Chiron Vaccines Feedback on Financing Vaccines for the 21st Century

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Chiron Vaccines Feedback on Financing Vaccines
for the 21st Century

• Clement Lewin
• VP Govt. Affairs Immunization Policy
• June, 2004

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Currently, under the right circumstances
companies will invest in the US vaccine market

• Case study Chirons investment of 800 million
  in the US influenza vaccine market
• Market size Growth Potential
• 80 million people immunized and vaccination
  recommended for 185 million people
• A commitment to achieving Healthy People 2010
  goals
• Public / Private partnerships in place to
  increase coverage rates
• The right financing conditions
• Reimbursement levels not a barrier to
  immunization
• Existing pricing levels justify long-term
  investment
• Capital investment in production capacity to meet
  demand
• Research and development investment for next
  generation products

Financing was only one of the factors impacting
Chirons decision
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Chiron commends the report highlighting issues
with the current system

• Low coverage rates in adolescents and adults
  compared to children
• Delays in funding coverage for newly recommended
  vaccines
• The negative impact on supply of statutory price
  caps imposed at the time VFC was enacted

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However, the successes of the current system are
not emphasized

• Immunization coverage rates have reached
  unprecedented levels in children
• Progress in reducing geographic and
  socio-economic disparities
• New vaccines have been added to the immunization
  schedule
• Varicella, Hepatitis A, Pneumoconjugate
• The majority of children have access to new
  vaccines
• Single tiered system as opposed to two-tiered
  system
• More children are being vaccinated in their
  medical home

Current system has reduced the burden of vaccine
preventable disease in children
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Will the IOM proposals assure access to vaccines
or sustain their future availability?

• Impact of non-price factors on vaccine supply and
  coverage
• Perceptions of value of vaccines
• Increasing regulatory burden
• Implementation of the voucher system
• Will replacing the system with a government
  subsidy and voucher plan improve immunization
  rates?
• Can such a program be administered efficiently?
• Pricing based on a calculation of societal
  benefit
• Will additional risks to vaccine development be
  created by an inability to project price?
• Will calculation of the societal benefit of
  vaccines could turn into a black hole?
• Will calculation turn into a price cap?

Ir is unclear whether the proposal is workable or
will be better than the current system
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Increasing Requirement for Pre-Licensure Data
PedvaxHIB 6,000
Recombivax HB 1,200
1980
2010
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Will the IOM proposals assure access to vaccines
or sustain their future availability?

• Impact of non-price factors on vaccine supply and
  coverage
• Perceptions of value of vaccines
• Increasing regulatory burden
• Implementation of the voucher system
• Will replacing the system with a government
  subsidy and voucher plan improve immunization
  rates?
• Can such a program be administered efficiently?
• Pricing based on a calculation of societal
  benefit
• Will additional risks to vaccine development be
  created by an inability to project price?
• Will calculation of the societal benefit of
  vaccines could turn into a black hole?
• Will calculation turn into a price cap?

Ir is unclear whether the proposal is workable or
will be better than the current system
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Conclusions

• Incentives for vaccine development at Chiron are
  not increased by a system of subsidies, mandates
  and vouchers
• Lack of clarity on methodology implementation
  mechanisms
• Societal benefit calculation may create de-facto
  price cap
• Providing financing will not necessarily lead to
  increased coverage rates in adults and
  adolescents
• Need to learn from experience in children
• Incremental improvements to the current system
  should be considered
• Increasing 317 Funding or expanding VFC coverage
  to the underinsured
• Increasing provider choice of vaccines
• Removing price caps for older vaccines
• Improving adolescent and adult immunization
  infrastructure

Not clear that this dramatic shift is required or
desirable