Drug Companies Shift Emphasis to Vaccines

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Drug Companies Shift Emphasis to Vaccines

http://articles.mercola.com/sites/articles/archive/2010/02/16/drug-companies-shift-emphasis-to-vaccines.aspx

 

by Dr. Mercola

 

 

 

 

The extent to

which the recession has cut into high-value research and development jobs in

the pharmaceutical industry will be apparent soon as job losses in the industry

climb to an additional 12,000.

GlaxoSmithKline

(GSK), the British drugs group, will announce plans for further restructuring

with the loss of 4,000 jobs, nearly half in the research and development

departments.

The job

attrition reflects widespread unease among drug companies about the loss of

revenues from a small number of blockbuster medicines.

For example,

this year GSK will lose patent protection for Seretide, an asthma treatment

worth $4 billion.

GSK started

reshaping its business in 2007 by focusing on three areas: vaccines,

over-the-counter medicines and non-medical products, and emerging markets. GSK

diverted investment away from pure research and toward products that enabled

the company to catch a greater share of the consumer dollar.

However, GSK

is not the first drug company to announce job cutbacks and realignment of their

target markets, with a path toward vaccines. Novartis, Merck, Pfizer, Novartis,

and Sanofi Pasteur are just a few of the Big Pharma members that have done this

within the past two years.

And while the

recession definitely played a part in this, the truth is, plans to switch to

the vaccine market were already in place, long before the recession began.

 

Sources:

 

The Times Online

February 1, 2010

 

The-infoshop.com

 

 

Nature.com April

1, 2009

 

 

 

 

 

 

 

 

 

 

Dr. Mercola's Comments:

 

 

 

 

 

 

 

 

 

If nothing else, this

announcement proves what I’ve been saying all along – that,

contrary to what they’d like you to believe, vaccine makers are not

philanthropists just looking to do benevolent philanthropy for the world with

their products.

They are businesses, first and foremost, whose primary goal

is to earn profits for their stockholders.

It has become

clear to me that there is a major shift occurring. It is becoming increasingly

difficult to find new blockbuster drugs so the new emphasis will be on

introducing more and more mandated vaccines which provide nearly unending

annuities to continue to increase their revenues

You will see

more and more vaccines introduced as time goes on.

The

Big Picture

Please remember that collectively the drug cartels make over

half a TRILLION dollars every year by selling their product. That amount of

money yields enormous power and leverage and they are focused on earning even

more.

And how do

they do that?

By finding a

product they can manufacture in massive quantities and sell to infinite numbers

of people at whatever price they want to charge. For a long time, psychotropic

drugs and therapeutic medicines were the yellow brick road to that Wall Street

goal.

Just a few

years ago drug giants like Merck, Eli Lilly, GlaxoSmithKline, and Astra Zeneca

were dancing in the land of Oz with blockbusters like Vioxx, Zyprexa, Paxil,

and Seroquel. But when the Emerald cities they’d built with these drugs

became blighted with a cyclone of lawsuits, their profits quickly began to

melt.

Add in pending

expirations of patents on key products, and accusations

by the European Commission that they purposely delay generic medicines by

offering payments to rival manufacturers, and these companies knew they had to

change the road they were on, even before the recession hit.

It’s

All about the Money

The line up of

Big Pharma companies that have been announcing job cutbacks and realignment of

their product lines over the past two or three years is impressive:

Novartis announced in December 2007

that it planned to cut 2,500 jobs worldwide by 2010 in an attempt to save $1.6

billion. Citing expiring patents, generic competition, and increased industry

costs, Novartis said that poor US

pharmaceutical sales had forced this reorganization.

Noting that it

had experienced “strong growth” in its vaccines and diagnostics

division, Novartis said it planned to expand its presence in emerging markets

in Africa, Central Asia and Southeast Asia.

Merck announced

job cuts in its US

sales force a month ago, saying that the cutbacks were part of its merger with

Schering-Plough. In all, the newly married company plans to reduce its global

workforce by 15 percent, for a savings of nearly $3.5 billion.

But even

before Merck and Schering-Plough became a couple, Merck had already begun

making job cutbacks, as part of its 2005 restructuring plan.

A major focus

of that plan, Merck told

its stockholders in 2005, would be to enter, and become a leader in,

emerging markets, which “provide enormous opportunity” for

Merck’s medicines and vaccines.

Saying that

the company planned to rely less on US markets and more on global initiatives,

Merck told Nasdaq in December 2009 that 40 percent of its job cuts would be in

the US, as the company moved its market focus to worldwide ventures.

But Merck and

GSK aren’t

the only ones to take this route: Johnson & Johnson announced in

November 2009 that it was cutting 8,000 jobs.

Pfizer said it

was cutting 20,000 jobs, or 20 percent of its workforce, as part of its merger

with Wyeth; Eli Lilly said it was making a 13 percent reduction totaling 5,000

jobs; Astra Zeneca it was cutting 7,000 jobs, or about 10 percent of its

workforce.

But

simultaneously with job cut announcements, they all have alluded to, or plainly

said, emerging markets are where their new focus lies.

Of course,

it’s all about the money and the bottom line – which isn’t a

bad thing, since these companies are for-profit entities. But what is this thing,

“emerging markets,” anyway, and how do drug companies’

desires to follow emerging markets affect the rest of the world?

Emerging

Market ‘Inoculations’

The Wall Street

Journal probably said it best when it called this new pharma marketing

strategy emerging market inoculations. Referring

to Novartis’ purchase of an 85 percent stake in a Chinese vaccine maker,

and a similar investment by Sanofi Aventis, the WSJ used this term to describe

the drug companies’ plans to expand production and sales in vaccines.

Emerging

markets are areas of the world that are beginning to show promise as a

profitable venture for many products, including vaccines. And emerging markets

– primarily in developing countries in Southeast and Central Asia, and Africa – have been on vaccine makers’ radar

for quite some time.

One reason

that vaccine makers are interested in these parts of the world is that

that’s where most of the world’s deaths from major infectious diseases

occur.

World health

leaders have long believed that most, if not all, of these diseases could be

prevented by vaccines.

The only

problem has been that, until recently, making vaccines for undeveloped

countries with no money to pay for them, was not exactly a profitable goal for

vaccine makers.

In 2001, an article in Tropical

Medicine & International Health chastised the

pharmaceutical industry for thinking too much about the bottom line, and not

investing more in neglected diseases. Accusing them of being more interested on

return in investment than in global health needs, the article’s author

urged drug companies to re-evaluate their priorities.

It also urged

national and international reorientation of public health policies:

“New

and creative strategies involving both the public and the private sector are

needed to ensure that affordable medicines for today's neglected diseases are

developed,” the article said.

The article

made several suggestions as to how these new policies could come about, from a

legal and regulatory standpoint, as well as from research-and-development and

distribution of needed drugs for mainly third-world countries.

And

Then Something Changed

Fast-forward

to February 10, 2010. Suddenly, third-world countries are exactly where the

previously maligned drug companies want to be. In a market

study released this month, these companies said that vaccines are the new

bottom line.

“The

developed world has been the initial focus of vaccine makers due to the better

healthcare and higher price levels,” the report said. “However,

facing increasingly saturated markets in the West, companies are looking to

expand into new geographies, such as Asia's

emerging markets.”

You have to

purchase it to see the complete study on emerging markets. But GSK has its May

2009 emerging

market plan posted, free, on the Internet. Listing the top 10 countries

that are “big and growing fast,” GSK said these countries represent

85 percent of emerging market potential.

Emerging

markets will soon outgrow developed markets by hundreds of billions of dollars,

the GSK report says. One way to make that happen will be to “build and

capture” the vaccine market, the report explains.

And the way to

do that, it goes on to say, is through growing

government attention to the public health agenda, capitalizing on birth cohorts

for pediatric vaccines, and by concentrating on new vaccine products.

Say

‘Hello’ to Advance Market Commitments

So what happened

between 2001, when world health leaders were criticizing drug makers for not

making exactly this kind of investment, and the past couple years, when vaccine

makers suddenly started beating a path to third-world countries?

I can assure

you it wasn’t because the 2001 chastisement shamed them in to it. Rather,

I can just about bet next week’s paycheck that it had more to do with the

promise of a new bottom line – sales of vaccines through something called

Advance Market Commitments – than anything else.

Between 2001

and 2005, several vaccine researchers and market developers responded to the

2001 chastisement by writing numerous articles about why drug companies were

getting out of the vaccine business. Declining markets, increased costs, and

regulatory issues were the top three reasons.

Fix

those problems, and everybody would be happy to concentrate on vaccines for

developing countries, the responses all said.

Concerned that

developed countries would have little or no resources for addressing serious infectious

diseases if vaccine makers continued their pull-out, the World Health

Organization and the G8 – the top developed countries in the world

– responded with a plan for inducing vaccine companies to stay in the

business.

That plan was

called Advance Market Commitments. Under AMCs, developed countries make legal,

binding agreements to purchase vaccines that are needed in low-income

countries. The purchase guarantees a bottom line for the manufacturers. In

return, the manufacturers promise to sell those vaccines at reduced prices in

the countries where they are most needed.

Dozens

of New Vaccines in the Pipeline

Do an Internet

search on Advance Market Commitments and you will find a whole new vaccine

world you most likely didn’t know existed. Start by going to the WHO

website, and by reading its August 2007

draft global policy on AMCs. The document focuses on financing and funding

health research and development of drugs, vaccines and diagnostics for

neglected diseases.

The WHO

acknowledges in this document that private, public and not-for-profit donations

and investments have helped fight neglected diseases – infections that

are prevalent in mostly low-income, third-world countries. But those

investments are not enough, the WHO says. And that is why AMCs are necessary,

the WHO says.

It sounds like

a good plan: Establish a market that heretofore was considered not profitable

and, therefore, not worthy of investing in. Promise incentives to lure vaccine

makers in to the research and development of new vaccines. And then, stimulate

market competition through increased sales and reduction of costs in vaccine

programs.

To show how

well it could work, a pilot Advance Market Commitment was launched in February

2007 for pnuemococcal vaccines. In June 2009, the WHO and the GAVI announced that that plan

had finally come to fruition. Now, thanks to AMCs, a $70 pneumococcal vaccine

can be distributed in desperately poor countries for just $3.50.

Sounds like a

win-win situation – at least for vaccine makers and the countries where

the vaccine’s going.

Serious

Concerns about this Program

The reason

I’m wary of this plan is that legally binding, advance market commitments

to purchase vaccines that are mostly needed in third world countries could

backfire on developed countries that don’t need – or want –

certain vaccines.

Think about

it: The top neglected diseases that world health leaders want to address with

AMCs besides pneumonia are HIV-AIDS, malaria, human papilloma virus (HPV),

rotavirus, and tuberculosis.

And what do

you see?

Standing out

big and clear are HPV and rotavirus – two diseases that are relatively

rare in the US

and other developed countries. (There are over 100 HPVs; the new vaccines

address four HPVs that cause 70 percent of cervical cancer and genital warts.

In developed countries, death from cervical cancer is very rare, while in third

world countries, it is a leading cause of death in women.)

Yet, these are

diseases with new vaccines that, for some reason or other in the past few

years, have been recommended by the US Advisory Committee on Immunization Practices

for babies (rotavirus) and adolescents (HPV).

While the ACIP

only recommends vaccines, states are free to do what they choose, and we all

know where that leads: to mandates of vaccines that more and more people are

beginning to question the need for.

And

that’s why I am leery of vaccine makers who announce they’re on

their way to third world countries in an effort to boost their bottom line. I

don’t fault any profit-driven business for wanting to do things that will

make share holders happy.

But I do

question where these ventures are headed.

Many

scientific journal reports have already revealed that a malaria vaccine is on

the verge of being marketable. It only leaves me wondering if that will be the

next one on the ACIP’s list.

So stay tuned.

 

Dozens of

other vaccines are in the pipeline, from one for strep throat to another for

simple ear infections. I promise this won’t be the last you hear of AMCs

and mandated vaccines in the US – what better way is there to

“guarantee” a vaccine market than through mandates to help pay for

it?