The Highly
Profitable Business of Vaccines
Exactly how the swine flu story will play out remains to be
seen, but there is one business sector that may secretly be hoping
for the worst -- vaccine manufacturers, that are more than $1
billion richer, a number that will soar far higher if, in fact, the
winter outbreak is as bad as many fear.
Halo-worthy as vaccine makers may seem, the truth is that Big
Pharma is motivated by more than a desire to save humankind, given
the enormous profit potential from a successful vaccine. New
blockbuster products and manufacturer-friendly legislation have
combined to make the global vaccine market even larger and more
lucrative than ever. In fact, the vaccine market is growing even
faster than the market for regular pharmaceutical drugs, bringing
in as much as $20 billion or more, by some estimates. That’s
because the markup on vaccines is larger than on pharmaceutical
drugs, making them especially profitable. However, as the use of
vaccines has expanded exponentially in recent years, so have
concerns regarding their safety and efficacy.
Vaccine Risks
Vaccines have enabled us to take major steps forward in public
health, virtually eradicating devastating diseases, such as polio
and smallpox, says Larry Sasich, PharmD, MPH, an assistant
professor of pharmacy practice at the Lake Erie College of
Osteopathic Medicine (LECOM) School of Pharmacy in Erie,
Pennsylvania. But vaccines are drugs, he points out, and all drugs
carry some risks. Though rare, vaccines have been known to cause
seizures, brain damage and even death.
In the early 1980s, consumers deluged manufacturers with
lawsuits, most especially parents whose children had suffered
complications after inoculation with the problematic DTP vaccine
(immunization against diphtheria, tetanus and pertussis, or
whooping cough). Fearing the public health consequences if vaccine
makers responded by reducing production or pulling out of the
market altogether, the federal government passed the National
Childhood Vaccine Injury Act of 1986 to shield manufacturers from
liability.
Legislated Protection from Liability
The 1986 act created the National Vaccine Injury Compensation
Program (VICP), which protected vaccine manufacturers from lawsuits
and set compensation standards for people injured by their
products. For example, compensation for vaccine-related deaths is
limited to $250,000 -- a fraction of what might be awarded by a
jury in a civil trial if, say, a child had a fatal vaccine
reaction. In truth, this amount of money is like pocket change to
drug companies, and they aren’t even the ones who must pay up --
the federal government writes the check. This protection may help
get important vaccines to market faster, but it doesn’t do much to
ensure safety, because vaccine manufacturers are shielded from
consequences for products that turn out to be problematic or even
dangerous.
Also, vaccines are genetically engineered and competitors are
forbidden by law from duplicating them. This gives manufacturers a
virtual monopoly on their products. Since they never have to face
competition, biologic-based vaccines continue to generate big
profits for years and years and years.
Gardasil: A Cautionary Tale
Protecting manufacturers this way puts consumers at risk. In
2006, for example, despite sparse data to support its safety and
effectiveness, Merck introduced and aggressively marketed Gardasil,
a new vaccine designed to protect girls and young women from
cancer-causing strains of the human papillomavirus (HPV). Among
their questionable marketing tactics, the firm gave hundreds of
thousands of dollars in "grants" to medical associations to develop
educational materials promoting the vaccine. Even worse, Merck made
substantial campaign contributions to state legislators -- as it
lobbied them to make Gardasil mandatory for girls attending public
schools.
Yet, this vaccine doesn’t vanquish a deadly disease such as
polio or smallpox. Rather it protects against four viruses that
comprise 70% of the HPV strains that cause cervical cancer -- and
even if they’ve received the vaccine, women still require regular
screening for the disease. While study results published in the
August 2009 issue of Journal of the American Medical
Association (JAMA) note that Gardasil has a safety record
in line with that of other vaccines, serious complications
(including an increased risk for potentially fatal blood clots)
have been reported. Gardasil is also painful and painfully
expensive. The three-shot series costs $400 to $1,000, which is
only sometimes covered by insurance, and last year brought in $1.4
billion in sales for Merck... amazing, given that there’s no
evidence yet how long immunity will even last or whether booster
shots will prove necessary. Thus far, the vaccine has been
successful in preventing HPV infections that precede cervical
cancer, but since this type of cancer takes years to develop, only
time will tell whether Gardasil protects against cervical cancer
itself.
Moving Forward: The Debate Continues
Even in the face of a pandemic, it remains impossible to reach a
consensus regarding vaccines and whether they should be mandatory.
Consumer advocates argue for greater regulation and higher
standards (e.g., for new vaccines and other drugs, medical devices
and procedures), while industry insists that government should keep
its hands off. As for the vaccine shield protecting Big Pharma from
liability, some legislators talk of getting rid of it while others
say it should be strengthened.
Dr. Sasich told me that he personally believes that vaccines
have the potential to do enormous good for society and that the
vaccine shield enables science and technology to move forward
faster and more efficiently. While I agree that many immunizations
save lives, I am skeptical about some of the more recent entries
into the vaccination arena, such as Gardasil. Perhaps manufacturers
need a stick as well as a carrot -- financial responsibility for
failures as well as windfall profits for success -- to motivate
them to ensure that vaccines are safe, necessary and effective
before introducing them on a large-scale basis to the American
public, much less making them mandatory.