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UPDATE - June 2001
En Français
Global market – global vaccines?
Vaccines for developing and industrialized
regions have been diverging, but today’s global market is
changing rapidly. Phyllida Brown asks manufacturers and others
what the future holds
IT hasn’t happened overnight, but gradually over
a decade. Vaccines for certain diseases now come in different
versions: those bought mostly by the industrialized countries,
and those bought mostly for use in developing countries.
There are several reasons for the split,
including different patterns of disease and judgments of need.
But one key factor is the industrialized countries’ increasing
desire to avoid any adverse effects – however small or
uncommon – from vaccines against diseases which are now
relatively rare. In contrast, for most developing countries
where these diseases are still widespread, the benefits of the
traditional vaccines still heavily outweigh their risks, while
the newer vaccines are currently too expensive to be a
practical option.
Among the changes in industrialized countries,
for example:
- Acellular pertussis (aP) has largely replaced
whole-cell pertussis (wP) in the traditional "triple"
vaccine for diphtheria, tetanus and pertussis (DTP);
- Inactivated polio vaccine has largely
replaced the oral vaccine;
- Measles vaccine is usually combined with
mumps and rubella, instead of being given alone; and
- Vaccines are packaged as single doses,
without preservative, whereas in developing countries the
norm remains multidose vials and some contain the
preservative thiomersal.
Now, a team from WHO, the World Bank and the
company Aventis Pasteur have investigated whether this trend
towards two separate "tracks" is affecting the supply or price
of vaccines needed for developing and industrialized countries
(1)
. The answer is that, while today’s picture is still
uncertain, current trends could lead to supply difficulties
and higher prices in the forseeable future. Supplies of some
traditional vaccines, once well in excess of demand, have now
fallen to the point where they only narrowly exceed demand
(see Box
1 ). "A batch failure now could precipitate a shortage,"
says Julie Milstien at WHO, one of the study’s authors. And,
in some cases, prices that had remained stable for years are
creeping up.
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1: Endangered
species: how and why supplies have been falling
For years, the availability of traditional
vaccines supplied to UNICEF for the Expanded Programme
on Immunization exceeded demand, usually by many
millions of doses. But in the past three or four years,
supplies of some vaccines have declined so that they
only narrowly exceed demand. These include BCG, DTwP,
tetanus toxoid and measles (see Figure
1 ). For example, in 1998, UNICEF was offered 600
million doses of DTwP. In 2000, the agency received a
response to their tender of just 150 million doses.
Prices of these vaccines have remained static for long
periods but several, including measles and DTwP, appear
to be rising slightly now (1,2)
.
Part of the reason for the fall in
supplies is that the traditional vaccines, typically
priced at a few cents per dose for UNICEF, fail to
compete with newer vaccines such as Haemophilus
influenzae type b(Hib), whose profit margins are
much higher, for manufacturers’ limited capacities for
production, filling and packaging. "We buy the 'penny'
vaccines and compete for filling-line space with
multidollar vaccines," André Roberfroid of UNICEF told
delegates at last year’s GAVI Partner’s Meeting in
Noordwijk, the Netherlands (2)
. And, as the number of routine children’s vaccines
available in industrialized countries has roughly
doubled in 30 years, the competition for capacity is
increasing.
This situation particularly affects
vaccines with extremely low profit margins, such as BCG
and meningitis A/C polysaccharide. For example, Glaxo
SmithKline (GSK) has said that it cannot commit itself
to producing as much meningitis A/C vaccine for next
year as it did for this year, partly because its
freeze-drying capacity has been allocated to the
manufacture of Hib vaccine. "It’s true that both
[vaccines] need to be freeze-dried and you have to
allocate capacity," says Tony Lakavage at GSK. He adds,
however, that ensuring a match between demand and supply
is always difficult with meningitis A/C vaccine, because
epidemics are irregular and unpredictable.
The low prices offered by producers in
developing countries have also reduced the incentive for
manufacturers in high-income countries to make
traditional products, says Walter Vandersmissen at GSK,
citing "gigantic offers from [suppliers in] developing
countries to UNICEF" as one reason for the fall in DTwP
supplies from the industrialized countries. However,
there are other technical reasons for the reduced
availability of DTwP, he says, including changes in
production methods and the increased demand for both
diphtheria and tetanus toxoids for use as components of
the new conjugate vaccines.
Some manufacturers in North America have
actually stopped making products such as DTwP. But
European-based manufacturers have traditionally served a
more global market and say they will continue to do so.
For example, says Michel Greco of Aventis Pasteur in
France, 70% of the vaccine doses made by the company are
destined for developing countries, although these
represent a fraction of overall revenue. Whole-cell DTP,
for example, will continue to be made, not least because
the supply of acellular pertussis is likely to be
limited. "You can manufacture 10 doses of whole-cell
pertussis for every 1 dose of acellular pertussis in the
same facility," says Mr Greco.
Indeed, in Mr Greco’s view, there is no
reason why developing countries should not continue to
use different products from their industrialized
counterparts, provided quality is assured. "Even if
philosophically the dual-track concept is not a pleasant
one, in practice it may be preferable," he argues, given
that many countries cannot afford the higher-priced
vaccines. Products should be chosen case by case, he
says, based on a country’s disease burden, its
resources, and the vaccine’s efficacy and
safety. |
But what is less obvious – and more important in
the long term – is how far these trends will continue, or
whether different patterns will emerge.
The global vaccine market is evolving rapidly
for at least two reasons: first, the rise of new entrants into
the market, in the form of manufacturers in developing
countries whose products are increasingly important for global
supply; and second, new buying power and mechanisms, through
GAVI and the Vaccine Fund, for the low-income countries. These
changes are also happening against a background in which the
requirements of regulatory bodies are becoming increasingly
stringent. So in some respects, today’s "divergence" of
products along two tracks for developing and industrialized
countries reflects the conditions of the past decade, and
events over the next five years may be different. "This
marketplace has changed dramatically," says Tony Lakavage,
senior director of external affairs at Glaxo SmithKline in
Rixensart, Belgium.
First to agree would be the manufacturers in
developing countries, who were once labelled as "local"
producers but who now play a much bigger role. "Manufacturers
such as Bio Farma have actually changed the global supply
picture radically," says Thamrin Poeloengan, president
director of this Indonesian supplier to UNICEF, based in
Bandung.
Immunization Focus sought the views of a
range of producers in developing countries on the direction
that vaccine production is taking. Their responses demonstrate
that they are all highly committed to meeting the health needs
of developing countries, with vaccines against diseases that
primarily affect poorer populations. However, the actual
products they make to meet these needs may change fast. And
the prices they charge may change too. Some of the
developing-country vaccine producers, particularly those who
are public-sector institutions, insist that they will be able
to continue making vaccines at today’s very low prices, taking
advantage of economies of scale. But others say that their
prices may have to rise.
Until now, most developing-country producers
have concentrated on making traditional vaccines such as DTwP
and measles and also, recently, monovalent hepatitis B
vaccine. For most low-income countries, the high prevalence of
childhood disease and a lack of resources make the traditional
vaccines the most appropriate response, they argue. Take, for
example, DTwP – an order of magnitude less costly than DTaP.
In Brazil, says Isaias Raw, president of the Sao-Paulo based
producer Instituto Butantan, "Adopting aP would represent
going from cents to many dollars [per dose], and would result
in a decrease in vaccination."
But it would be a serious misjudgment to think
that the developing-country manufacturers are restricting
themselves to the "old" vaccines. Some, such as Bharat Biotech
and Shantha Biotechnics, both of Hyderabad, India, are already
developing combination vaccines such as DTP-HepB, for which
the emergence of GAVI and the Vaccine Fund has sharply
increased demand. In some cases, says Susan McKinney at WHO,
combinations are being achieved by different
developing-country producers collaborating and "marrying"
components. "These producers are on a fairly fast track to
providing a DTP-HepB combination," says Ms McKinney.
Expensive kit: vaccine production
is capital-intensive |
Another mistake would be to assume that the
developing-country producers will make products only for
developing countries. As well as these, says Krishna Ella of
Bharat Biotech, "We also see ourselves as contract
manufacturers for vaccines and other biologicals for the
industrialized countries." Indeed, a few manufacturers in
developing countries are considering developing vaccines that
may appeal to industrialized and developing countries equally
– such as meningitis conjugates or rotavirus.
Equally, it would be simplistic to assume that
developing countries will never want the products that have
replaced traditional vaccines in most of the industrialized
countries. Varaprasad Reddy, managing director of Shantha, is
just one of the producers who believes that populations in at
least some emerging and middle-income countries will gradually
shift their demand as income increases and disease burden
changes. Dr Ella at Bharat Biotech agrees.
In the short term, however, a more pressing
issue issue is whether the developing-country producers’
prices will rise. Traditionally, these manufacturers have
offered their products to UNICEF at very low prices – even
lower than the concessionary prices charged on sales to UNICEF
by the industrialized-country manufacturers. But this
situation may not be sustainable. As developing-country
manufacturers improve their production facilities to meet the
increasingly stringent regulatory requirements for
international sales, their production costs are rising.
Whoever makes the traditional vaccines, it seems that they
cannot remain as cheap as they have been.
Modern vaccine production requires massive
capital investment, but once the plant is up and running the
number of personnel needed is small. So the savings on labour
costs that can be made in developing countries by other
industries, such as clothing or software production, do not
apply to vaccine producers. Producers that have traditionally
charged very low prices may have to raise them if they are
going to invest in modernizing equipment.
Companies in the industrialized countries,
meanwhile, have historically been prepared to sell vaccines
for use in developing countries at reduced prices because they
make more money on sales of the same products in the
industrialized countries. But, obviously, if few in the
industrialized countries want to buy these same products, the
options for offering them at these "tiered" prices in the
developing-country markets may diminish. For David Salisbury,
head of the immunization and infectious diseases group in the
UK government’s Department of Health (see Box
2 ), this is a major problem for the world as a whole. It
is implausible, he believes, that the major manufacturers will
continue to offer vaccines at reduced prices for developing
countries if they can no longer get the higher prices they
need from the industrialized country markets to make their
products profitable.
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2: Not every
industrialized country wants to ditch the "old"
vaccines
For David Salisbury, head of the
immunization and infectious diseases group in the UK
government’s Department of Health, the falling supply of
certain "traditional" vaccines is a major problem. In
his view, it has become a seller’s market. "We find it
difficult because you cannot say to a manufacturer,
'This is which vaccine we want' – and we are the
customer."
In the UK, children are still immunized
with DTwP because, Dr Salisbury says, trials have shown
that the whole-cell vaccine protected 85% to 90% of
children, whereas acellular products’ efficacy ranged
from 70% to 85%. Despite other vaccine safety "scares",
British parents today generally find DTwP acceptable,
says Dr Salisbury, and immunization rates with the
vaccine remain high. "Why would we change to a less
efficacious vaccine at higher cost?" he asks. Yet,
because of supply problems with whole-cell vaccine,
Britain recently had to use the acellular product for a
period.
British children are also given oral polio
vaccine when many other industrialized countries have
shifted to inactivated vaccine to avoid the risk of
vaccine-associated outbreaks. The country’s historical
links with the Indian subcontinent and some West African
states, where polio remains endemic, mean that there is
constant and large-scale traffic between Britain and
these regions, and this raises the risks of wild-type
virus entering the country. "We constantly review and
review this policy," says Dr Salisbury. When polio
transmission stops in these regions, the balance of risk
and benefit will change, and the switch to IPV will be
made, says Dr Salisbury. |
Companies such as Aventis Pasteur and GSK have
said they will keep tiered pricing – for now. "We are
committed to tiered pricing as long as we have protected
pricing in Europe and the United States," says Lakavage. "That
is our stated public position. But what happens in the
developed world does have an impact on what happens in the
developing world."
In circumstances as uncertain as today’s market,
then, what can anyone do to ensure that high-quality,
appropriately priced vaccines keep flowing to meet the needs
of developing countries? In the end, says Dr Milstien at WHO,
it’s vital that manufacturers from both the industrialized and
the developing countries stay in the market to assure a range
of products and continued investment in R&D. And that
means keeping the incentives for both to stay.
In the medium term, the emergence of GAVI and
the Vaccine Fund may be improving the incentives to
manufacturers – at least for some vaccines. Companies’
decisions about whether or not to develop products for
developing countries are based, says Lakavage at GSK, on "an
assessment of what the purchasing entities can and will buy".
With GAVI and the VaccineFund catalysing changes in the
market, he says, "there are more resources for purchase, and
improvements in the infrastructure to deliver the vaccines".
Demand for vaccines is also becoming easier to foresee with
work done by the GAVI Financing Task Force’s subgroups on
forecasting and procurement, together with the new purchasing
arrangements that UNICEF is now adopting for new and
under-used vaccines paid for by the Vaccine Fund. And in the
longer term, as tougher regulatory demands drive costs up,
both producers and buyers in a global market will need to be
willing to invest more in products whose value the world has
taken too much for granted. The next few years will be
critical.
References:
(1) Divergence of products for
public sector immunization programmes. Milstien, Julie, S.
Glass, A. Batson, M. Greco and J. Berger. Presentation to the
Strategic Advisory Group of Experts of WHO’s Department of
Vaccines and Biologicals, Montreux, 15 June 2001. Powerpoint
presentation
(2) Roberfroid, A. presentation
to the GAVI Partners’ Meeting, Noordwijk, the Netherlands,
November 2000 Powerpoint
presentation
Phyllida Brown
Immunization Focus June 2001 - Contents |
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