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2001 contents page
Global market global vaccines?
Vaccines for developing and industrialized
regions have been diverging, but todays global market is changing
rapidly. Phyllida Brown asks manufacturers and others what the future
IT hasnt 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 todays 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 studys authors. And, in some cases, prices that
had remained stable for years are creeping up.
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 years GAVI Partners Meeting in Noordwijk,
the Netherlands(2). And, as the number
of routine childrens 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. "Its 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
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
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 Grecos 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 countrys disease burden,
its resources, and the vaccines efficacy and safety.
1: Availability of three "traditional" vaccines supplied to
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, todays "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,
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 todays 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
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 governments 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.
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
governments Department of Health, the falling supply of certain
"traditional" vaccines is a major problem. In his view, it
has become a sellers 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 countrys 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 todays
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, its 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 Vaccine
Fund 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 Forces
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.
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 WHOs Department of
Vaccines and Biologicals, Montreux, 15 June 2001. www.VaccineAlliance.org/reference/ppt/sage136.ppt
(2) Roberfroid, A.
presentation to the GAVI Partners Meeting, Noordwijk, the Netherlands,
November 2000 www.VaccineAlliance.org/reference/ppt/roberfroid.ppt
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