, Vaccination Programs in Developing Countries in Plotkin & Orenstien, Vaccines
TECHNOLOGY TRANSFER DURING THE MID AND LATE-20TH CENTURY • Early on – probably through personal contact, international meetings, and perhaps international education among scientists • Later in period – serious donor efforts: • RIVM – Vacsera (1980s) • CIDA, Connaught, UNICEF, AID – Pakistan (1981 and 1984) • Statens Serum Institut – Razi (1985) • Canada plus Oswaldo Cruz – Nigeria (1986) • Netherlands, Japan – Bio Farma (1991 & 1992) • World Bank – China (mid 1990s)
III - NEW ERA OF GLOBAL PROGRAMS • Eradication campaigns • PAHO & smallpox – 1950-67 • WHO - Global smallpox – 1967-77 • WHO - Polio – 1985-200? • EPI – 1974 • CVI – 1990 • GAVI – 2000 • Emergence of UNICEF/Rotary purchase system with tiered pricing
PROCUREMENT FOR THE GLOBAL PROGRAMS • Smallpox (1960-77) – encourage local procurement (smallpox animal technology) – developing nations supplied at least 80 % of own needs • Polio (1985-200?) – at first entirely developed-nation procurement, some developing-world manufacturers by the 1990s
EPI & PROCUREMENT • EPI created in 1974. • Latin American Revolving Fund – 1979 - supported by national health ministries. • UNICEF procurement system (1978?) – supported by donors, including Rotary and now Gates – with PAHO, now purchases roughly 70 % (by dose) of world’s childhood vaccine near marginal cost.
MORE ON THE 1990s REVOLUTION IN PROCUREMENT • EPI/UNICEF initially purchased from developed nations – but faced severe shortages and high prices as suppliers merged and reached capacity limits during 1990s. • 10 of 14 developed-world manufacturers partially or totally stopped production of traditional vaccines during 1998-2001 (UNICEF). • CVI study of quality and development of matrix in 1993-94. • WHO developed a prequalification system – 1989(?). • Now UNICEF buys more than 2/3 of its non-OPV vaccines from major developing-nation manufacturers – and small developing-nation manufacturers discouraged
IV - CONTEMPORARY ERA • Patents and intellectual property • TRIPS, stronger developed-world systems • Biotechnology • Heavy private sector role in developed world, with important public components, especially in vaccines • Privatization & emergence of private sector developing-world industry • Political and economic thrust throughout world
Fiocruz Facility - 2001 http://www.pharmaceutical-technology.com/projects/fiocruz/
ECONOMICS OF DEVELOPED-WORLD VACCINE INDUSTRY • In addition to development cost, very substantial manufacturing fixed cost and difficulty in changing due to regulation • Relatively low markup opportunity for mass-use childhood vaccines • Patent-based product exclusivity relatively rare, except on newer vaccines and not generally on mass-use children’s vaccines
PATENT ROLES • Barriers to entry generally based less on patents than on regulatory costs and economies of scale • But patents used on components (adjuvants, particular molecules, and processes) • Vaccine industry therefore does have to cover royalty costs for intermediates
VACCINE PATENT LITIGATION: RECENT CASES • Boehringer Ingelheim Vetmedica v. Schering Plough (CAFC 2003) – process for growing and isolating virus • Medeva Pharma Ltd. v. Am. Home Prods. (2001) – method of detecting pertussis antigen • Embrex v. Service Engineering (CAFC 2000) – method of injecting vaccine into egg • Evans Medical v. American Cyanamid (CAFC 1999) – pertussis antigen and vaccine based on it (parallel litigation in Europe) • Connaught v. SKB (CAGC 1999) – purification of pertactin
BIOTECHNOLOGY AND PPPs • Developed world biotechnology based on NIH, biotech startups, and license to Pharma • For developing world - PPPs • Especially HIV, malaria, TB • Public/private partnerships • Virtual development model • Most of research (except clinical trials) in developed world • These groups must be concerned about research tool patents, at least insofar as they do research in developed world • Patents generally a less serious issue for developing world firms (for traditional childhood vaccines) – but access to trade secret data may be harder!
PRIVATIZATION • Political & fiscal reasons • Economic reasons – higher salaries and greater management flexibility • Examples • VACSERA (Egypt) 1973 and 2002 • BioFarma (Indonesia) 1997
OTHER MOTIVES FOR CREATING DEVELOPING NATION MANUFACTURERS • Vision of biotechnology as a technology of the future • Indian Department of Biotechnology • Cuban CIGB • Private sector • Serum Institute of India 1966 • Shantha ~ 1990 • Bharat 1996 (created by Krishna Ella, U of Wis.)
DEVELOPING NATION MANUFACTURERS IN TODAY’S WORLD • Acquisition by UNICEF favors Europe and several developing-nation manufacturers – and UNICEF is the key international market for the developing-world firms • There are now many developing-world manufacturers (20 in DCVMN), of whom 12 have met WHO prequalification standards
THE CURRENT DEVELOPING WORLD SUPPLIERS TO UNICEF AND THEIR TECHNOLOGY SOURCES • BioFarma (Indonesia, OPV, DPT) • Dutch & Japanese governments • Fiocruz/Biomanguinhos (Brazil, YF) • 1980-83, 2000 Assistance from Japan • 1999, 2003 Alliances with GSK • Institut Pasteur (Dakar, YF) • Long term French input • Serum Institute of India (world’s largest producer of measles and DTP, 5th largest vaccine firm) • 1996 alliance with SKB • 200? NIH, PATH, WHO license for Meningococcal vaccine; also RIVM on Hib technology • Shantha Biotechnics (India, OPV, Hepatitis B) • Collaboration with Indian research laboratories and support from Oman
SOME OTHER MAJOR DEVELOPING WORLD PRODUCERS • Butantan (Brazil) • China (Chengdu, Lanzhou, Shanghai, Shenzen) • CIGB (Cuba) (WHO prequalified) • Instituto Finlay (Cuba, 6 vaccines) • Bharat (India) (NIH licensee on rotavirus vaccine, grants from Gates)
EXAMPLES OF OTHER CONTEMPORARY TECHNOLOGY TRANSFER PROGRAMS • Merck license to China (1989) • University of Ottawa & Cuba • Chiron-Behring joint venture to manufacture rabies vaccine in Gujurat (facility in 1991, venture in 1998 • WHO and DCVMN (2001) (NIH is a member)
BEGINNINGS OF GLOBALIZATION?(E.G. DEVELOPING-NATION SUPPLY TO DEVELOPED-WORLD) • GSK & Cuba – license to use Cuban meningitis B technology – 1999 • Berna Biotech (Swiss) purchase of GreenCross (Korea) – 2002 • Wyeth & Bharat – manufacture HiB on license - 2003
REFLECTIONS – TECHNOLOGY TRANSFER PATTERN • Phase I (for vaccines, pre 1930) – artisan-level technology, easily copied • Phase II (for vaccines, 1930-1995) – growth of many producers at local level, restricted by access to capital rather than to technology • Phase III (1995-20??) – globalization and integration, controlled by market structure, regulation, economies of scale in research and production • Note that all this depends on • The possible scale for the initial technology transfer • The timing of the spread compared with global political events such as the current moves to free trade and intellectual property
REFLECTIONS AND PENDING ISSUES FOR VACCINES - I • How long will the global donor market be there? • Recent dependence on Gates • Possibility of donor fatigue – we’re now in a global version of the public health mode • Procurement policy? • Relevance of growing private market in India (and possibly elsewhere)? • The PPP’s: • What likelihood of success? • What roles for DC or LDC manufacturers? • Continued support for procurement as the number of products grows (c.f. problems of integrating Hepatitis B into the EPI package)? • Bioterrorism • Suspicions of Iran and Cuba • Visas • Export limitations • New development models in the U.S.
REFLECTIONS AND PENDING ISSUES FOR VACCINES - II • Strategic licenses between developed and developing nation firms: • Mechanism of technology transfer for serving LDC market – what incentives for each side? Role in access? • Possibility of future off-shore production? – importance of labor costs? Feasibility of maintaining quality standards? Trends in economies of scale? Trends in integration? • Consolidation on a global scale? • Economic or research motivations? • Regulation, patents, and access to developed world markets? • Choice of markets by developing-country manufacturers?
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