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Feature

Smallpox vaccines: to invest or not to invest, tha

Posted on: 13 Jan 03
Smallpox vaccines: to invest or not to invest, tha

Summary

During the last year bioterrorism has attracted a high level of media and clinical attention. However, this publicity does not necessarily reflect a potential opportunity for easy market entry or high
During the last year bioterrorism has attracted a high level of media and clinical attention. However, this publicity does not necessarily reflect a potential opportunity for easy market entry or high return on investment in product development. Michael Randle examines the dilemma facing governments and companies alike: to invest in comprehensive vaccine production or risk a lack of cover.

While the US has ordered enough smallpox vaccine to immunize the entire population, European countries appear to have chosen a different strategy. According to Datamonitor's report "Biodefense and Emerging Infections" , this is likely to involve the immunization of high-risk individuals and 'ring fencing' vaccination around the site of any bioterrorist attack. Inevitably, some Western governments have vaccine stockpiles that are not large enough to immunize the entire population.

Manufacturers face a predicament of whether to mass produce smallpox vaccine, which would only be useful in the event of a bioterrorism attack, thereby risking their investment on a product that was technically discontinued in the 80s, or find themselves unable to meet demand in the event of a crisis.

The cost of preparation

Following last year's anthrax attacks on the US, the issue of biodefense has become an important worldwide government health and security concern, with the general public eager to know whether they would be prepared in the event of further attacks.

Since the eradication of smallpox in the 1970s, the smallpox vaccine has been taken off routine immunization schedules. This was due primarily to the global eradication of the disease but also a result of the side-effects associated with the vaccine.

Published data suggests that 15 out of every million people who receive the vaccine will suffer severe side effects, with one of these 15 dying from the severity of these effects.

In the event of an attack, the government could employ two alternative strategies - to vaccinate the entire population and risk the side effects, or ring vaccination, which would involve vaccinating all contacts of a person identified as carrying the smallpox infection, and then vaccinating all of the contact's, contacts to minimize the spread of infection.

Unsurprisingly, the US has led the way in smallpox immunization, ordering enough doses to immunize the entire country. It is also stockpiling antibiotics to guard against anthrax attacks and has increased funding made available for biodefense research.

The dilemma

Currently, it appears that European countries will adopt ring vaccination, alongside immunization of high-risk groups, such as the military and healthcare workers. For example, the UK is reported to have stockpiled enough smallpox vaccine to immunize 30-50% of the population while Germany is reported to have stockpiled enough smallpox vaccine to immunize around 35%.

With governments not ordering stock, vaccine manufacturers are left with a dilemma. Should they mass-produce vaccines that might never be needed or, alternatively, run the risk of not being able to meet demand in the event of a serious attack? Clearly, this represents a significant commercial and moral dilemma.

Even if ring-vaccination strategies prove successful at limiting the health impact of a smallpox attack, immunization of such select groups would leave the rest of the population feeling vulnerable and scared. The quandary facing manufacturers is whether to produce enough vaccine to meet government orders, or to produce additional vaccine capable of supplying the whole population.

This is a difficult financial and moral decision for manufacturers. If companies that produce vaccines were to make more of the product than they have government orders for, and then store that extra vaccine for any future emergency use, these stores could prove invaluable in the event of a crisis. However, as previously stated, this is obviously a business-venture founded on uncertainty and, as such, poses a huge dilemma.

Gap in the market?

"Currently, European governments only have enough vaccine to immunize around a third of the population. If an effective ring-vaccination strategy was implemented, this supply could be sufficient to protect the whole population," comments Hannah Withers, infectious diseases analyst at Datamonitor:

"Companies could potentially stockpile enough vaccine to immunize the rest of the population in the event of an attack, who would otherwise be concerned regarding the risk of becoming infected. However, if no attack occurs, companies will be left with a vast supply of useless stock on their hands. Consequently, should bioterrorism become a more realistic threat, the health and peace of mind of the general public will be dependent on a combination of government and company actions."

The increase in government funds that are being set aside for biodefense R&D programs (for example the US government will provide almost $3 billion to biodefense programs in 2003) will increase the incentive for smaller companies to enter the market.

Developing products specifically for government initiatives has the additional benefit of a guaranteed, if limited, market, with no need to conduct expensive marketing campaigns.

Rational response

Changes in FDA legislation regarding clinical trials of biodefense products in humans have also significantly decreased the costs associated with product development. A further incentive for smaller companies to consider entering the biodefense market is the opportunity it provides to promote the use of their platform technologies. The publicity generated from such a move could increase the chance of establishing licensing deals with large pharmaceutical companies.

The key benefits to be gained from the indication expansion of existing drugs to include bioterrorist indications, are the potential for additional revenue generation and an increase in brand awareness. However, the threat of compulsory licensing could act as a major disincentive to prevent companies from exploring this possibility.

The extent of public awareness in the US has nevertheless created potentially high commercial opportunity for the development of a vaccine. Whilst Western Governments must promote calm and avoid a situation of panic regarding biodefense strategy they also have the responsibility to prepare for worst-case scenarios. This will have to be done despite potentially having limited assistance from the major pharmaceutical companies.

Biodefense strategies will therefore inevitably be dictated by wealth and risk. It is understandable then that the US is set to build-up a stockpile of the smallpox vaccine while the more cash-constrained European states will favor strategies such as the 'ring fencing' policy.

If you found this week's Expert View useful, you may be interested in Datamonitor's reports, all available from www.datamonitor.com/healthcare:



· 42nd ICAAC 2002 - Biodefense and Emerging Infections priced $1,500
· The Infectious Disease Market in 2001: A Year in Review priced $1,500
· Strategic Perspectives 2001: Vaccines - The market for new leaders priced £10,000

For a free Datamonitor healthcare report please click here

For more information on Datamonitor products please visit www.datamonitor.com or email inpharm@datamonitor.com

Michael Randle

Last updated on: 27/08/2010 11:40:18

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