for the developing world, where funding for health services is constrained. One workshop participant from the public health sector speculated that for these newer vaccines, universal immunization in developing nations may not be possible. Instead, these countries may have to rely on more targeted—and thus more limited—immunization strategies. Another senior public health official urged that developing nations allocate more health dollars to preventive rather than curative efforts.

Lack of reliable information about potential markets for vaccine in the developing world has made U.S. industry reluctant to become involved in the CVI. Better country-specific epidemiologic and cost-effectiveness data would help fill this gap, one workshop break-out group concluded. (See “Determining Vaccine Need,” page 5.) in the report of the September workshop.) Industry confidence in the existence of such markets also could be enhanced by information sharing among the key players—U.S. manufacturers, government officials, regulatory authorities, and developing-country representatives. Although donor agencies can create market demand by buying vaccine for a particular region, this approach can lead to dependency unless the recipient country is able to begin purchasing vaccine with its own resources. Manufacturers at the workshop indicated they saw no distinction between the public and private sectors in the developing world and would oppose such “segmentation” if it restricted their access to potential markets.

Inconsistent regulations for vaccine safety and efficacy have put a damper on one of the most straightforward mechanisms by which industry could contribute to the CVI: vaccine donation. To satisfy WHO standards, which often differ from those of U.S. and European regulatory authorities, a company wishing to donate vaccine to UNICEF may be required to conduct a number of additional tests on its product. Few manufacturers are willing to undertake such potentially expensive steps, one industry official stated. Yet, companies may have a number of reasons for wanting to donate; indeed, the publicity value of such a gesture may very well exceed the value of the vaccine itself. To be truly useful, however, donations must meet certain criteria, including having sufficient shelf-life, meeting the needs of the recipient country, and being packaged in an appropriate volume.

FACILITATING GREATER U.S. INVOLVEMENT

Differential Pricing

The United States boasts one of the most technologically advanced vaccine development and production capabilities in the world. This capacity can, theoretically, be managed in a way that provides needed children’s vaccines to poorer regions of the world. As noted, however, there are a host of obstacles standing in the way of such a worthy objective. Of these, cost is perhaps the most troubling. No matter how safe and effective a vaccine; no matter how large



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The Children’s Vaccine Initiative: Continuing Activities: A Summary of Two Workshops Held September 12–13 and October 25–26, 1994 for the developing world, where funding for health services is constrained. One workshop participant from the public health sector speculated that for these newer vaccines, universal immunization in developing nations may not be possible. Instead, these countries may have to rely on more targeted—and thus more limited—immunization strategies. Another senior public health official urged that developing nations allocate more health dollars to preventive rather than curative efforts. Lack of reliable information about potential markets for vaccine in the developing world has made U.S. industry reluctant to become involved in the CVI. Better country-specific epidemiologic and cost-effectiveness data would help fill this gap, one workshop break-out group concluded. (See “Determining Vaccine Need,” page 5.) in the report of the September workshop.) Industry confidence in the existence of such markets also could be enhanced by information sharing among the key players—U.S. manufacturers, government officials, regulatory authorities, and developing-country representatives. Although donor agencies can create market demand by buying vaccine for a particular region, this approach can lead to dependency unless the recipient country is able to begin purchasing vaccine with its own resources. Manufacturers at the workshop indicated they saw no distinction between the public and private sectors in the developing world and would oppose such “segmentation” if it restricted their access to potential markets. Inconsistent regulations for vaccine safety and efficacy have put a damper on one of the most straightforward mechanisms by which industry could contribute to the CVI: vaccine donation. To satisfy WHO standards, which often differ from those of U.S. and European regulatory authorities, a company wishing to donate vaccine to UNICEF may be required to conduct a number of additional tests on its product. Few manufacturers are willing to undertake such potentially expensive steps, one industry official stated. Yet, companies may have a number of reasons for wanting to donate; indeed, the publicity value of such a gesture may very well exceed the value of the vaccine itself. To be truly useful, however, donations must meet certain criteria, including having sufficient shelf-life, meeting the needs of the recipient country, and being packaged in an appropriate volume. FACILITATING GREATER U.S. INVOLVEMENT Differential Pricing The United States boasts one of the most technologically advanced vaccine development and production capabilities in the world. This capacity can, theoretically, be managed in a way that provides needed children’s vaccines to poorer regions of the world. As noted, however, there are a host of obstacles standing in the way of such a worthy objective. Of these, cost is perhaps the most troubling. No matter how safe and effective a vaccine; no matter how large

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The Children’s Vaccine Initiative: Continuing Activities: A Summary of Two Workshops Held September 12–13 and October 25–26, 1994 a potential market; no matter what regulatory hurdles are removed; and no matter what the public image of the U.S. vaccine industry, if a vaccine is not affordable, it will not be used in the developing world. Given this reality, U.S. vaccine makers will need to vary the price of their products if the United States is to participate fully in the CVI, several workshop participants stressed. Domestically, U.S. vaccine companies employ (in their sales to the U.S. public and private sectors) a form of tiered, or differential, pricing. This practice rarely extends outside U.S. borders, however. Limiting the use of differential pricing in this way appears to run counter to international trends. One former industry executive pointed out that tiered pricing is becoming the rule rather than the exception as the world moves away from controlled markets. Another workshop participant noted that European vaccine manufacturers for decades have supported the sales of inexpensive vaccine to the developing world through private-sector sales in the developed world. There are no U.S. laws or regulations that prohibit tiered pricing for vaccine sold outside the United States. Nevertheless, many inside and outside of government seem to believe that U.S. citizens should not pay more than those in other countries for medicinals—including vaccines—made in the United States. With the exception of limited sales to individual countries, U.S firms have not sold vaccine at reduced prices outside the United States since the early 1980s, when questions about the practice arose in congressional hearings. The concern then was that American consumers were subsidizing the sale of lower-priced vaccine in other countries through their purchase of higher-priced vaccine in the United States. One workshop participant maintained that Congress is now much more cognizant of the benefits of tiered pricing and therefore would be more receptive to policies that encourage such practices. Differential pricing may have an additional appeal in the current cost-cutting climate on Capitol Hill: It is a form of indirect, or “off-budget, ” foreign-aid spending. If differential pricing were used by the U.S. vaccine industry to enter new markets, the resulting increase in production volume might actually mean lower vaccine prices for some segments of the U.S. market. This is because the marginal costs of production would be distributed over a larger number of doses. However, because of the need for dramatically enhanced production capacity, multi-tier pricing strategies might not appeal to manufacturers whose capacity to make vaccine already is fully utilized. According to one workshop participant with public-sector vaccine manufacturing experience, renovating an existing plant generally is not cost effective. Therefore, companies choosing to sell reduced-price vaccine may be forced to build new facilities, costing tens of millions of dollars, to accommodate the increased demand. Technology Transfer Opportunities for U.S. involvement in the CVI are not limited to the sale of vaccine. Another important option is technology transfer, which when successful

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The Children’s Vaccine Initiative: Continuing Activities: A Summary of Two Workshops Held September 12–13 and October 25–26, 1994 creates indigenous capacity where none existed before. Technology transfer frequently involves partnerships between the public and private sectors—and these collaborations can cut across the boundaries of developed and developing nations. For example, with support from the public sector, U.S. vaccine and biotechnology companies may work with developing-country scientists to create products of potential interest to the developing world. At a point farther down the product-development pipeline, the private and public sectors can work together to transfer already proven production technology and expertise to developing-country manufacturers. Workshop participants discussed both of these approaches to technology transfer. A member of the workshop with experience setting up agricultural research partnerships between U.S. industry and developing-country scientists stressed the importance of involving the U.S. private sector early on in such efforts. Industry is much less likely to stay engaged through the entire product-development cycle if it does not have a vested interest in the outcome from the start, this participant noted. Industry also is not likely to pursue technology transfer if there is little evidence of market opportunity for a potential product. An essential outcome of research partnerships is a product that is affordable to purchasers in poor nations. This can be accomplished if profits from sales to the private sector in that country are used to offset lower-cost sales to the public sector. One U.S. agency involved in providing contraceptive technologies to the developing world requires its industry partners to sell products to the public sector in a developing country at a “preferential” price. (There are no restrictions on the sale price to private-sector customers.) At this agency, if a company given federal funds to develop a technology does not transfer it to the developing world, the firm must pass the product on to a firm that will. Technology transfer can be fraught with difficulties. One common problem, according to a former developed-country vaccine company official who now advises developing-country vaccine makers, is excessively complex instrumentation. Often, such equipment, designed for developed-world settings, is unsuitable for developing-world applications, where water supplies may have significant impurities, there may be surges or breaks in electrical power, and sterile environments are difficult to maintain. (Indeed, noted one participant, if some of these fundamental problems cannot be resolved, the country may be better off buying the vaccine it needs from other sources.) In addition, much of the most sophisticated equipment is delivered without spare parts, is not supported by service contracts, and is accompanied by instructions that are nearly unintelligible, even for native English speakers (Box 6). Good manufacturing practices guidelines and validation more appropriate to the needs and conditions of the developing world might alleviate some of these problems, according to the consultant. Also, at least for countries making any of the current EPI vaccines, the purchase of simpler manufacturing equipment should be encouraged. In addition, vaccine equipment manufacturers should be required to provide engineering follow-up for machines that they sell. No matter how simple and well supported a piece of equipment is, without someone

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The Children’s Vaccine Initiative: Continuing Activities: A Summary of Two Workshops Held September 12–13 and October 25–26, 1994 BOX 6 How to Confuse!* “The output of the loop controller is adjusted according to a standard digital Proportional-Integral-Derivative (P-I-D) algorithm, which varies it systematically to maintain the control quantity at or very near its operating point. The Proportional, Integral and Derivative gains can be specified by the user. (They remain shown in all modes, but are only effective in P-I-D). The gains should be set with the SCALE in mind: they actually operate directly on the unscaled—i.e. normalized-error. Both excess set point cascade and output cascade can be generated. “The three gains of a P-I-D loop must be carefully selected to achieve optimum performance of the controlled feedback loops. Those not familiar with closed-loop control theory are urged to consult the factory for guidance in selecting these values for new applications. When selecting these gains, remember that they apply directly to normalized input and output quantities. If the preceding sentence seems obscure to you, get help.” * Excerpt from an operating manual for a 250-liter fermenter used in vaccine manufacturing. SOURCE: Text supplied courtesy D. Stainer. properly trained to use it, the benefit may be lost. Therefore, another key component of technology transfer is ongoing training. Workshop participants also discussed a concept paper that presented a comprehensive approach to technology transfer. Among other things, the paper proposed the formation of an international public-sector vaccine consortium. The consortium would help developing countries produce high-quality DTP, DTP-combination, and low-profit, “orphan ”44 vaccines through a stepwise process involving technical training and the establishment of demonstration vaccine 44   In this context, orphan vaccines are those directed against diseases whose prevalence is very low in industrialized nations but that pose a significant health threat in the developing world.