Vaccines are very profitable today/ Atlantic

In that same panel on vaccines, another panelist alleged that vaccines are a low-margin product and a low profit industry.  It was said that many companies left the market.


That was true once.  This is now.  There are few companies due to tremendous market consolidation in pharmaceutical companies overall. Prices of vaccines have gone crazy. Almost all new vaccines in the US cost over $100 per dose.  The rise of third-party payers (mostly the federal government) made this possible.


From the Atlantic, regarding changes to the industry:

… But then a couple things happened to turn the vaccine market around in recent years. Global demand, particularly in developing countries, shot up. Since 2000,the Gavi Alliance has provided vaccination for 500 million children in poor countries, preventing an estimated 7 million deaths. GlaxoSmithKline reportedthat 80 percent of the vaccine doses they manufactured in 2013 went to developing countries. Additionally, vaccines that could turn a profit in high-income countries—constituting 82 percent of global vaccine sales in terms of value, according to the World Health Organization—hit the market.

“I think the market opened up once Hepatitis B vaccine showed that you can really sustain very high prices for single dose. That was unheard of back in the 1980s,” says David Bishai, director of the Interdepartmental Health Economics Program at Johns Hopkins Bloomberg School of Public Health.

Two “blockbuster” vaccines also hit the market: pneumococcal conjugate for meningitis and other bacteria infections, and a vaccine for human papillomavirus (HPV). The industry grew. One estimate puts the vaccine market now at $24 billion—huge, but a mere 2 to 3 percent of a trillion-dollar worldwide pharmaceutical industry.

While vaccine prices have always been higher in the U.S. and Europe due to tiered pricing, prices have been rising dramatically in recent years. The government’s Vaccine for Children Program purchases vaccines for about 50 percent of children in the U.S. The current CDC pediatric-contract price for MMR is $19.91, while the private-sector pediatric price for MMR has risen to $59.91. [Merck scientists have alleged Merck faked data on the mumps component of MMR to make it appear more effective than it is–Nass.]

In the U.S., Merck is the only company licensed to offer the measles vaccine. In their recent 2014 earnings report, they reported that sales of ProdQuad (a vaccine for measles, mumps, rubella, and varicella), MMR II (for measles, mumps, rubella), and Varivax (a chicken pox vaccine) together came in at $1.4 billion, a fraction of the company’s $42.2 billion in global sales. Their top selling vaccine is Gardasil, an HPV vaccine, which brings in $1.7 billion in sales… 

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