VACCINES: TECHNOLOGY TRANSFER TO THE DEVELOPING WORLD

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VACCINES TECHNOLOGY TRANSFER TO THE DEVELOPING
WORLD

• John H. Barton
• Professor Emeritus, Stanford Law School
• Former Visiting Scholar, NIH Department of
  Clinical Bioethics

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• THIS IS A WORK-IN-PROGRESS PLEASE CRITICIZE,
  ADVISE, CORRECT, AND SUGGEST, AS NEEDED!
• I speak purely for myself and not for Stanford or
  NIH.

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VACCINE TECHNOLOGY TRANSFER STUDY

• Why technology transfer?
• Technology as engine of growth and science
• Transfer as affecting access to products for
  local and global markets
• Variety of modes changing over time
• Severe restrictions under current international
  economic law
• Why vaccines?
• Crucial medical intervention
• Reasonably separable area (and very different
  history from pharmaceuticals)
• Interest

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VACCINE TECHNOLOGY TRANSFER OUTLINE

• Heroic era (1891 gt 1930s)
• National public health Growth and divergence
  (193Os gt1990s)
• Global vaccination programs (1960s gt 2000s)
• Era of privatization and biotechnology (1990 gt

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I - HEROIC ERA

• Smallpox
• Arm-to-arm vaccination prehistory
• Jenner 1798
• Brazil 1887 (predecessor of Butantan)
• Rabies and Pasteur Institutes
• Pasteur - 1885
• Pasteur Institutes
• Dakar 1896
• Saigon 1891
• Now a network of 29 institutes, including 22 in
  developing nations
• Researchers trained at Institut Pasteur
• Haffkine (Bombay) 1899
• Oswaldo Cruz (Rio) 1900

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NEW VACCINES IN THE HEROIC DAYS

• Typhoid (1896) Wright (England) and others
  trials in India
• Cholera (1896) Haffkine, Delhi Calcutta
• Plague (1897) Haffkine, Hongkong?
• Diphtheria (1923) Ramon (France) (antitoxin
  earlier)
• TB (BCG) (1927) France, but based partly on
  work in Saigon
• Tetanus (1927) Ramon (France)
• Pertussis (1933) Denmark US
• Yellow fever (1935) RF (Lagos New York)
  Pasteur (Dakar) trials in Brazil

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DYNAMICS OF HEROIC ERA

• Scientists had to go where the disease was
  (Arrowsmith syndrome)
• Colonial policy (mission civilisatrice, every
  colony should have its Institut Pasteur)
• Public health interest in more sophisticated
  developing nations (Brazil)

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THE TECHNOLOGY IN THE HEROIC DAYS

• Production involved small institutes doing both
  research and production (technology based on
  animal and flask culture)
• Technology acquired through personal study
  (Institut Pasteur)

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SMALLPOX VACCINE PRODUCTION OSWALDO CRUZ
EARLY 20TH CENTURY
Fernandes 2004
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II - GROWTH AND DIVERGENCEDURING THE MID 20TH
CENTURY

• New vaccines
• New technologies
• New regulations

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NEW VACCINES

• Polio (Salk Sabin)
• Measles
• Mumps
• Hepatitis B
• Meningococcus
• Haemophilus influenza
• Combinations

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New technologies

• Culture on chick embryos (Goodpasture, Walter
  Reed, 1931)
• Tissue culture (Enders, 1949)
• Biotechnological production of specific antigens
  (1980s)
• Conjugate vaccines (1980s)
• Plus improved separation methods and improved
  assays

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NEW REGULATORY STANDARDS

• Jim and Biologicals Act 1902
• Cutter incident 1955 led to creation of
  Division of Biologics Standards in NIH, now in
  FDA
• GMP and management of input materials 1963 and
  1976
• Management of air pressure 1978/87?
• Documentation and Team Biologics --1990s

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MEANWHILE, BACK IN THE DEVELOPING WORLD

• World War II
• Independence and conversion of colonial public
  health systems into national ones, often fighting
  for limited resources (later on with IMF and
  World Bank pressures on health budgets)
• Lack of major scientific research programs
  comparable to those of the developed world (until
  Brazil, China, India in about 1980s)

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THE BASIC PATTERN

• Many small scale producers (WHO found 74 rabies
  vaccine producers in 1984, many still using live
  animals)
• Frequent GMP problems
• Did not make most advanced vaccines
• OPV, not IPV, partly because of WHO pressure
• Whole-cell pertussis, not acellular
• Brazil as major exception

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Brazil 1943Probably making yellow fever
vaccine at Oswaldo Cruz
Lacerda and Mello (2003)
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THE RESULTAPPROXIMATE STATISTICSDTP COVERAGE -
1980

• Industrialized countries 60
• Latin America 38
• South Asia 5
• East Asia 5
• MidEast 25
• Sub-Sahara Africa 5
• Hadler et al, Vaccination Programs in Developing
  Countries in Plotkin Orenstien, Vaccines

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TECHNOLOGY TRANSFER DURING THE MID AND LATE-20TH
CENTURY

• Early on probably through personal contact,
  international meetings, and perhaps international
  education among scientists
• Later in period serious donor efforts
• RIVM Vacsera (1980s)
• CIDA, Connaught, UNICEF, AID Pakistan (1981 and
  1984)
• Statens Serum Institut Razi (1985)
• Canada plus Oswaldo Cruz Nigeria (1986)
• Netherlands, Japan Bio Farma (1991 1992)
• World Bank China (mid 1990s)

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III - NEW ERA OF GLOBAL PROGRAMS

• Eradication campaigns
• PAHO smallpox 1950-67
• WHO - Global smallpox 1967-77
• WHO - Polio 1985-200?
• EPI 1974
• CVI 1990
• GAVI 2000
• Emergence of UNICEF/Rotary purchase system with
  tiered pricing

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PROCUREMENT FOR THE GLOBAL PROGRAMS

• Smallpox (1960-77) encourage local procurement
  (smallpox animal technology) developing nations
  supplied at least 80 of own needs
• Polio (1985-200?) at first entirely
  developed-nation procurement, some
  developing-world manufacturers by the 1990s

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EPI PROCUREMENT

• EPI created in 1974.
• Latin American Revolving Fund 1979 - supported
  by national health ministries.
• UNICEF procurement system (1978?) supported by
  donors, including Rotary and now Gates with
  PAHO, now purchases roughly 70 (by dose) of
  worlds childhood vaccine near marginal cost.

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MORE ON THE 1990s REVOLUTION IN PROCUREMENT

• EPI/UNICEF initially purchased from developed
  nations but faced severe shortages and high
  prices as suppliers merged and reached capacity
  limits during 1990s.
• 10 of 14 developed-world manufacturers partially
  or totally stopped production of traditional
  vaccines during 1998-2001 (UNICEF).
• CVI study of quality and development of matrix in
  1993-94.
• WHO developed a prequalification system
  1989(?).
• Now UNICEF buys more than 2/3 of its non-OPV
  vaccines from major developing-nation
  manufacturers and small developing-nation
  manufacturers discouraged

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IV - CONTEMPORARY ERA

• Patents and intellectual property
• TRIPS, stronger developed-world systems
• Biotechnology
• Heavy private sector role in developed world,
  with important public components, especially in
  vaccines
• Privatization emergence of private sector
  developing-world industry
• Political and economic thrust throughout world

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Fiocruz Facility - 2001
http//www.pharmaceutical-technology.com/projects/
fiocruz/
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ECONOMICS OF DEVELOPED-WORLD VACCINE INDUSTRY

• In addition to development cost, very substantial
  manufacturing fixed cost and difficulty in
  changing due to regulation
• Relatively low markup opportunity for mass-use
  childhood vaccines
• Patent-based product exclusivity relatively rare,
  except on newer vaccines and not generally on
  mass-use childrens vaccines

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PATENT ROLES

• Barriers to entry generally based less on patents
  than on regulatory costs and economies of scale
• But patents used on components (adjuvants,
  particular molecules, and processes)
• Vaccine industry therefore does have to cover
  royalty costs for intermediates

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VACCINE PATENT LITIGATION RECENT CASES

• Boehringer Ingelheim Vetmedica v. Schering Plough
  (CAFC 2003) process for growing and isolating
  virus
• Medeva Pharma Ltd. v. Am. Home Prods. (2001)
  method of detecting pertussis antigen 
• Embrex v. Service Engineering (CAFC 2000)
  method of injecting vaccine into egg
• Evans Medical v. American Cyanamid (CAFC 1999)
  pertussis antigen and vaccine based on it
  (parallel litigation in Europe)
• Connaught v. SKB (CAGC 1999) purification of
  pertactin

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BIOTECHNOLOGY AND PPPs

• Developed world biotechnology based on NIH,
  biotech startups, and license to Pharma
• For developing world - PPPs
• Especially HIV, malaria, TB
• Public/private partnerships
• Virtual development model
• Most of research (except clinical trials) in
  developed world
• These groups must be concerned about research
  tool patents, at least insofar as they do
  research in developed world
• Patents generally a less serious issue for
  developing world firms (for traditional childhood
  vaccines) but access to trade secret data may
  be harder!

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PRIVATIZATION

• Political fiscal reasons
• Economic reasons higher salaries and greater
  management flexibility
• Examples
• VACSERA (Egypt) 1973 and 2002
• BioFarma (Indonesia) 1997

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OTHER MOTIVES FOR CREATING DEVELOPING NATION
MANUFACTURERS

• Vision of biotechnology as a technology of the
  future
• Indian Department of Biotechnology
• Cuban CIGB
• Private sector
• Serum Institute of India 1966
• Shantha 1990
• Bharat 1996 (created by Krishna Ella, U of Wis.)

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DEVELOPING NATION MANUFACTURERS IN TODAYS WORLD

• Acquisition by UNICEF favors Europe and several
  developing-nation manufacturers and UNICEF is
  the key international market for the
  developing-world firms
• There are now many developing-world manufacturers
  (20 in DCVMN), of whom 12 have met WHO
  prequalification standards

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THE CURRENT DEVELOPING WORLD SUPPLIERS TO UNICEF
AND THEIR TECHNOLOGY SOURCES

• BioFarma (Indonesia, OPV, DPT)
• Dutch Japanese governments
• Fiocruz/Biomanguinhos (Brazil, YF)
• 1980-83, 2000 Assistance from Japan
• 1999, 2003 Alliances with GSK
• Institut Pasteur (Dakar, YF)
• Long term French input
• Serum Institute of India (worlds largest
  producer of measles and DTP, 5th largest vaccine
  firm)
• 1996 alliance with SKB
• 200? NIH, PATH, WHO license for Meningococcal
  vaccine also RIVM on Hib technology
• Shantha Biotechnics (India, OPV, Hepatitis B)
• Collaboration with Indian research laboratories
  and support from Oman

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SOME OTHER MAJOR DEVELOPING WORLD PRODUCERS

• Butantan (Brazil)
• China (Chengdu, Lanzhou, Shanghai, Shenzen)
• CIGB (Cuba) (WHO prequalified)
• Instituto Finlay (Cuba, 6 vaccines)
• Bharat (India) (NIH licensee on rotavirus
  vaccine, grants from Gates)

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EXAMPLES OF OTHER CONTEMPORARY TECHNOLOGY
TRANSFER PROGRAMS

• Merck license to China (1989)
• University of Ottawa Cuba
• Chiron-Behring joint venture to manufacture
  rabies vaccine in Gujurat (facility in 1991,
  venture in 1998
• WHO and DCVMN (2001) (NIH is a member)

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BEGINNINGS OF GLOBALIZATION? (E.G.
DEVELOPING-NATION SUPPLY TO DEVELOPED-WORLD)

• GSK Cuba license to use Cuban meningitis B
  technology 1999
• Berna Biotech (Swiss) purchase of GreenCross
  (Korea) 2002
• Wyeth Bharat manufacture HiB on license -
  2003

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VACCINE TECHNOLOGY TRANSFER SUMMARY CHART
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REFLECTIONS TECHNOLOGY TRANSFER PATTERN

• Phase I (for vaccines, pre 1930) artisan-level
  technology, easily copied
• Phase II (for vaccines, 1930-1995) growth of
  many producers at local level, restricted by
  access to capital rather than to technology
• Phase III (1995-20??) globalization and
  integration, controlled by market structure,
  regulation, economies of scale in research and
  production
• Note that all this depends on
• The possible scale for the initial technology
  transfer
• The timing of the spread compared with global
  political events such as the current moves to
  free trade and intellectual property

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REFLECTIONS AND PENDING ISSUES FOR VACCINES - I

• How long will the global donor market be there?
• Recent dependence on Gates
• Possibility of donor fatigue were now in a
  global version of the public health mode
• Procurement policy?
• Relevance of growing private market in India (and
  possibly elsewhere)?
• The PPPs
• What likelihood of success?
• What roles for DC or LDC manufacturers?
• Continued support for procurement as the number
  of products grows (c.f. problems of integrating
  Hepatitis B into the EPI package)?
• Bioterrorism
• Suspicions of Iran and Cuba
• Visas
• Export limitations
• New development models in the U.S.

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REFLECTIONS AND PENDING ISSUES FOR VACCINES - II

• Strategic licenses between developed and
  developing nation firms
• Mechanism of technology transfer for serving LDC
  market what incentives for each side? Role in
  access?
• Possibility of future off-shore production?
  importance of labor costs? Feasibility of
  maintaining quality standards? Trends in
  economies of scale? Trends in integration?
• Consolidation on a global scale?
• Economic or research motivations?
• Regulation, patents, and access to developed
  world markets?
• Choice of markets by developing-country
  manufacturers?

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QUESTIONS, CRITICISMS, AND SUGGESTIONS?

• Thank you!
• jbarton_at_stanford.edu