National Academies Press: OpenBook

The Children's Vaccine Initiative: Continuing Activities (1995)

Chapter: A ROLE FOR INDUSTRY

« Previous: RESHAPING THE EPI
Suggested Citation:"A ROLE FOR INDUSTRY." Institute of Medicine. 1995. The Children's Vaccine Initiative: Continuing Activities. Washington, DC: The National Academies Press. doi: 10.17226/9103.
×

industry on everything from applied research and development to production scaleup (Table 6). Although UNICEF has already cofunded at least one vaccine clinical trial, the type of collaboration now envisioned would represent a significant shift in roles for the agency. It is unlikely that UNICEF would directly finance such activities, but so-called partnership sourcing could become part of a broader CVI strategy that draws support from other sources. It was unclear at the meeting whether the changes in UNICEF’s procurement strategy will markedly increase the interest of U.S. suppliers in providing vaccines to UNICEF.

A ROLE FOR INDUSTRY

Workshop attendees were nearly unanimous in the view that the ultimate success of the CVI depends on the involvement of the U.S. vaccine and biotechnology industries. Conversely, they noted, the U.S. public and private sectors have much to gain from greater involvement in the initiative. For instance, at least some new combination vaccines useful in the United States also might find application in the developing world. And given the rapidity with which infectious diseases can travel the globe, it is in the United States’ best interests to reduce the incidence of preventable illness outside its borders. In addition, in as much as the improved health resulting from immunization contributes to the economic growth and stability of developing and transitional nations, encouraging industry participation in the CVI could be viewed as benefiting U.S. foreign policy aims. Also, a robust CVI will fuel the U.S. biotechnology industry, in which much of the most inventive applied vaccine research occurs. Finally, by opening future overseas markets—for example, for pharmaceuticals—involvement in the CVI could benefit the larger U.S. vaccine manufacturers.

Barriers to Participation

Though there are clear advantages—both from a public health and commercial perspective—to U.S. vaccine industry involvement in the CVI, achieving such participation will be difficult. Several industry representatives pointed to recent, strongly negative public attention focused on vaccine manufacturers as one of the most serious obstacles. Such disapproving sentiments seem to be based on a perception that U.S. vaccine prices are too high, but they may be encouraged by misunderstandings of the pricing structure

Suggested Citation:"A ROLE FOR INDUSTRY." Institute of Medicine. 1995. The Children's Vaccine Initiative: Continuing Activities. Washington, DC: The National Academies Press. doi: 10.17226/9103.
×

TABLE 6 Possible UNICEF–Industry Partnerships

 

Research

Development

Scale-Up

Description

Supplier conducts research

We provide financial support

Cooperate to develop vaccine

We support clinical trial work

We solicit government support

Supplier provides vaccine and expertise

Supplier scales-up vaccine

Suppliers

One to many

One to many

One

Selection Criteria

Research plan and research skill of supplier

Vaccine performance, development plan, and development skill of supplier

Vaccine approval, price

Terms

Joint funding of research

Supplier controls decision-making on IPRs

Supplier has first option to proceed with research; if it declines, we can go elsewhere

Supplier commits to cost-plus pricing if/when vaccine is launched

Supplier funds development activity UNICEF receives right to purchase vaccine at cost plus if/when developed

Supplier incurs cost of scale-up and production

Volume, Price Obligation

None

None

UNICEF and supplier agree to specific price/volume commitments

Assuming vaccine meets minimum performance and quality characteristics

NOTE: IPR = intellecutal property rights.

SOURCE: UNICEF, 1994

Suggested Citation:"A ROLE FOR INDUSTRY." Institute of Medicine. 1995. The Children's Vaccine Initiative: Continuing Activities. Washington, DC: The National Academies Press. doi: 10.17226/9103.
×

for vaccines sold in the United States.40 These negative views gained strength early in the Clinton presidency, when concern arose over less-than-optimal immunization rates among U.S. infants.

Despite evidence41 that cost is only a minor barrier to immunization (and certainly not the most important), one response to the problem was congressional enactment of the Vaccines for Children (VFC) program42. Because it caps the prices of currently recommended immunizations at the May 1993 level and increases the number of children who can receive free vaccine, the VFC is expected to reduce vaccine industry revenues. One result, according to the head of a major U.S. vaccine firm, will be reduced spending on vaccine research,43 including on CVI-type products. This concern was echoed by biotechnology industry officials. The VFC may deal another blow to the CVI: Enactment of the program has made the vaccine industry extremely hesitant to propose pricing schemes—including reduced-price sales to the developing world—that might create a backlash in the United States. (See “Differential Pricing,” below.)

Interestingly, since the price cap does not now apply to new vaccines or vaccine combinations, the VFC may have the positive (and unintended) effect of encouraging vaccine innovation. But innovation comes with a price—literally. The expected high cost of vaccines developed with proprietary technologies could delay, or perhaps even prevent altogether, the widespread use of these products in the developing world. (It should be noted that there is nothing preventing Congress from extending the cap to new vaccine products.) Cost is an issue both for industry, which requires a moderate profit to support its R&D activities, and

40  

Vaccine manufacturers in the United States sell their products at one price to the private sector and at a lower price to the public sector. In effect, sales to the private sector have helped to subsidize purchases by the public sector. Until enactment of the Vaccines for Children program, the proportion of sales to both sectors was roughly equal. Now, considerably more vaccine is purchased at the cheaper, public-sector price. For more information on U.S. vaccine pricing policies, see pages 79-82 of The Children’s Vaccine Initiative: Achieving the Vision, National Academy Press, 1993.

41  

See, for example, the Institute of Medicine report, Overcoming Barriers to Immunization: A Workshop Summary, National Academy Press, 1994.

42  

The VFC, enacted as part of the Omnibus Budget Reconciliation Act of 1993 (P.L. 103-66) is an entitlement program that expands the group of children eligible for free vaccine to include those without insurance. It also provides federal funds to pay for vaccine previously paid for by state Medicaid programs, in effect providing a windfall of millions of dollars to many state treasuries.

43  

The U.S. National Vaccine Program Office has asked Mercer Management Consulting to examine this possibility as part of an in-depth look at the economics of the U.S. vaccine industry. Mercer presented preliminary results from its study at a May 11–12, 1995, meeting of the National Vaccine Advisory Committee in Washington, D.C. Public release of the Mercer findings awaits the completion of additional analyses requested by the NVAC.

Suggested Citation:"A ROLE FOR INDUSTRY." Institute of Medicine. 1995. The Children's Vaccine Initiative: Continuing Activities. Washington, DC: The National Academies Press. doi: 10.17226/9103.
×
Page 32
Suggested Citation:"A ROLE FOR INDUSTRY." Institute of Medicine. 1995. The Children's Vaccine Initiative: Continuing Activities. Washington, DC: The National Academies Press. doi: 10.17226/9103.
×
Page 33
Suggested Citation:"A ROLE FOR INDUSTRY." Institute of Medicine. 1995. The Children's Vaccine Initiative: Continuing Activities. Washington, DC: The National Academies Press. doi: 10.17226/9103.
×
Page 34
Next: FACILITATING GREATER U.S. INVOLVEMENT »
The Children's Vaccine Initiative: Continuing Activities Get This Book
×
MyNAP members save 10% online.
Login or Register to save!
  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    Switch between the Original Pages, where you can read the report as it appeared in print, and Text Pages for the web version, where you can highlight and search the text.

    « Back Next »
  6. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  7. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  8. ×

    View our suggested citation for this chapter.

    « Back Next »
  9. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!