The Environment Facing US Vaccine Manufacturers

1
The Environment Facing US Vaccine Manufacturers

• Ronan W. Gannon
• Executive Director, US Marketing
• GlaxoSmithKlline

2
We think that the vaccine future could be bright

• We are in the business of preventing disease and
  saving lives and we are proud of our
  contribution.
• We will continue to deliver unprecedented
  technologies to prevent serious diseases.
• Science is opening vaccine possibilities that
  have been inconceivable the business environment
  poses barriers to their realization.
• The US federal government can help by reducing
  barriers.

3
US Vaccine businesses operate in a challenging
and often unfriendly environment from legal,
regulatory and economic perspectives

• Many agree, including manufacturers, that the low
  incidence of vaccine-preventable disease means
  that the system is working pretty well.
• The vaccine industry is important, but must
  compete for investment dollars with general
  pharmaceuticals.
• The vaccine business is expensive, risky and with
  a smaller market than pharmaceuticals.
• Marketing vaccines can be uncertain with
  significant risk.

4
Vaccines are important, but vaccine sales are
dwarfed by prescription sales
Billions
243
250
Vaccine Sales
Pharmaceutical
Sales
2
2
2
2003 Sales
Source Vaccine sales estimated by American
Public Health Association
Pharmaceutical sales estimated by Business
Communications Company
5
There are not many Vaccine manufacturers in the
US
In contrast, there were 25 manufacturers in 1988.
Aventis ('Theta' report),Merck('Theta' report,
est of 1000 global,55 US from 2003 annual
report), Wyeth ('Theta' report, est. of800
global, est. 60 US from 2003 annual report),
Chiron (est 60 of 357 is US)
6
The vaccine business faces significant challenges

• Difficult and expensive to invent, develop and
  manufacture vaccines.
• Demand for certain vaccines can be variable and
  unpredictable.
• By nature, perishable vaccines and numerous
  ship-to locations makes a complicated
  distribution system.
• Ample programs to encourage the immunization of
  children but few focus on adolescents and
  adults.
• Litigation continues to threaten viability of
  vaccine industry.

7
Development means long lead times and big
investment before we actually know we have a
working product.
Identify Antigens
Produce Antigens
Test in Animals
Proof of Concept
Phase I
III
File
Registration
II
Research (Inc. Immunology)
Preclinical Development (Inc. Formulation Science)
Clinical Development (Inc Post Marketing
Surveillance
Transfer Process to Manufacturing
Build Facility
x
x
x
3-5 yrs
2-3yrs 2-4 yrs 1 yr
Have to build facility before you know you have a
product
8
It can take a year to manufacture a single lot of
a vaccine

• Complex biological process
• Example of vaccine production process
• Event Time Frame1. Cell Culture weeks
• 2. Multi-stage fermentation weeks
• 3. Multiple purification/ weeks
  concentration
• 4. Inactivation/sterilization weeks
• 5. Test bulk material 1 - 3 months
• 6. Formulation days
• 7. Filling days
• 8. release testing 2-3 months
• 9. FDA Certification 2-3months

9
The regulatory environment is also challenging

• The regulatory complexity for vaccines is higher
  than for drugs
• In addition to product approval, complex process
  and plant approvals, lot-by lot approval and
  release.
• Quality standards in the US are similar to those
  abroad. However, the validation of those
  standards is more complex in the US.
• This contributes significantly to the cost for
  market entry of vaccines to the US market

10

• Lack of harmonization for product requirements
  reduces the ability to resolve rapidly vaccine
  shortages which arise in the markets.
• Issues that are of concern
• Limited FDA resources in the CBER division
• Rigid interpretations of FDA technical
  guidelines.
• Higher hurdles for vaccine licensure in the US

11
Risks associated with developing and
manufacturing vaccines are amplified by
unpredictable influences on demand

• In addition to the uncertainty of FDA approval,
  ACIP recommendations have a strong influence on
  vaccine uptake.
• Federal, State and local budget cycles and
  government inventory systems lead to erratic
  purchase patterns.

12
Legal liability is an ongoing concern

• Vaccine manufacturers continue to be sued in
  vaccine-related lawsuits.
• The current Vaccine Injury Compensation Program
  has largely achieved its laudable goals, but must
  be improved and strengthened to continue to
  achieve those goals.
• Litigation continues to threaten the viability of
  the vaccine industry.

13
Distribution and infrastructure challenges are
unavoidable

• Vaccine Distribution complex due to stability
  requirements of the products
• temperature and time parameters
• Manual ordering processes for individual
  physicians lead to more labor intensive service.

14
Significant support for pediatric immunization,
little or no support for adolescent and adult
immunization

• VFC and 317 programs emphasize childhood
  immunizations.
• State and local infrastructures encourage
  childhood immunizations.
• The lack of programs to encourage adult and
  adolescent immunization may cause low vaccination
  rates and increase manufacturer risk in
  developing vaccines targeted at these groups.
• The public infrastructures are important to
  encourage immunization, but the public prices for
  vaccines can be a challenge.

15
What we need to ensure a bright vaccine future

• Balance of public and private market to reduce
  the risk associated with a single major
  purchaser.
• Public sector cost for vaccine should not be
  artificially low
• Broader realization of the complexities of the
  vaccine development, manufacturing and
  distribution processes.
• Continued, responsible harmonization of our
  regulatory environment for product development
  and manufacturing.
• Adult and adolescent infrastructure.
• Amending and strengthening the Vaccine Injury
  Compensation Program through legislation to
  preserve the program and achieve its objectives.