With the resurgence of Ebola in Africa—this time with a swift vaccine response—and other emerging threats such as MERS or Zika, there continues to be a demonstrable interest in the prosperity of the global vaccines business to address these outbreaks. The global vaccine marketplace has seen considerable change over the last decade as we have seen many challenges rise and fall regarding regulatory pathways and emerging technologies. Industry leaders gathered Tuesday afternoon at the 2018 BIO International Convention to discuss these issues facing the global vaccine business at the opening session of the Infectious Diseases & Vaccines Track entitled, “The Global Vaccines Business: A View from the Top”.
The panel was moderated by Dr. Jacqueline Keith, MA, PhD, President at J Keith Consulting Corp. Panelists represented a wide array of industry leaders: Michael Nally, President at Merck Vaccines, Gordon Naylor, President at Seqirus, Dr. Rajeev Venkayya, MD, President of Global Vaccine Business Unit at Takeda Pharmaceuticals, David Loew, Executive Vice President and Head of Global Commercial Operations at Sanofi Pasteur, and Stanley Erck, President and CEO of Novavax.
The future of the global vaccine business will include opportunities and challenges—from helping drive access in middle-income countries to the industry’s role in addressing vaccine hesitancy—facing vaccine developers and manufacturers, and the importance of continued vaccines innovation. Panelists expressed concern about business challenges for the vaccines industry, such as misguided public perceptions, long-term government commitments, non-state actor leadership, private capital funding, and education of stakeholders on the value of vaccines. Dr. Venkayya summed up the education challenge well with a quote from a colleague who said, ‘Nobody ever thanks you for protecting you against a disease they never thought they would get’, and then noting that “this [demonstrates] the power of vaccines constantly working in the background to protect people.” Nally noted that we must be focused to have an impact, but focus tends to wax and wane as the threat changes from disease to disease, place to place.
A common thread among panelists was the enormous progress that we have made over the past decade and how the vaccines sector provides an immediate public good to millions globally. There are exciting new advances in platform technologies for pandemic influenza such as recombinant manufacturing, nucleic acids and adjuvants, which can more easily be rapidly produced and stockpiled. The emergence of these technologies are being bolstered by the growing roles of non-state actors as well as public-private partnerships such as BARDA, CEPI and Gavi.
The business model for vaccines has long been a challenge as a viable commercial venture. The hurdles include manufacturing capacity, regulatory frameworks, reimbursement data barriers, venture funding and understanding value. Dr. Keith noted that demand certainty is so important for the vaccines business, as with Ebola, Gavi provided an advanced purchase agreement, establishing a market—to avoid a market failure—that would not otherwise exist. The panel harped on this as a success and that push-pull incentives are the way forward via public-private partnerships, but that longer terms are needed as 2-3-year commitments is not sustainable. To be ready for the next outbreak, companies must make hard choices regarding finite resources in their pipeline as the choice to develop a vaccine candidate means that there is an opportunity cost for another product in the pipeline.
The value of vaccines plays out over a longer period than most other drugs, as the patent life is much longer due to economic hurdles—i.e. large-scale trials—for competition. For comparison, there is much longer asset life for a vaccine while durability is low in immuno oncology because any given company is often only one trial away from having a competitor. Once a vaccine product has been demonstrated to be safe and effective, patent protection is a lesser concern for the business, and this drives down long-term costs dramatically.
The return on investment (ROI) on vaccines for society writ-large is far better than any other intervention in the health system, and payers, governments and international organizations are beginning to realize that. The positive path forward for the industry is to focus on the patent life of the vaccine product versus the short-term margin on which most of the biopharmaceutical industry hinges. The global vaccines business has taken incredible strides but still has a long road ahead before we have sustainable vaccine development.
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