Name of Lead Author: Vanina Laurent-Ledru
Organization: Sanofi Pasteur
In the recent past, innovation in vaccines has been driven by the medical needs of markets that can afford the launch prices necessary to fund and incentivize innovation and production scale up. As a result, vaccines are launched first in developed countries at a small volume and competitive price, before being made available 8 to 10 years later in low and middle income countries (LMICs) at a reduced price. In this conventional model, access in poorer countries tends to be delayed and diseases endemic to these countries only are often neglected. Since the traditional vaccine introduction model does not allow LMICs´ timely access to innovative vaccines, alternative solutions and models are needed. Dengue fever, for which half the world is at risk, but which is endemic mainly in LMICs, provided an opportunity for Sanofi to flip the access model. Sanofi is accelerating access to its dengue vaccine by ensuring priority access to this innovation first in endemic countries where it can have the greatest impact on global dengue burden. A successful launch of the dengue vaccine may chart a new course for private sector investment in LMICs, demonstrating an attractive business model for vaccine manufacturers. It may also promote continued investment in healthcare innovations for LMICs that address their specific medical needs while contributing to development of in-country infrastructure, skills and capacity for managing infectious diseases.
Communicable diseases such as malaria, leishmaniasis, Chagas disease, tuberculosis, dengue fever, and African trypanosomiasis and more recently Zika extract a heavy toll in lower income countries. Zika´s spread to more than twenty countries mainly in tropical and sub-tropical regions and the anxiety it has fueled among the general public has reopened the debate on the development of new vaccines for diseases affecting mostly low (LICs) and middle income countries (MICs). In fact, 26 years after the Global Forum for Health Research warned against the “10/90 gap” (referring to the Commission on Health Research for Development´s finding that less than 10% of the world’s research & development (R&D) was spent on diseases affecting developing countries where 90% of all preventable deaths worldwide occurred), the gap very much remains.1-2
In the recent past, innovation in vaccines has been driven by the medical needs of markets that can afford the launch prices necessary to fund and incentivize innovation and production scale up. As a result, vaccines are launched first in developed countries at a small volume and competitive price, before being made available 8 to 10 years later in low and middle income countries (LMICs) at a reduced price.3 In this conventional model, access in poorer countries tends to be delayed and diseases endemic to these countries only are often neglected.
This imbalance in disease burden between developed and LMICs raises the following questions: How can we secure LMICs´ timely access to new vaccines at high volume and acceptable cost? How can we encourage manufacturers to invest in R&D and in health solutions tailored to LMICs´ specific needs, in accordance with SDG3?
Since the traditional vaccine introduction model does not favor LMICs´ timely access to innovative vaccines (I), a new more business model, where an innovative vaccine is introduced first in LMICs, is being explored (II).
I. The traditional vaccine introduction model does not allow LMICs´ timely access to innovative vaccines
In the traditional vaccine introduction model, a vaccine manufacturer releases a new vaccine to wealthier countries first. These countries get priority access since they are able to pay a price that enables the producer to continue investing in innovation as well as in increased production volumes. This increased production volume will allow access for lower income countries at a reduced cost, but several years later as it requires 3-5 years and $200-400 million to build a new production facility. This model has been viewed as essential to allow continued investment in innovation and to increasing production volumes.
The combination of this model and the arrival of a significant number of innovative new vaccines in the 90s and 2000s, led to an important gap between vaccines available to developed countries and those available to developing countries, in particular for vaccines such as hepatitis B, Haemophilus influenza type b (Hib), HPV, rotavirus, PCV, influenza etc.4
Vaccines have proven to be one of the most cost-effective and inexpensive tools for improving health.5 They therefore represent a crucial investment for LMICs whose timely access to this decisive medical intervention is essential. LMICs´ delayed access to innovative vaccines comes with a cost: medical care cost associated with the disease, outbreak control cost, loss of revenue from tourism, cost of lost productivity etc. while vaccination provides high returns on investment.5 As emphasized by Bloom et al, “Immunization provides a large return on a small investment—higher than most other health interventions” (Bloom et al. 2005). In 2005 for example, a study estimated that a GAVI immunization program´s return on investment was 12% in 2005, reaching 18% in 2020.5
When considering investments, private firms evaluate the market potential: the cost and risks associated with investments and the return to be generated by future sales.6 LMICs tend to be viewed as more unpredictable and less likely to provide the returns necessary to fund innovation than higher income countries. Batson has described how developing markets have been perceived as characterized by inaccurate demand forecasts, constrained and unpredictable government budgets, downward pressure on price and slow market penetration.6 This situation has made it challenging for shareholder-held vaccine manufacturers to address LMICs´ specific needs; launching a vaccine first in wealthier countries allows them on the other hand to pay for innovation and thus to provide later access to LMICs. Despite delayed access, this appeared as a sustainable model to fund necessary innovation and introduce innovative vaccines.
The incentives inherent to the classical vaccine introduction model therefore partly explain the lack of innovative solutions for many infectious diseases specific to LMICs. Acknowledging this situation, global public health institutions and the pharmaceutical industry have come up with solutions based on “push” mechanisms that lower the cost of producing new vaccines and “pull” mechanisms that increase the market for them.7 Several promising and innovative approaches such as Public-Private Partnerships (PPPs) or Advance Market Commitments (AMCs) have been explored to increase incentives to develop new vaccines for LMICs.
Public-Private Partnerships (PPPs) for new vaccines
Covering a wide range of ventures and involving a variety of arrangements, Public Private Partnerships can be described as agreements between government(s), non-profit organizations and one or more private partners which objective is to accelerate vaccine development so as to meet the specific health needs of developing countries. The Bill and Melinda Gates Foundation (BMGF) and the Rockefeller Foundation have been catalysts in the development of PPPs such as Medicines for Malaria or the International AIDS Vaccine Initiative; other well-known PPPs include the TB Alliance and the Meningitis Vaccine Project.8 According to the World Health Summit, PDPs now manage two-thirds of the identified drug development projects for neglected diseases.9
GAVI and the Global Fund were born as PPPs and are now playing a key role in giving access to new vaccines to populations in developing countries. GAVI in particular is bringing together UN agencies, governments, civil society and the private sector to increase equitable use of vaccines in poorer countries.10
Advance Market Commitments (AMCs)
The Advance Market Commitment (AMC) model is a “pull” mechanism devised to stimulate R&D on vaccines for developing countries while guaranteeing a subsidized market for the resulting product. Under this scheme, donors or governments make binding commitment to pay a specified price for a predetermined number of doses of the vaccine to a vaccine manufacturer so as to incentivize the manufacturer to develop vaccines for neglected diseases. Though “well-designed AMCs could play a role in mid-stage development, they are unlikely to be a practical way to drive R&D for challenging early-stage vaccines that face substantial scientific obstacles” (Keith et al. 2013).11
A handful of emerging countries –India, Brazil, China in particular- are also becoming leaders in the manufacturing of vaccines produced in high volumes for the South.12-13 Emerging suppliers, which include state-owned firms as well as privately-owned manufacturers, provide 86% of traditional vaccines procured at global level.14 These emerging suppliers tend however to manufacture mature and off-patent vaccines which have been available for decades, leveraging cost advantages to produce high volumes at low prices, rather than truly focusing on innovation. They lag behind multinational firms when it comes to technology and know-how, and while “many are quite proficient at scaling up manufacturing processes for mass production (…) they are still quite weak in earlier stages of R&D” (Wilson 2010).15 New generation vaccines thus continue to be produced by a limited number of multinational firms.
Despite above-mentioned positive developments (PPPs, AMCs, key role played by GAVI), resources for developing new vaccines targeting neglected tropical diseases are still comparatively scarce, and are not sufficient to meet these countries´ needs.
It is also important to underline that vaccination entails much more than just selling a product – in this case a vaccine. Vaccination requires the set-up of an entire ecosystem allowing for the effective vaccine implementation and delivery (eg trained health workers, adequate transportation systems, sufficient storage facilities, efficient cold chain system etc).
This raises the question whether it would be possible to develop a health solution designed for LMICs without seeking donor support. In other words, can a vaccine solution for endemic countries be designed while maintaining R&D incentives for the vaccine industry? There is a need today for a new vaccine introduction model allowing endemic populations to benefit from a timely and sustainable access to innovative vaccines tailored to their specific health needs.
II. Flipping the traditional introduction paradigm with the dengue vaccine
Sanofi has decided to rise to this challenge and to flip the traditional vaccine introduction model with its dengue vaccine.
Dengue is a serious and complex disease which mainly affects low and middle income sub-tropical and tropical countries and which weighs heavily on affected countries’ health systems and economies. The incidence of dengue has increased 30-fold over the last 50 years, but the true magnitude of the disease burden is highly underestimated.16
The Sanofi dengue vaccine—a live, attenuated, tetravalent vaccine—is the only vaccine that has shown evidence of clinical efficacy against dengue in clinical studies and that has been licensed in four countries as of February 18th 2016 (Mexico, the Philippines, Brazil and in El Salvador).17 Based on dengue´s epidemiology, Sanofi has decided to adopt a novel and bold approach to address the challenges posed by the disease and to focus on countries which need it the most.
Priority given to endemic countries where the need it the greatest and to the public sector
For the first time, an innovative vaccine will have its initial introduction in LMICs where the need is the greatest. In fact, Sanofi committed to flipping the access model with the dengue vaccine by ensuring priority access to this innovation first in endemic countries where it can have the greatest impact on global dengue burden.
Sanofi also committed to focusing on public sector introduction in order to ensure a broad access from registration on, and so as to achieve the largest possible impact on disease through large-scale vaccination campaigns. To do this, the company is valuing the vaccine in a way that balances the cost of innovation against affordability in these LMICs.
An early engagement in the R&D and industrial capacity of a dengue vaccine
The company engaged in an ambitious R&D and industrial strategy, long before the dengue vaccine launch. Indeed Sanofi recognized the scale of the dengue problem at its early stages twenty years ago, and started building public health collaborations as well as industrial resources essential to the dengue vaccine´s development and introduction. Considering dengue was a public health emergency, the company made a bold and unusual decision from the start: it chose to develop the vaccine, set-up the industrial capacity and prepare market launch all in parallel, rather than as a sequence as it is usually done.18
Sanofi committed considerable resources to dengue, investing in R&D and industrial capacity. This included a €350 million upfront investment in dedicated, state-of-the-art, high-quality production facilities.19 With a dedicated production plan in Neuville, France, the company has started producing around 100 million doses per year as of 2016, so as to supply one billion doses over 10 years. This early – and at risk- engagement allows Sanofi to have doses available at the time of licenses, and thus to avoid a time lag between license and implementation.
Paving the way for the introduction of future vaccines while creating social value
A successful launch of the candidate dengue vaccine would demonstrate an attractive business model for private companies and promote continued investment in health solutions for LMICs. Dengue could serve as a model for introducing newer vaccines that will also require large-scale vaccination programs. The wider implications of this novel access approach are that emerging markets can begin to drive sustainable private investment in healthcare innovations that address their specific unmet medical needs while building in-country skills and capacity.
In fact, in endemic countries where the clinical trials took place (40,000 individuals enrolled in 15 countries), Sanofi also built local collaborations, empowered local healthcare providers with dengue and vaccine knowledge, and provided upgraded healthcare facilities as well as education on dengue prevention to communities at risk.
It is important to highlight that the “flipping the model” approach also comes with challenges, associated in particular with the lower maturity of LMICs versus developed countries in terms of regulatory capacity, epidemiological surveillance or economic evaluation. These weaknesses need to be compensated by increased collaboration and support, as they could potentially hinder the successful implementation of the dengue vaccine. In this new business model, it has been essential for Sanofi to go beyond the traditional vaccine manufacturing role and to act as a fully-fledged public health partner, working with National Regulatory Authorities, Ministries of Health and the World Health Organization (WHO) to support partner countries through capacity building and through the mobilization of the global health community in the fight against dengue.
In 2010, the BMGF declared this decade “The Decade of Vaccines”.20 The dengue business model for vaccine development and introduction in LMICs is aiming to make this statement a reality and to bridge the “10/90” gap in accordance with SDG 3. If successful, the dengue vaccine introduction model may chart a new course for private sector investment in LMICs, demonstrating that diseases specific to these countries represent viable commercial opportunities for private industry. Vaccine manufacturers may become more inclined to addressing the unmet medical needs of LMICs as a priority rather than as a secondary issue. On the contrary, if the dengue vaccine introduction fails, this market failure might hinder the development of vaccines targeted at LMICs for the coming years.
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