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MARKETWATCHThe Impact Of Globalization On Vaccine Development And Availability
Globalization is likely to affect many aspects of public health, one of which is vaccine-preventable communicable diseases. Important forces include increased funding initiatives supporting immunization at the global level; regulatory harmonization; widespread intellectual property rights provisions through the World Trade Organization agreements; the emergence of developing-country manufacturers as major players in vaccine supply; and the appearance of new communicable disease threats, including those potentially linked to bioterrorism. All of these forces can affect, either positively and negatively, the development and availability of vaccines. Harnessing these will be a challenge for policymakers and immunization stakeholders.
GLOBALIZATION CAN BE defined as the "process of denationalization of markets, laws, and politics in the sense of interlacing peoples and individuals for the sake of the common good."1 Economic globalization, characterized by increasing cross-border flows of goods, services, capital, people, and information is a critical determinant of globalization’s impact on health.2 There are many studies on the consequences of globalization on availability of pharmaceutical products.3 This paper focuses specifically on the effects, both positive and negative, globalization has on development of and access to vaccines to prevent communicable diseases. First we provide examples of how globalization affects the dissemination and prevention of communicable diseases. We next illustrate the impact of vaccines on public health and provide an overview of the trends in the vaccine market. We analyze the impact of some of the forces generated by globalization on vaccine availability, and we conclude with some suggestions as to how to handle these forces in ways that will improve vaccine availability and thus public health.
Patterns of communicable diseases. The experience of recent decades has clearly shown the impact of globalization on the dissemination of communicable disease. The increase in air travel has resulted in the spread of malaria to a Geneva postal carrier, of polio-virus from India to northern Minnesota, and of severe acute respiratory syndrome (SARS) from China to Canada. Some infections are associated with specific types of travel. For example, outbreaks of meningitis have repeatedly struck following the annual pilgrimage of the Hajj in Saudi Arabia. The first epidemic of W135 meningococcal meningitis among Hajj pilgrims in 2000 resulted in a major meningitis W135 epidemic in Africa, especially Burkina Faso.4 International health regulations. The World Health Assembly approved a new set of international health regulations in May 2005, to take effect in May 2007.5 These regulations recognize that infectious diseases do not respect national boundaries and thus include broader obligations for countries to take actions at borders and airports in the face of public health emergencies. Globalization, trade, and intellectual property rights. The World Trade Organization (WTO) has promoted several agreements that could affect public health. One of these is the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which requires WTO members to establish minimum standards for protecting and enforcing intellectual property rights (IPRs).6 The WTO membership includes several countries that had no previous IPR provisions. In other developing countries where provisions existed, they were not standardized. The Doha Declaration allows a transition period of until 2016 for the least-developed countries to develop such protection. There have been fears that TRIPS could reduce access to pharmaceutical products, including vaccines. TRIPS does include several articles that ensure the protection of public health in its implementation, including provision for compulsory licensing. Globalization and harmonization. The International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH) brings together regulatory authorities and industry experts of Europe, Japan, and the United States to achieve greater harmonization in interpreting and applying technical guidelines and requirements for product registration.7 To date, many of its deliberations are not applicable to vaccines, but the approach to harmonizing regulatory norms and standards is also being replicated in other regions of the world (such as South Asia and southern Africa). To the extent that these approaches make regulatory approval of vaccines more efficient, they can positively affect public health.
Achievements of immunization. Immunization against vaccine-preventable diseases prevents nearly three million deaths per year; an additional three million deaths could be prevented by better use of existing vaccines.8 The World Health Organization (WHO) estimates that there were 10.5 million deaths in 2002 among children under age five (of a total of 57 million deaths that year) from diseases for which licensed vaccines are available.9 Malaria, tuberculosis, and AIDS account for another five million deaths per year that are potentially preventable by vaccination.10 The eradication of smallpox, the success of the polio eradication initiative in reducing polio’s global incidence by 99.9 percent (350,000 cases per year in 1998 to fewer than 800 in 2002), the achievements of the Expanded Programme on Immunization, and the recent 39 percent decrease in the number of measles deaths worldwide all illustrate the benefits of vaccination.11 Effective new vaccines have been introduced in most industrialized countries against infections caused by the hepatitis B virus and Haemophilus influenzae type b, and many are introducing a new vaccine against Neisseria meningitides meningitis. Developing-country immunization programs are progressively incorporating the first two vaccines, many receiving financial support from the Global Alliance for Vaccines and Immunization (GAVI). Drivers of global vaccine development priorities. Vaccines strongly benefit citizens in both wealthy and developing countries, but the needs of industrialized-country markets, very different from those in the developing world, drive commercial vaccine development. In fact, the U.S. market accounts for 60 percent of the global profits of the industry.12 The currently available pneumococcal conjugate vaccine has a serotype distribution reflecting Streptococcus pneumoniae prevalence in the industrialized world and is available at a price that is too high for the developing world. Recent awards by the U.S. government to vaccine manufacturers to develop vaccines against bioterrorism agents and pandemic flu have little impact on research and development (R&D) targeting priority diseases in Africa. But there is hope. Two vaccines against rotavirus diarrhea, the most frequent cause of serious diarrhea in both wealthy and developing countries, were recently licensed; two candidate vaccines against cervical cancer induced by human papillomavirus, a problem throughout the world, have shown excellent efficacy in clinical trials and are likely to become available in 2006; and recent results have shown that vaccinating infants with a nine-valent pneumococcal conjugate vaccine could greatly reduce death and serious illness among children in the developing world.13 Vaccine R&D is a costly, high-risk enterprise.14 The process is complex, and it usually takes more than ten years to bring a vaccine from research to licensure.15 The product pipeline requires many early-stage development projects to gain one successful product. An earlier paper estimated an aggregate cost of at least US$200 million per successfully developed vaccine; this estimate is likely to be low.16 The uncertainty of research outcomes makes a portfolio of vaccine candidates for each targeted disease a necessity. The Global Forum for Health Research estimated that only about 10 percent of the US$70 billion spent worldwide on health R&D went toward research into 90 percent of the world’s health problems (the 10/90 gap).17 Thus, mechanisms are needed to change this balance. Drivers of the R&D process for vaccines intended for low-profit markets can be grouped into "push" and "pull" forces. A product is developed either because of a clear demand (a "pull") for the vaccine in the marketplace or because it becomes technically and operationally feasible (a "push"). In practice, the delivery of the product is dependent on the concerted action of both forces; the existence of an appropriate balance between these forces is required for establishing a sustainable product pipeline.18 The vaccine market. The economic situation for vaccine development within the private arena is bleaker than that for drugs. Vaccines typically are low-margin, single- or limited-use products that are often associated with high exposure to marketing risks—that is, uncertain demand. Previous attempts to predict demand have suffered from an inability to assess exactly when a given country would incorporate a new product into its immunization program and the evolution of coverage over time. Effective demand depends on financing and on immunization programs’ ability to absorb a new product. Even a delay of a few months in attaining target coverage in several large countries could greatly change the global supply picture. Moreover, past attempts at defining demand have looked at the potential developing-country uptake in a vacuum, failing to take into consideration the effects of the wealthier-country behavior.
The worldwide vaccine market, $9 billion in sales, is only a small percentage of the global pharmaceutical market, with sales of $550 billion.19 However, vaccines constitute a fast-growing segment, increasing 26 percent between 1999 and 2003 (Exhibit 1
The key players in the vaccine market have traditionally been multinational companies: Sanofi-Pasteur, Glaxo SmithKline, Merck, Wyeth, and Chiron account for more than 75 percent of vaccine revenues, with 70 percent of revenues from the United States and Europe and 30 percent from the rest of the world combined. In terms of volume, the picture is quite different. In 2004 the United Nations Children’s Fund (UNICEF), the largest procurer of vaccines by volume, bought around 2.8 billion doses of vaccines for developing countries—about 40 percent of global volume—for a total value of approximately US$370 million, which represents 4 percent of global sales.21
Vaccine supply has been fragile in recent years. As a result of low prices, some manufacturers in Organization for Economic Cooperation and Development (OECD) member countries have left the vaccine market, and others have begun phasing out the production of the traditional, less expensive vaccines used in developing countries, as more sophisticated and more expensive vaccines were introduced in industrialized-country markets. This undermines a key factor in the UNICEF model: the existence of excess capacities, which allows for tiered pricing. Exhibit 2
Several developments related to globalization have affected the delivery of immunization services and the supply of vaccines. These include an increased funding base at the global level, increased attention to regulatory standards and harmonization across national borders, the increasing role of developing-country manufacturers, the effect of WTO agreements such as TRIPS, and increasing attention to vaccines for new global disease threats such as bioterrorism or pandemic influenza. Sizable increase in funding. Through global inputs and interventions of United Nations (UN) agencies and alliances such as GAVI, immunization programs in the developing world are becoming better financed. These interventions have resulted in (1) a better-defined value of immunization in economic terms; (2) more funds available at country level; (3) greater emphasis on adding new products into national programs; and (4) more responsible behavior on the part of countries receiving vaccines. The work of the WHO on the impact of good health on development and that described by David Bloom and colleagues have resulted in better understanding of the potential economic impacts of vaccination.23 As Bloom and colleagues state, "Vaccines in par-ticular...are an inexpensive and extremely effective means of improving health and overall welfare. Their impacts...are much greater than previously thought...and policy makers who neglect immunization will be missing a great opportunity for promoting development."24 Such studies are useful in convincing world leaders to invest in immunization. Through the work of partners in the GAVI Alliance and the GAVI Fund, the financial sustainability of immunization programs has become an important goal, although coupled with the recognition that some countries will continue to depend on external support for years. The new definition of financial sustainability is "the ability...to mobilize and efficiently use domestic and supplementary external resources on a reliable basis to achieve current and future target levels of immunization performance in terms of access, utilization, quality, safety and equity."25 There has thus been an impetus to provide new funds for such programs, not only to strengthen immunization services but also to introduce newer priority vaccines. This process has been supported by unprecedented donations from the Bill and Melinda Gates Foundation; bilateral aid both to GAVI and to health programs in countries that are benefiting from GAVI support; and a new initiative, the International Finance Facility for Immunization (IFFIm), championed by the United Kingdom, which promises to channel more than US$3 billion through GAVI.26 In addition, the G-8 (Group of Eight) countries are considering financing an Advance Market Commitment project that could stimulate increasing production capacity or R&D, or both, for one or more developing-market vaccines.27 Regulatory harmonization. The importance of vaccine quality has increased over the years after the realization hit that many of the products being used in developing-country programs were not meeting international standards of quality. In the 1980s, as immunization expanded in developing countries, regulation of vaccines was still in its infancy. Before then, even in the United States, vaccines were being produced primarily by public-sector institutions using generally old technologies that were often regulated by testing in the same branch of the government where they were produced.28 Not until 1972 in the United States did the Food and Drug Administration (FDA) take responsibility for the regulation of vaccines, and vaccine regulatory processes in other countries lagged even farther behind. In the 1990s, regulatory emphasis was more strongly placed on process, and guidelines for good manufacturing, laboratory, clinical, and even regulatory practices were elaborated and applied. At the same time, regulatory guidelines developed internationally, especially through the WHO’s Expert Committee on Biological Standardization (ECBS), came into wider use. Finally, the work of regional groupings, such as the European Medicines Agency and the ICH, has contributed to the existence of stronger and more harmonized guidelines for vaccine regulation. The work of the WHO to improve international vaccine quality has focused on the strengthening of national vaccine regulatory agencies (NRAs), with a primary focus on countries where vaccines are produced. The ECBS in 1991 and 1994 defined the activities needed for effective regulatory oversight, which were used to develop an assessment tool to help countries identify the gaps in their regulatory systems.29 As of 2003, 91 percent of the 192 WHO member countries, representing 74 percent of the annual birth cohort, were using vaccines overseen by a competent NRA.30 A new initiative, the Developing Countries’ Vaccine Regulators Network (DCVRN), was established in 2004 to support strengthening the regulatory process in member countries.31
Changes in the vaccine supply landscape.
The global public-sector market is now increasingly dependent on so-called emerging suppliers rather than multinational firms, partially because of the increase in quality, diversity, and capacity of developing-country manufacturers. A recent study of the vaccine market has shown sixty-five vaccine candidates of interest to developing-country immunization programs in the emerging supplier pipeline, compared with twenty-five for multinational corporations, although they are often at an earlier stage of development (Exhibit 3
TRIPS agreements. Traditionally, vaccine development has not been greatly affected by IPRs, because the complex manufacturing processes involved in consistently producing such complex biological products were more prone to protection of know-how than of IPRs.32 However, occasionally firms have had to spend more time and resources to invent around patents that are often overly broad.33 A 2005 WHO study of the vaccine industry indicated that a majority of developing-country suppliers still do not consider intellectual property aspects to be an impediment to vaccine R&D, although three of the fourteen manufacturers interviewed said that they could be a limiting factor, and half acknowledged needing assistance in dealing with the IPR issue.34 In contrast, Richard Mahoney and colleagues cite the significance of IPR management for collaborative research efforts and for ultimately making available new products, thus underlining their importance not only for investors but also for the public at large.35 Until now, however, there has been no clear demonstration of either an innovation-stimulating or -dampening effect of IPRs on R&D for developing-market vaccines. This situation could be changed drastically by the application of TRIPS agreements in the future. The management of such changes will require special attention to developing frameworks for licensing and technology transfer agreements, to promoting innovative vaccine development in developing countries, and to monitoring free trade agreements that might alter the impact of the TRIPS provisions. The role of international organizations in defining best practices, ensuring dissemination of information, and monitoring TRIPS impact will be crucial to guaranteeing equitable access to high-priority new vaccines in the developing world.36 Potential new communicable disease threats. The intentional use of B. anthracis as a bioterrorist weapon in the fall of 2001 in the United States prompted the development of improved anthrax vaccines, as well as of vaccines against other potential bioterrorist agents, such as smallpox. The recent cases of H5N1 influenza in humans have coincided with a major epizootic of avian flu in Southeast Asia and spreading to other parts of the world, because of a highly pathogenic H5N1 virus strain. Preparation for a potential flu pandemic is going on in many parts of the world.37 Bioterrorism and pandemic preparedness is more active in industrialized countries because of higher levels of financing available. This has already brought new funding into the vaccine business.38 Despite the immediate focus on the needs of industrialized countries, investment in biosecurity issues could indirectly have a positive effect on R&D for high-priority developing-market vaccines: Incentives to develop such security-related vaccines have included regulatory initiatives that could be useful for the development of innovative products for third-world diseases.39
The following are some suggestions for harnessing the positive outcomes of globalization to increase access to vaccines and to improve public health. Strengthen support initiatives in wealthy countries. Although the increasing globalization of disease has resulted in new funds for the vaccine industry, the challenge will be to ensure that this increased funding results in R&D for vaccines targeting global public health priorities, not just of vaccines for the most financially attractive markets. Some of the instruments and initiatives described above are aimed to do that: increased financing vehicles for developing-country immunization, such as the IFFIm, advance market commitments, and public-private partnerships targeted at specific diseases. Industrialized countries can play a critical role by responsibly supporting these initiatives. Improve the quality of regulation as a way to improve the quality of products. Donor governments and international organization have invested in support of vaccine production in developing countries in the past, but the history of high-quality vaccine production shows that strong regulation is essential. This cannot be done only through organizations of industrialized countries, such as ICH, but also by supporting efforts to improve regulatory progress and harmonization in developing countries. It is in the interest of all countries to ensure harmonized regulatory norms and standards that reflect evidence-based decisions. The DCVRN can contribute to good regulatory practices and harmonization with constructive participation by well-functioning regulatory agencies such as the U.S. FDA. Facilitate access to technologies. To promote development of vaccines for use in disease-endemic countries, industrialized countries can act on three fronts: (1) make available to developing countries and to developing-country manufacturers critical technologies developed through public-sector research; (2) avoid TRIPS-plus and free trade agreements that will limit access to such key technologies, processes, and products in the developing world; and (3) improve understanding and management of IPRs in developing countries to stimulate vaccine R&D in the context of increased vaccine access. Go beyond immediate domestic issues in health policy. Although the focus in dealing with the disease threats directly linked with globalization, such as bioterrorism and pandemic agents, has been domestic to date, new mechanisms have been introduced into the public process that might help promote access to high-priority vaccines in the long run—such as Bioshield provisions for accelerated regulatory approval, research on pandemic flu vaccines, and models of advance purchase commitments. However, countries such as the United States can play a role in ensuring the availability of more accessible public health tools to the rest of the world. ALTHOUGH THE IMPACT of globalization on vaccine-preventable diseases can reinforce the current overwhelming focus on needs in industrialized countries, the opportunity and tools are available for public health and bilateral agencies to change this trend and to harness the positive outcomes of globalization for the benefit of public health in the developing world.
Julie Milstien (milstien{at}medicine.umaryland.edu) is an adjunct associate professor at the Center for Vaccine Development, Department of Geographic Medicine, at the University of Maryland School of Medicine; she is based in Montpellier, France. Miloud Kaddar is a health economist in the Department of Immunization, Vaccines, and Biologicals, World Health Organization (WHO), in Geneva, Switzerland. Marie Paule Kieny is director of the WHO Initiative for Vaccine Research, also in Geneva.
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