Global Vaccine R&D pipeline and potential challengers to current market

The current vaccine market is dominated by Big Pharma (see my post). However, the dynamic development in vaccine R&D could change this landscape in the near future. The following table provides an overview of the potential challengers to the current market leaders, in six main categories of vaccines:

Overview of Global R&D pipeline

Pediatric vaccines account for more than 40% of all disclosed vaccine R&D, and for the majority of all vaccine projects conducted by manufacturers in emerging countries. Such attention is caused by both the market size of this category, which according to the projections will reach $100Bln globally by 2025, and by the aggressive vaccination efforts of GAVI alliance, who drives demand and buys more than 50% of pediatric vaccines worldwide. GAVI global vaccination targets gives a guaranteed long-term demand with a preference for developing countries' manufacturers and new vaccines. This leads to a situation in which main developing countries manufacturers are trying to enter the main pediatric disease areas, and existing Big Pharma tries to maintain its market share by proposing improved vaccines in the same disease categories. Competition is even fiercer with the new "technology transfer" initiative from Big Pharma to developing countries. 

Three UN Millennium Goal diseases - HIV, Malaria and Tuberculosis - remain scientific challenges with promises of glory and wealth. They attract both Big Pharma, small start-ups and research institutions from all countries. With most of the projects in these areas still in the proof-of-concept stage, we are seeing more and more players progressing to more advanced stages, with even one HIV project at Phase III from Finnish FIT Biotechnologies.

With the growth of purchasing power in Asian and Latin American countries, more companies are turning their heads towards tropical diseases. It is particularly exciting to see progress for diseases with no current vaccines at all. For instance, Sanofi is expecting to launch the first ever Dengue fever vaccine, and Crucell is aiming at the Ebola virus.

The market success of HPV, although mostly driven by cancer concerns, has probably contributed to the explosion of interest in the area of sexually transmitted diseases (STD), with Genoceas aiming to become a pioneer in chlamydia and herpes simplex vaccines. 

Finally, it is interesting to observe the R&D effort coming from emerging countries: Chinese companies (Chengdu Institute, 3SBion, Sinovac) and Indian companies (Serum Institute and Bharat) are focusing on replacing Big Pharma vaccines in their local markets. And Instituto Finlay from Cuba wants to break-through in the most scientifically challenging areas (malaria, tuberculosis, hepatitis), while Brazilian, Indonesian and Mexican players prefer to rely on technology transfer programmes.


ps: the table above does not mention therapeutical cancer and influenza vaccines because there are an important and particular areas which should be treated separately.

Global Vaccine Market: Main Players and Questions of Price

Today I start a series of posts dedicated to the commercial aspects of the UN drug market; that is, the companies who produce and develop drugs and other medical substances that are essential for health development and relief programs. I will start by focusing on the areas that are currently declared by the UN (WHO, UNICEF) as main priority areas: malaria, HIV, maternal and infant health programs.

Although I acknowledge that there is a lot of debate about why the UN has decided to include precisely these ones into its Millennium Goals, for the moment I prefer to use them as the starting point of my research. Later, I plan to write a similar post on non-communicative diseases and emergency medications.

The current post is a short overview of the global vaccine market. Here I would like to share a table which shows the vaccine product mix of the top 5 global vaccine producers. It is no surprise that these are 5 of the biggest pharmaceutical companies - Sanofi, Merck, GSK, Pfizer and Novartis - whose cumulated proceeds from vaccine sales in 2012 exceeded $21 Bln, accounting for 80% of the global vaccines market. 

Around 7.5% of this revenue accounts for the so called UN Market (vaccines purchased for WHO and UNICEF programs) through governmental and institutional funding (including big NGOs such as Bill and Melinda Gates foundation), which means that these companies received around $1.5 Bln from development funds. However, if we look at dose volumes, the UN Market accounts for more than 50% of EPI vaccines produced (WHO Expanded Program of Immunization BCG, diphtheria-tetanus-pertussis (DPT), oral polio, and measles for all and Hepatitis B (HepB), yellow fever and Haemophilus influenza meningitis (Hib) for some countries). 

Top 5 Vaccine Producers and their product mix

The difference in pricing for industrialized countries and UN projects (for vaccines these prices are negotiated by the GAVI alliance) can reach up to 99%, like in the case of Prevnar 13, which is priced at $150 in the USA and supplied by $3.5 to GAVI (source: GAVI).

What do these figures mean for vaccine manufacturers and for consumers? For instance, does it mean that consumers in wealthy countries, who contribute 80% of vaccine revenue, are de facto subsidising these UN development programs? If yes, can this fact be better communicated and used for marketing purposes both by governments (who are the main customers in most countries) and by the drug companies, who try to maximize prices? Should these numbers by taken into consideration when calculating the indirect contributions of the wealthy nations to these development programs? How does this impact economic development models? 

I will try to dig deeper into these subjects in the following posts, but above is the promised table.