The world is on the verge of a new “golden age” of vaccines innovation and development, but this opportunity may be lost because of governments’ relentless pressure to reduce health care costs without regard for the long-term consequences, a leading academic has warned.

As the largest purchasers of vaccines, governments can exert downward pressure on prices, and with costs increasing faster than prices, vaccines can rapidly become commodities with a low profit margin, according to Louis Galambos, professor of economic and business history at Johns Hopkins University in the USA. Last time this “commoditisation” of the market occurred, the number of major vaccine producers dropped sharply, he warns in a new report.

The factors pointing to the dawn of a new era of expansion and innovation for the global vaccine enterprise are not to be found in the public sector; they are arising from the lower levels of innovation in pharmaceuticals and the new science and technologies flowing from biotechnology and the molecular genetic revolution. “This push and pull has edged some of the world’s largest pharmaceutical firms back into a business they formerly eschewed,” says Prof Galambos.

However, despite this promise, he points out that nothing has been done in the UK or USA to remove the threat to the industry’s ability to develop the innovations needed and ensure adequate supplies of vaccines - nor is any such development likely. Margins will remain tight and may become tighter, and pressures to reduce health care costs in both nations are likely to continue for many years, he says.

Nevertheless, he believes that helping to ensure a “golden future” for this wing of preventive medicine can be achieved through:
- continued support for the basic science that has been a necessary foundation for success in vaccines R&D;
- countering poorly-conceived attacks on the industry from politicians and others which fail to take account of the long-term objectives of developing further vaccines for the benefit of humanity; and
- promoting attitudes in governments and health agencies that look beyond short-term budgetary savings to longer-term health needs.

Prof Galambos believes the first of these proposals can be achieved in both the USA and the UK without radical changes in either the public or private sectors, while the second calls for statesmanship and greater political collaboration, “both of which are likely to be in greater supply in the UK than in America.” The third measure will be the most difficult to achieve in the foreseeable future; the problem has been well-defined for over two decades, but the solution may require more transparency, industry-government collaboration and compromise than either nation is capable of mustering, he warns.

North America is still the largest single market for vaccines, and while Europe represents only a third of global sales, it accounts for almost 90% the world’s production of vaccines and two-thirds of R&D in the sector. Nearly all European investment in R&D comes from the private sector and is focused on new vaccines, says Prof Galambos.

The report is available from the Association of the British Pharmaceutical Industry.