# Presentation: 524420

## The Environment Facing US Vaccine Manufacturers

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

## 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.

## 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.

## Vaccines are important, but vaccine sales are dwarfed by prescription sales

- $ Billions

- 250

- 2

**243**

**2**

**2003 Sales**

**Vaccine Sales**

**Pharmaceutical**

**Sales**

**2**

*Source: Vaccine sales estimated by American Public Health Association*
*             **Pharmaceutical sales estimated by Business Communications Company*

## There are not many Vaccine manufacturers in the US  

*Aventis ('Theta' report),Merck('Theta' report, est of $1000 global,55% US from 2003 annual report), Wyeth ('Theta' report, est. of$800 global, est. 60% US from 2003 annual report),  Chiron (est 60% of 357 is US)*

**In contrast, there were 25 manufacturers in 1988.**

## 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.

## 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

- x

- x

-                                   3-5 yrs 	              2-3yrs 	        2-4 yrs 	        ≥ 1 yr

- x

- Transfer Process to Manufacturing

- Build Facility

- II

- Research (Inc. Immunology)

- Preclinical Development (Inc. Formulation Science)

- Clinical Development (Inc Post Marketing Surveillance

**Have to build facility before you know you have a product**

## It can take a year to manufacture a single lot of a vaccine

- Complex biological process
- Example of vaccine production process:
**Event****	****	****	****	****Time Frame**1. 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

## 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

- 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

## 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.

## 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.

## 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.

## 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.

## 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.