The market for vaccines has rebounded significantly after years of stagnation, triggered by the launch of novel, high price vaccines against pneumococcal infections and human papillomavirus. So much so that the sector is expected to nearly quadruple in size to $16 billion by 2016, claim analysts at Datamonitor.
But there are still issues at stake. Wyeth’s Prevnar for pneumococcal infections and Merck & Co’s cervical cancer (HPV) vaccine Gardasil have experienced a rapid uptake because of the broad medical need and their acceptance onto routine vaccination schedules, but other vaccines such as Merck & Co’s RotaTeq have not been so lucky because of their unfavourable cost-benefit profile. With healthcare providers working on increasingly tight budgets for vaccinations, vaccine manufacturers need to focus on real medical needs and raising public awareness to ensure commercial success.
Says Datamonitor vaccines analyst Hedwig Kresse: “Driven by the promising commercial potential of new, high-price vaccines, the pediatric and adolescent vaccines market will grow from approximately $4.3 billion in 2006 to over $16 billion by 2016 across the US, EU-five and Japan.”
Prevnar was launched in the US in 2000 as the first infant vaccine protecting against seven serotypes of S. pneumoniae,which can lead to pneumonia and meningitis. Prevnar has experienced a rapid uptake globally and has been integrated into routine childhood vaccination schedules in the US and EU-five soon after launch despite its high cost of nearly $320 for the four-dose regimen, with global sales reaching almost $2 billion in 2006 - making it the first vaccine to attain blockbuster status, Kresse says. “Although Prevnar was the first childhood vaccine priced at a significant premium, the large clinical need to protect infants against invasive pneumococcal disease, which can lead to severe illness or death in small children, justified its widespread introduction for healthcare providers. As a result, the product has become a huge commercial success for Wyeth,” she says.
Now Wyeth and GlaxoSmithKline are developing develop higher valent candidates, which will protect against a larger number of S. pneumoniae serotypes. These vaccines are expected to reach the market from 2009 and are likely to further extend the commercial success of the class, Kresse says. “Datamonitor expects the total value of the infant market for pneumococcal vaccines to increase to $2.3 billion by 2016 across the US, EU-five and Japan.”
Huge potential for cervical cancer vaccines
In June 2006, Merck's Gardasil was the first vaccine to be approved for preventing HPV infection, a pathogen which is causatively linked to the development of cervical cancer. GSK’s competing product Cervarix received EU approval in September 2007. Their approval generated huge public attention and resulted in significant pressure on healthcare authorities to make the $360 three-dose Gardasil regimen widely available to teenage girls.
Although most cases of cervical cancer in the developed world can be prevented through the existing pap smear screening programs, the expensive HPV vaccination has been recommended and is reimbursed for teenage girls across the US and Europe. “The widespread publicity has led to a good uptake in the target group of adolescent girls, which is usually hard to reach for vaccination. As a result, Datamonitor sees a huge commercial opportunity in HPV vaccines, with annual cohort sales of $1.4 billion in teenage girls for the seven major markets by 2016 and a cumulative catch-up opportunity in young women aged 13-26 that could add up to over $17 billion until 2016," notes Kreese.
RotaTeq, a vaccine providing protection against rotavirus diarrhea, which usually affects infants under the age of two, was introduced by Merck & Co. in the US in 2006 and is marketed at a price of $200 for the three-dose regimen. In the same year, GSK launched its competitor, Rotarix in the European market at a similar price. Although both vaccines have been shown to be efficacious and safe, their uptake has been limited so far, since many countries refuse to integrate rotavirus vaccination into their routine vaccination schedules for cost-benefit reasons, Kresse says. “In the developed world, rotavirus diarrhea is rarely severe for small infants and quick and efficacious treatment is already available. Consequently, healthcare authorities see no need to widely introduce a very expensive vaccine.”
Datamonitor therefore expect total annual sales to remain limited to approximately $1 billion for rotavirus vaccines across the seven major markets by 2016. The US will account for the majority of sales, being the only nation among the seven major markets that has recommended rotavirus vaccination for all infants.
“The real need for those vaccines exists in the developing world where, without access to clean water, rotavirus diarrhea can often be fatal. However, in the third world, the cost of the vaccine becomes an issue,” she says.
The crucial factor for success in the pediatric vaccines market remains the introduction of a product into national vaccination schedules. Along with reimbursement, this virtually guarantees the rapid uptake and continuously high coverage rates in the target population. At the same time, the new premium-priced vaccines multiply the costs of infant vaccination and pose a significant challenge for budget-constrained healthcare authorities and providers, Kresse says. “Given the lack of awareness about both the severity and costs associated with preventable childhood diseases as well as the benefits and safety of vaccination, vaccine manufacturers need to focus on real medical needs as well as on improving public education in order to ensure commercial success for their products.”