Podcast: Two Cents' Worth
Worth a shot? The economics of the vaccine race
All over the world, scientists, pharmaceutical executives and government officials are working feverishly with one goal in mind - finding an effective vaccine for Covid-19 and then making billions of doses of it.
The hunt for a vaccine is perhaps best epitomised by President Trump’s Project Warp Speed, an effort to fast track the vaccine development and manufacturing effort, with billions granted by the US Government to pharmaceutical companies such as Johnson & Johnson, Moderna and AstraZeneca, to produce a vaccine and supply hundreds of millions of doses, for US citizens.
Other governments have struck similar deals with pharmaceutical and biotech companies to secure vaccine supply for their citizens. Our own government has committed $37 million to local efforts in vaccine R&D as well as funding international bodies that are coordinating work on vaccines and working to ensure the poorest countries don’t miss out when successful vaccines are available.
The mobilisation of government and industry to find a vaccine, which Trump has described as “unlike anything our country has seen since the Manhattan Project”, is already producing innovative approaches that could forever speed the pace of vaccine developments.
The vaccine gamble
The quickest development so far was for the mumps vaccine which was licenced in 1967 after four years of effort. But vaccines typically take much longer to gain regulatory approval and the whole process can cost as much as $1 billion.
With over 90 per cent of vaccine candidates failing to make it to market, it is a high-risk endeavour. Indeed, it explains why pharmaceutical companies invest relatively low amounts in vaccine development compared to the drugs and treatments that can be patented and provide lucrative revenue streams for them.
“When you think about the pharmaceutical market, its essentially a trillion dollar market globally,” said Dr Shivali Gulab, the chief executive of Avalia Immunotherapies, a company set up to commercialise biotechnology from the Malaghan Institute and the Ferrier Research Institute, both based in Wellington.
“Revenue from vaccines makes up about five per cent of that,” added Gulab, who is based in New York, a city that until recently was a hot spot of Covid-19 infections and fatalities.
Given the significant government and philanthropic funding going into Covid-19 vaccine development, she expected the drug companies to honour their pledges to deliver successful vaccines on a not for profit basis.
Johnson & Johnson, for instance, has estimated the cost of delivering a Covid-19 vaccine at US$10 per dose. With a goal of producing one billion doses. That would equate to $10 billion in revenue for Johnson & Johnson, which is the most profitable pharmaceutical company in the world, with net income of US$16.3 billion last year.
But there is little transparency around the actual costs of the vaccine development process for companies. Many of these publicly listed companies have seen their share value increase and the government-funded accelerated R&D push will advance their own profit-driven interests.
Gulab pointed to Moderna, the Massachusetts-based biotech company that received a share of around US$2 billion in funding the US government has granted five pharmaceutical companies that are in the hunt for a vaccine.
Moderna is taking a novel and potentially safer and quicker approach to vaccine development, involving using messenger RNA, molecules in our body that carry instructions to our cells to make proteins.
This method could teach our cells to fight the virus and prove an alternative to the traditional vaccine method, which involves introducing an inactivated or weakened form of the virus into the body and teaching the immune system to respond to it.
“If it does get on the market that’s obviously going to be great for their overall RNA platform and it is going to open the door to many other companies that are developing RNA candidates,” said Gulab.
She joined a group of New Zealand scientists in publishing an article in the New Zealand Medical Journal in April calling for a fast-tracked local effort around vaccines that could see the country gear up to mass produce a Covid-19 vaccine.
That’s never been done here before on a large scale, other than for animal vaccines. But the scientists see it as a way of combating vaccine nationalism, which will likely see countries favour their own citizens with doses before distributing them elsewhere.
“We could licence the manufacturing protocols for one of the leading candidates once it makes it to market, we could manufacture it for New Zealand. We could also then be able to manufacture it for other countries around the world,” said Gulab.
Government funding announced following May’s Budget allocates money towards exploring the options for manufacturing and even developing our own vaccine candidates locally. The latter would be a major undertaking, but wouldn’t have to necessarily be done from scratch, with a New Zealand effort likely to build on the work of internationals teams that are working on at least 120 vaccine prototypes, 13 of which are already in clinical trials.
At the same time, the government has set aside $15 million of that vaccine funding to go to international groups GAVI, the Vaccine Alliance and CEPI, the Coalition for Epidemic Preparedness Innovations. While the funding to GAVI will aid the effort to get Covid-19 vaccines to poor countries as quickly as possible, CEPI is heavily invested in the vaccine development process and providing much-needed coordination across the globe.
Both organisations are heavily funded by the Bill & Melinda Gates Foundation, a major player in vaccine development in general, with billions invested from the couple’s Microsoft fortune in treatments for HIV and and malaria.
For Associate Professor Helen Petousis-Harris, one of the country’s leading vaccine efficacy and safety experts, based at the University of Auckland, investing in local vaccine development and manufacturing capability is a sound plan.
Building up our vaccine candidate evaluation capability would also provide a useful safety function. While warp speed development is crucial given the accelerating spread of the virus in parts of the world, it will also mean that clinical trials of Covid-19 vaccine candidates will likely be of shorter duration and involve less participants than vaccines traditionally have.
But that doesn’t mean they will pose a safety risk. In 2004, New Zealand rapidly deployed the MenZ B vaccine to control an epidemic of meningococcal disease.
“We only had a very limited number of people in the clinical trials, only a few thousand. In order to roll it out we had to implement an intensive monitoring system that was gold standard and could detect any problems almost in real-time if they arose,” said Petousis-Harris.
A similar system could accompany the rollout of a Covid-19 vaccine.
But Petousis-Harris has concerns that our health system isn’t geared up to distribute the vaccine once it gets here. After all, around 5 million people will need to be vaccinated to prevent future community transmission of the virus. If the successful vaccine requires multiple doses, the task is even greater.
She said the recent measles outbreaks were a warning sign for the government.
“That highlighted so many problems with our current systems that have been worn down.”
Ultimately, Petousis-Harris sees the effort to develop Covid-19 vaccines as having potential to change how vaccine development in general is undertaken, which may address the fragile nature of global pandemic preparedness efforts.
Changing the model
“One of the good things that comes out of this, I hope, is that the vaccine development landscape is forever changed,” she said.
“Because we had a model that wasn’t working when it came to lower and middle income countries but also emerging diseases. We could never be reactive enough.”
At Avalia Immunotherapies, which is working on treatments for chronic hepatitis B, malaria and virus-associated cancers, Gulab and her team now also have Covid-19 in their sights.
“We’ve been thinking about taking a broader approach, looking at past coronaviruses like MERS, the first SARS coronavirus, and thinking more broadly about a pan coronavirus candidate,” she said.
“It’s early days, but we are looking at a potential international collaboration there.”
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