Vaccines: State of the Industry

1. Vaccines: State of the Industry • the global market for vaccines is US$8 billion/yr • This is the same as for one good cholesterol-lowering drug! • It costs about $850 million to bring one vaccine to market • This takes 15 yrs for an easy one...!

2. The first potential AIDS vaccine tested in large numbers of people has proven a failure…[it] offered no protection to the volunteers who received it. • After three years, the results were statistically identical: 5.8 percent of the placebo group became infected with HIV, compared to 5.7 percent of those receiving the vaccine.

3. Nature435, 273 (19 May 2005) In brief Vaccine makers flounder The number of US companies manufacturing vaccines has fallen from 26 in 1967 and 17 in 1980 to just 5 last year, and shows no sign of reviving. … Paul Offit… says that: “…high development costs, low revenues and the threat of legal liability are forcing manufacturers out of the vaccine business.”

4. Vaccines: State of the Industry • While fewer manufacturers, are more vaccines being introduced in recent years than ever before and investment higher now than any time in the last 100 years. • Two generations born since 1950s who are more concerned with complications of vaccination than the diseases protected against. • Thus research in industry now driven by innovation and safety • Investment is huge and there are 400 human vaccine candidates in the pipe right now.

5. Vaccines: State of the Industry • Problems: • Long lead times, • scientific hurdles being too high for many, • lots of duplication among products, • no viable market for some products, • huge effort required to bring products to market • Means that only best or most potentially profitable products go through.

6. Vaccines: State of the Industry How to establish priority for development of products? • Define an unmet medical need • Determine who will pay and what price was acceptable • Determine whether one has expertise to evaluate the opportunity, and then to develop the product. • How many unknowns were there: • is it known or new technology, and • how much would it cost?

7. Vaccines: State of the Industry Vaccine industry product pricing can be broken down as follows: • Research & Development 19%; • Site costs (plant, infrastructure) 16%; • Batch cost (material, processing) 24%; • Sales and distribution 31%; • Vialing and royalties, etc, 10%. • All except the last are FIXED costs – meaning lower cost of produced material would not change the cost of the product much.

8. Vaccines: State of the Industry Typical product lifecycle as follows: • Initial stage, small plant as initial demand low, and a high launch cost • More manufacturers would come in, capacity would go up and price down • With maturity, generics manufacturers would enter the market: • there would be big capacity, and • prices would be low. The 7 EPI vaccines are all in the last category – and BCG, etc., are selling for 7c US/dose. one can buy all EPI vaccines for a child for <US$2 (delivery adding another US$20).

9. ISIS Report - 1 May 2002 Doubts Deepen over Safety of AIDS Vaccines* Another key AIDS vaccine is abandoned before phase III trial. This latest setback comes at the end of a string of failures in developing vaccines that may be worse than useless. Dr. Mae-Wan Ho reports. “…a company in Texas, Prodigene, is putting gp120 into GM maize as a cheap, edible oral vaccine against HIV as announced in the internet journal, AIDScience. This will surely lead to widespread contamination of our food crops with disastrous consequences.”