Vaccines Are Good Business for Drug Makers

[Guest guest]

Z

 

Vaccines Are Good Business for Drug Makers

Thu, 18 Nov 2004 17:47:30 -0000

 

Croft Woodruff

 

" Vaccines Are Good Business for Drug Makers "

Comment: This is particularly so in the United States where vaccines

are mandated for children. Since the drug companies could no longer

get liability insurance owing to bankrupting lawsuits and it was

deemed essential to save the mandatory childhood vaccination program,

Congress assumed liability for vaccine induced death and injury by

setting up a Vaccine Adverse Events Reporting System (VAERS) and

compensation program in 1987.

Even in spite of application of the most stringent parameters that

would constitute a vaccine caused death or injury the United States

government has paid out an excess of one billion dollars - yes that is

right - $1,000,000,000.00 - in compensation to victims and their

families. This pay out represents only 10 percent of the death injury

claims against the program.

Insurance underwriters know the risks to take and the ones to avoid.

Vaccines are one risk they will not take so why should the parents?

Government liability guarantees are certainly good for the vaccine

business in the land of the brave and the home of the free.

In Canada there is no mandatory Vaccine Adverse Events Reporting

System. The courts tend see government medicare and doctors as sacred

cows. Judges tend to side with the vaccine manufactures in the

majority of lawsuits. Not only that, most doctors are reluctant to

testify against their colleagues since they are open to harassment by

their licensing boards. - CW

 

http://www.nytimes.com/2004/10/29/business/29inoculate.html?th= & pagewanted=p

 

New York Times

October 29, 2004

 

Vaccines Are Good Business for Drug Makers

By ANDREW POLLACK

 

As the nation tries to comprehend this year's shortage of flu vaccine,

many

experts have explained that the vaccines business holds little allure for

drug companies, because of low prices, strict regulations and uncertain

demand.

 

But try telling that to Nabi Biopharmaceuticals, a small company in Boca

Raton, Fla., which is testing one vaccine to protect patients in hospitals

and kidney dialysis centers from potentially fatal bacterial

infections and

another to help people quit smoking.

 

Or tell it to Vical, a San Diego company trying to develop an arsenal of

bioengineered vaccines for viruses like those that cause Ebola, West Nile

and SARS.

 

Or tell it to Wyeth, a big drug maker whose vaccine Prevnar, used against

the pneumococcal bacteria that can cause pneumonia, meningitis and ear

infections, costs more than $250 for the four-dose treatment given to

infants. Despite the price, the government has recommended that all

infants

get the vaccine, and insurers generally pay for it - as does the federal

Vaccines for Children program for low-income families. Prevnar, with sales

expected to top $1 billion this year, would be the world's first

" blockbuster " vaccine.

 

Vaccines, it turns out, can make for pretty good business.

 

Even flu vaccines, despite challenges that include the need to reformulate

the medicine each season, are potentially more lucrative than they used to

be, with wholesale prices up fourfold since the late 90's.

 

" I am not one of those who think this is an industry plagued by low

prices,

because it's not true, " said Anthony F. Holler, chief executive of ID

Biomedical, a Canadian company whose excess inventory of flu shots might

help augment the American supply this winter. " I just think that

people are

thinking of the business that occurred 10, 15 years ago. "

 

The current shortage has more to do with past government and industry

decisions, which reduced the nation's suppliers to two: Chiron and the

vaccine unit of Sanofi-Aventis. That occurred in part because the business

requires a heavy investment, which, economists say, tends to favor having

fewer, big suppliers rather than many smaller ones.

 

Now, to help prevent shortages, the government is considering steps that

include expanding the amount of flu vaccine it puts into an emergency

stockpile for childhood vaccines. This was the first year the government

decided to add flu vaccine to that stockpile. Another possibility is

guaranteeing the purchase of a certain number of flu shots each year,

possibly beyond what the industry is contemplating manufacturing. That

might

attract more companies to the business or induce existing ones to produce

more than needed, providing some cushion in case one supplier runs into

problems.

 

As those proposals indicate, the vaccine business is as complex as the

market dynamics that drive it. That is why the medicines receiving the

biggest push from the industry are likely to be ones with a perceived

market

in the United States, which spends more than half the world's drug

dollars.

 

With American free-market forces so heavily in play, vaccines for

malaria or

other diseases that mainly afflict developing countries are not likely

to be

pursued except through philanthropic efforts. But with diseases that

affect

Americans, the combination of new technologies, higher prices and new

target

populations - adults, not children, for instance - are opening new vistas

for the business, even as the older childhood vaccines generally remain

lower-priced commodities.

 

" It's a tough business for older products, " said R. Gordon Douglas, an

industry consultant who ran the vaccine business for 10 years at Merck &

Company. " It's a good business for new products. "

 

The role played by government can be crucial to determining what vaccines

get produced, at what prices and in what quantities.

 

For older vaccines used to prevent childhood diseases like mumps, measles

and diphtheria, for example, more than half the doses are purchased by the

federal Vaccines for Children program. Prices are capped so they rise no

faster than inflation. At $10 to $30 a dose, such vaccines are not a

growth

market, which helps explain why there is only a single supplier for

five of

the eight recommended childhood vaccines and why periodic shortages still

occur.

 

Like many of the older childhood immunizations, flu vaccines are

considered

commodities. But because most are sold through the private sector,

there are

no caps on prices.

 

In the late 1990's four companies supplied flu vaccines but two -

Wyeth and

King Pharmaceuticals - dropped out, citing low profits and heavy

expenditures to meet increasingly stringent regulatory requirements to

prevent contamination.

 

In the same period, however, demand for flu shots was on the rise as

government health officials expanded the categories of people

recommended to

receive the vaccine. As a result of that demand and the reduction in the

number of suppliers, flu vaccine prices have quadrupled since the late

1990's, to around $8 a dose wholesale.

 

That trend appeared to be attracting more companies to the field even

before

the recent shortage. Chiron, for instance, acquired a British flu vaccine

company last year largely to enter the American market; it was problems at

the British plant, not a lack of profit motive, that created Chiron's

shortage.

 

And ID Biomedical of Canada had been planning to enter the American market

in a few years, though the shortage might now speed its entry. Others,

like

Baxter International, have been weighing entering the market within a few

years.

 

Various economic arguments can be made for why the government should

play a

role in promoting the use of vaccines. One is that they are among the most

cost-effective modes of medicine. Preventing a disease - often, the

inoculation lasts a lifetime - can be far less expensive than treating it

once it develops and spreads. Economists have estimated that every dollar

spent on some of the inexpensive childhood vaccines has yielded

benefits as

high as $27. But left to their own devices, individuals may not highly

value

vaccines because of the uncertainty that they themselves will ever get the

disease.

 

Whatever the government's role, there are business obstacles for vaccines,

including a much smaller market than with drugs. Total sales of all

vaccines

worldwide are around $8 billion, less than sales of Pfizer's Lipitor

cholesterol-lowering pill alone.

 

And because vaccines are given to healthy people, safety and liability

concerns can be greater than with drugs, which are given to sick

people, who

are willing to bear some risk of side effects to get better. Liability

concerns drove many companies out of the vaccine business before Congress

enacted a law in 1986 providing some protection to makers of childhood

vaccines. Companies say they are still vulnerable on adult vaccines

and are

still being sued for the use of thimerosal, a mercury-containing

preservative that has been largely removed from pediatric vaccines.

 

Potential liability is also on the mind of Merck, which hopes to get

approval for a vaccine aimed at rotavirus, a cause of life-threatening

diarrhea. The company is testing it on 70,000 children - an enormous

number

for a clinical trial - because the company wants to rule out a rare side

effect that caused a rotavirus vaccine by Wyeth to be pulled from the

market

in 1999.

 

Merck, which recently withdrew its painkiller Vioxx from the market

and has

had several drugs fail in clinical trials, is counting three vaccines

among

the most important products it expects to bring to market in the next few

years. Besides the rotavirus vaccine, there is one for human papilloma

virus, which is believed to cause cervical cancer. The third is for

shingles, a disease of adults caused by the chickenpox virus.

 

As Merck's efforts indicate, many of the newer vaccines aim at adult

diseases. " In the next 15 to 20 years we're going to move from pediatric

vaccines to adolescent vaccines and adult vaccines, " said Vijay B. Samant,

chief executive of Vical.

 

If, as some economists argue, vaccines are underused relative to their

value

to public health, then the government could have several roles.

 

Urging vaccination, as is done for childhood diseases, assures

manufacturers

of a market. And the government can buy vaccines for a stockpile, as it is

now doing for vaccines for anthrax and smallpox.

 

But industry officials, like Wayne Pisano of Aventis Pasteur, the vaccine

unit of Sanofi-Aventis, say the most important factor for a healthy

vaccine

business is higher prices. " You can't have high investment, high

regulatory

requirements and low prices, " Mr. Pisano said.

[Guest guest]

do you know when thimerosal was removed form vaccines? thanks

[Guest guest]

it was suppposed to be around 95 if you trust them BUT its

still in the large dose vaccines-----i done recearce since my twin

grandbaby went into coma after shot----of course they denied it

said it was acid reflux------neither has gotten any more shots and

healthy as horses and ther little immune systems are getting

stronger all the time------the mmr and flu are the worst

 

 

-

sillymetl

Thursday, November 18, 2004 2:17 PM

Re: Vaccines Are Good Business for Drug

Makers

 

 

 

do you know when thimerosal was removed form vaccines? thanks

[Guest guest]

and also tell doctors u dont want 4 shots at a time and u

want vaccines from single vials

 

 

-

sillymetl

Thursday, November 18, 2004 2:17 PM

Re: Vaccines Are Good Business for Drug

Makers

 

 

 

do you know when thimerosal was removed form vaccines? thanks