Although vaccines only represent two percent of the overall pharmaceutical market, they have become the darling of many drug manufacturers’ portfolios over the past few years. Several major events and technological innovations—from the H1N1 “swine flu” pandemic of 2009 to the development of the first cancer vaccine Gardasil—have focused a great deal of attention on vaccines by the media and manufacturers alike.
Currently there are over 20 diseases that can be prevented with vaccines. The market for these is growing through the expansion of programs to immunize populations, as well as the growth and aging of the population. But there are also exciting new vaccines in development both prophylactic and therapeutic, which will treat or prevent a host of diseases that up until today have not had any corresponding vaccines.
SIZE AND GROWTH OF THE MARKET
With vaccines continuing to be the big success story for the pharmaceutical industry, the world market for preventative vaccines reached $22.1 billion in 2009, up from $19 billion in 2008. Kalorama Information predicts the market will increase at a compound annual rate of 9.7% during the next five years, reaching $35 billion by 2014, as new product introductions continue and the use of current products expands further.
Vaccines are a powerful tool in the campaign to reduce healthcare costs. It is estimated that every dollar invested in vaccinations returns between $7 and $20 in averted healthcare costs associated with vaccine-preventable diseases.
PEDIATRIC AND ADULT MARKETS
Vaccines are commonly segmented into two target markets, adult and pediatric. The pediatric vaccine market is larger, accounting for 52.2% of the total market in 2009. Pediatric vaccines are also growing at a faster rate than adult vaccines and this is expected to continue over the next five years, at 11.0% and 8.2% per year, respectively.
Pfizer’s pneumococcal vaccine Prevnar and “combination” DTaP vaccines are driving growth in the pediatric sector, while influenza and hepatitis vaccine products are driving sales in the adult segment of the market. Future growth in adult vaccines will be driven by the increased acceptance of vaccines as an important healthcare tool and by the introduction of new products.
In 2009, influenza vaccines generated $4.8 billion in revenues, up 49.2% from 2008 sales of $3.2 billion with the introduction of new H1N1 swine flu vaccine. Revenues in this segment of the adult vaccine market are expected to grow at a compound annual growth rate of 8.0% between 2009 and 2014 with the rising utilization of influenza vaccines, particularly in the United States.
Several developers have since introduced other vaccines that prevent against H1N1 and GlaxoSmithKline launched pandemic and a pre-pandemic vaccine products. This contributed to very strong growth of influenza vaccines during 2009.
Adult immunization is an important, but frequently overlooked, part of patient care. Vaccination programs typically focus on children, yet adults in industrialized countries are more likely than children to die as a result of vaccine-preventable diseases.
Vaccination protects not only individuals, but also entire communities from diseases spread by person-to-person transmission. For example, it can prevent about 50% of deaths from pneumococcal disease and 80% of deaths from influenza-related complications in the elderly. Pharmacoeconomic studies have demonstrated the value of influenza and pneumococcal vaccines, yet immunization rates for these diseases continue to be low in elderly populations.
The worldwide vaccine market is dominated by five major competitors: Merck & Co, GlaxoSmithKline, Sanofi Pasteur, Pfizer, and Novartis, which together held 83.7% of the market in 2009. All but Pfizer and Merck posted strong double digit growth. These companies have made earning a greater share of the vaccine market part of their marketing and research strategies.
GlaxoSmithKline is in the lead with nearly a quarter of the world market in 2009, largely due to its influenza products Fluvarix and Hiberix. Sanofi Pasteur followed with an 18.9% market share based on continued strong growth, particularly in influenza vaccines. Merck, which led the market in 2008, took third place with a 16.4% share. Pfizer, which offered just one product, was fourth with a 13.1% share, while Novartis was fifth with 10.8% of the market.
KEY TRENDS AND ISSUES
Vaccine shortages and delays have plagued the U.S. and other countries for years, and continue to do so. Such shortages can occur for many reasons including a limited number of manufacturers in the vaccine market, manufacturing or production problems, insufficient stockpiles, and (in developing nations) greater medical need than ability to pay for vaccines.
In early 2009, for example, at least six unvaccinated children in Southeastern Pennsylvania were infected and two died in the largest recent outbreak of Haemophilus influenzae type b (HIB) in the United States. While HIB was virtually eradicated in the United States about 20 years ago, the recent outbreak has been tied to a vaccine shortage that removed enough of the protective effect of widespread immunizations to make unvaccinated children more vulnerable. In December 2007, Merck withdrew 1.2 million doses of PedvaxHIB because of a possible contamination of its equipment in West Point, Pennsylvania.
Many vaccine manufacturers have abandoned the field over recent years, leaving only the above mentioned five major vaccine manufacturers to produce the world’s vaccine supply. The general consensus is that future vaccine shortages could be avoided by amending current regulatory policies that discourage companies from investing aggressively to develop new vaccines.
Bioterrorist threats are being addressed by a small number of developers working on vaccines to combat potential bioterrorist threats. These include products that prevent against infection by anthrax, smallpox and tularemia. Leading developers of alternative products now include PharmAthene. In September 2008, the company received $83.9 in NIAID funding to develop SparVax. Phase I and II clinical trials, involving more than 700 healthy human subjects, have shown SparVax to be well tolerated and induce an immune response to anthrax with only three doses. As of mid 2010, testing was ongoing. Bavarian Nordic is also conducting preclinical evaluations of an anthrax vaccine candidate.
Needle-free vaccines are being developed by researchers around the world and it is likely that at least one new delivery system will be introduced commercially in the next five years. Edible vaccines, mucosally delivered vaccines, intranasal vaccines, vaccine patches and vaccine chips are all under development, with the latter expected to be commercialized within the next several years. Chips are a novel method of vaccine administration, having been pioneered by scientists at Kyoto Pharmaceutical University in Japan. In early 2010, researchers there announced that the new chip delivery system was expected to become available in Japan by 2012.
Production techniques are an important but overlooked area of vaccine development, as improvements in production methods can significantly impact both speed to market and cost. Tobacco plants, insects and nanoparticle systems all offer a means to produce vaccines more quickly and cost effectively than using chicken eggs. Of these, tobacco plants offer the greatest immediate potential, with production scale up expected within the next five years.
Kalorama Information forecasted a high growth rate for vaccines over the past few years and market events have matched these predictions. The vaccine business is not without its risks, but for some companies, vaccines were the only bright spot in their portfolio in 2009. It’s not a surprise therefore that development is heavy in this sector, and we can expect a flow of novel vaccines to enter the market over the next few years, some of which will target diseases that have not been treated with vaccines before. All in all, it is a very exciting time in the market for vaccines.