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May 23, 2016

For Struggling Pharma Market, Vaccines Offer Path to Revenue

The World Vaccines Market Is Predicted to Reach $45.1 billion in 2022

For Struggling Pharma Market, Vaccines Offer Path to Revenue

Pediatric vaccines constitute the base market for vaccines and the larger market, accounting for 57.6% of the total vaccines market. [NIH]

  • Click Image To Enlarge +
    Figure 1. Market for vaccines

    The revenue growth opportunity in vaccines looks far more promising when compared to the overall market for pharmaceuticals. Revenues earned by vaccines manufacturers worldwide reached $27.6 billion in 2015 according to Kalorama Information, up 11% from $24.7 billion in 2014, as sales in all segments expanded (Figure 1).  This is, by Kalorama’s estimate, at least five to ten times the revenue growth rate of the overall pharmaceutical market in recent years.  The world vaccines market is predicted to increase at a compound annual rate of 7.6% during 2013–2022, reaching $45.1 billion in 2022 as new product introductions continue and usage of current products expands further. 

  • Vaccines Market Basics

    Click Image To Enlarge +
    Figure 2. Market share in vaccines

    The vaccines market is generally categorized by pediatric and adult vaccines. Pediatric vaccines constitute the base market for vaccines and the larger market, accounting for 57.6% of the total vaccines market. Adult immunization is an important, but frequently overlooked, part of patient care.

    Vaccination programs typically focus on children, yet adults in industrialized countries are more likely to die as a result of vaccine-preventable diseases than are children. Vaccination protects not only individuals, but also entire communities from diseases spread by person-to-person transmission.  For example, vaccination can prevent about 50% of deaths from pneumococcal disease and 80% of deaths from influenza-related complications in the elderly.  Pharmacoeconomic studies have demonstrated the value of influenza and pneumococcal vaccines; however, immunization rates for these diseases continue to be low in the elderly populations. 

    Immunizations by public providers are generally paid for through federal and state government funding under public health programs. These programs are intended to reduce barriers to immunization and to improve immunization rates by providing free vaccines to qualifying infants and children. 

    Because of the complexity of vaccines, a barrier entry to market provides a shelter for a few companies that can handle the order production, deal with production facilities and material vendors, and conduct efficient operations and distribution.  The world vaccines market is dominated by four major competitors: Sanofi Pasteur, GlaxoSmithKline, Merck & Co., and Pfizer.  Pfizer and Merck hold 45% of the market (Figure 2).  As the market leader in 2015, Pfizer’s vaccine sales exceeded $6.4 billion on strong growth of its Prevnar family, giving the company 23.3% of the market. Pfizer was followed by Merck with $5.9 billion. Sanofi and Glaxo comprise the next category of market leaders, with the remaining share split by those companies and a dozen others.

  • Key Issues in the Global Vaccine Market

    Key issues in the global vaccine market today include pricing pressure, product safety and refusal to immunize, obesity, supply shortages, increasing vaccine development efficiency, and innovations in vaccine delivery systems and production.

    Pricing Pressure

    Pricing pressure on vaccines continues to rise with the introduction of new, higher-priced vaccines and other pharmaceutical products. Recent research suggests that about three-quarters of Americans think that rising drug prices are a pressing issue and legislative or other action is needed to keep prices affordable. These and other initiatives are expected to exert downward pricing pressure on vaccines, particularly in the developing world markets. In response, manufacturers are seeking ways to lower production costs.

    Product Safety and Refusal to Vaccinate

    In recent years, some segments of the public have become increasingly concerned about the risks associated with vaccines, which has led to some parents choosing not to vaccinate their children.  Because vaccination is such a common and memorable event, any illness following immunization may be attributed to the vaccine. Although some of these reactions may be caused by the vaccine, many of them are unrelated events that occur by coincidence after vaccination.

    News and reports of vaccine-related illnesses tend to exacerbate the public’s fears and result in higher rates of nonimmunization. In response, the American Academy of Pediatrics launched a Refusal to Vaccinate form in 2013 designed to educate parents about the impact of refusing to vaccinate their children and to document such refusals. Nonetheless, data from the National Foundation for Infectious Diseases (NFID) indicates that 50,000 Americans continue to die each year from vaccine-preventable diseases.

    Obesity and Vaccines

    In addition to being associated with a broad range of serious co-morbidities including arthritis, asthma, cancer, cardiovascular disease, diabetes, gastrointestinal disease, hypertension, kidney disease, pain, and sleeping disorders, obesity has recently been linked to reduced effectiveness of vaccines. In a recent study of 22 obese teenagers conducted at Baylor College of Medicine in Texas, researchers found that the standard 1-inch injection needle spurred only a weak response to hepatitis B vaccine, whereas a 1.5-inch needle provided a higher antibody count. Longer needles are not routinely used for vaccinations, and therefore many healthcare professionals are not aware of the limitations of shorter needles. This issue presents a potentially significant public health risk due to the likelihood of similar limitations with other vaccines and rising rates of obesity.

    Supply Shortages

    There have been and will continue to be challenges to the vaccine delivery system in terms of the science, economics, and social impact of immunization. These challenges may increase as new vaccines are developed.  For example, shortages of specific vaccines continue to occur in both developed and developing nations and have resulted in significant disruption to childhood immunizations. Vaccine shortages and delays have plagued the U.S. and other countries for years and continue to do so. Such shortages can occur for many reasons, including a limited number of manufacturers in the vaccine market, manufacturing or production problems, insufficient stockpiles, and (in the developing nations) greater medical need than ability to pay for vaccines.

    Another significant challenge to immunization delivery is the increasing concern within a segment of the general public about the safety and potential adverse effects of childhood immunizations.

    Clinical Development of Vaccines

    Vaccine clinical development follows the same general pathway as drugs and other biologics, with developers submitting an Investigational New Drug (IND) application to the FDA and then conducting progressively more comprehensive clinical studies. The successful completion of Phase III testing is typically followed by the submission of a Biologics License Application (BLA).  The FDA’s Vaccines and Related Biological Products Advisory Committee (VRBPAC) provides advice to the agency regarding the safety and efficacy of the vaccine for the proposed indication. Vaccine approval also requires the provision of adequate product labeling to allow healthcare providers to understand the vaccine’s proper use, including its potential benefits and risks, and to communicate with patients and parents and to safely deliver the vaccine to the public. 

    Although extensive studies are required for licensure, postmarketing research and surveillance are also necessary to identify safety issues that may only arise or be detected following vaccination of a much larger population.  Similar vaccine approval procedures are employed by other regulatory authorities in Europe, Asia, Latin America, and other regions.

    Vaccines Innovations

    Innovations in vaccines are focused on new disease targets and new development strategies.  Vaccine development is a complex, expensive, and time-consuming process, typically costing $500 million or more and spanning several years. Some projects take considerably longer. For example, Sanofi Pasteur reportedly spent $1.7 billion and 20 years developing the Dengvaxia® vaccine for dengue fever. Furthermore, many worthwhile projects are terminated for reasons related to commercial viability. Several leading companies have established novel collaborations to shorten development times and bring much-needed new products to market more quickly and effectively. In one of these collaborations, Sanofi Pasteur, the Bill & Melinda Gates Foundation, and the Infectious Disease Research Institute (IDRI) partnered to create the Global Health Vaccine Center of Innovation (GHVCI), with a mission to create a new, cheaper model for vaccines development.

    The challenge to develop needle-free vaccines has been taken up by researchers worldwide, and it is likely that within the forecast period of this report, at least one new delivery system will be introduced commercially. Edible vaccines, mucosally delivered vaccines, intranasal vaccines, vaccine patches, and vaccine chips are all under development, with the latter expected to be commercialized within the next several years. Chips are an especially novel method of vaccine administration, having been pioneered by scientists at several universities.

    Production techniques are an important but overlooked area of vaccine development, because improvements in production methods can significantly impact both speed to market and cost. Tobacco plants, insects, and nanoparticle systems all offer a means to produce vaccines more quickly and cost effectively than using chicken eggs. Of these, tobacco plants offer the greatest immediate potential, with production scale-up expected within the forecast period of this report.

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