Low sales give drug firms little incentive to produce flu vaccines

For a vaccine maker, potential pandemic outbreaks of viruses like the swine flu have not translated into blockbuster sales that the pharmaceutical industry typically loves.

And it’s this lack of revenue that has left the public vulnerable, with few companies in the vaccine business and a largely dated method of producing flu vaccines that could delay a potential product in the event of a pandemic, researchers and analysts say.

“It’s one of those issues that is hard to fathom,” said Dr. John Flaherty, associate chief of infectious diseases and professor of medicine at Northwestern University. “You have to have the production capacity to develop and produce a vaccine in a short period of time and then potentially not use it for years. Mixed in there is the anxiety on the part of the manufacturers that this could be another false alarm.”

Past cases of a pandemic threat has brought only tens of millions of dollars worth of contracts to such manufacturers as British giant GlaxoSmithKline PLC and Deerfield, Ill.-based Baxter International Inc. to build stockpiles of various vaccines.

Both have won contracts worldwide to prevent the spread of the H5N1 virus, also known as bird flu, in the past five years, and are working with the World Health Organization on a vaccine to curb the swine flu that is blamed for scores of deaths in Mexico and has emerged as a threat in the U.S.

But vaccines have not been a lucrative incentive for pharmaceutical companies. The U.S. vaccine industry accounted for $4.9 billion in annual sales last year. In the same time frame, Pfizer Inc. sold nearly $8 billion worth of the cholesterol drug Lipitor, and AstraZeneca PLC generated $6 billion in sales from its heartburn pill Nexium, according to market research firm IMS Health.

To motivate companies, the Bush administration three years ago awarded about $1 billion to manufacturers to increase and speed production of vaccines, particularly after the spread of the bird flu. Several vaccine makers, including GlaxoSmithKline and Novartis AG, were awarded multimillion-dollar contracts to encourage the industry to find a vaccine-making process that’s faster than the 1940s-era egg-based technology.

Baxter is believed to be a leader in cell-based technology, which allows the company to cut production times in half compared with the older process, which involves processing by hand millions of chicken eggs. Baxter won several contracts to stockpile its bird flu vaccine, but it has yet to be approved for use in the U.S.

The cell-based method can generate yields in about 13 weeks, compared with 24 weeks in egg-based manufacturing, Baxter said.

The bigger and more established vaccine makers say their cell-based method is not as far along as Baxter’s. But they tout the egg-based method as safe, effective and well-tested.

GlaxoSmithKline “has been working on cell-culture-based flu vaccine, and we have a proven track record of developing successful seasonal flu vaccine and a pandemic vaccine approved in Europe using egg-based technology,” said company spokeswoman Sarah Alspach. “Cell-culture-based production process is long and arduous, and it is still early in our development of this technology.”

But some researchers believe the financial incentives are there for vaccine makers to make money, particularly because there is a lack of competition.

For example, Wyeth’s Prevnar, used to prevent bacterial meningitis, costs more than $330 for a four-shot regimen given to infants and young children, generating more than $2.5 billion in sales last year. The New Jersey-based drug giant hopes this year to win regulatory approval to sell Prevnar as a vaccine against 13 strains of pneumonia, six more than the current vaccine.

“I don’t believe they don’t make money on vaccines,” said Dr. Robert Daum, pediatric infectious disease specialist at the University of Chicago and former chairman of the U.S. Food and Drug Administration’s flu vaccine advisory committee. “They sell more 100 million dosages of seasonal vaccine every year in the U.S.”

? 2009, Chicago Tribune. Source: McClatchy-Tribune Information Services.