Healthcare Industry News:  pneumococcal vaccine 

Biopharmaceuticals

 News Release - November 15, 2007

High-price Vaccines Spark Four-fold Growth in Pediatric & Adolescent Vaccines Market

London, Nov 15 2007--(HSMN NewsFeed)--After years of stagnation in the childhood and adolescent vaccines sector, the launch of novel, high price vaccines against pneumococcal infections and human papillomavirus has initiated rapid growth in the market, which will nearly quadruple in size to $16 billion by 2016. However, while Wyeth’s Prevnar and Merck & Co’s Gardasil have experienced a rapid uptake driven by obvious medical need and public attention, other vaccines such as Merck & Co’s RotaTeq have failed to achieve widespread integration into routine vaccination schedules due to an 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, according to a new report* by independent market analyst Datamonitor.

Introduction of high price vaccines will induce rapid growth in pediatric & adolescent vaccines market

Childhood and adolescent vaccination across the western world has long centered around established and cheap vaccines to prevent diseases such as diphtheria, tetanus, pertussis, mumps, measles and rubella. However, beginning with the launch of Wyeth’s pneumococcal vaccine Prevnar in 2000, the sector has experienced a rapid introduction of novel, high-price vaccines for additional diseases, including the human papillomavirus vaccines – Gardasil (Merck & Co) and Cervarix (GlaxoSmithKline (GSK)), as well as the rotavirus vaccines – RotaTeq (Merck & Co) and Rotarix (GSK). This development has sparked new interest from big pharma in the pediatric and adolescent vaccines market, 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.”

Driven by a significant medical need, Wyeth’s pneumococcal vaccine Prevnar has become the first blockbuster vaccine

Wyeth’s Prevnar, the first premium price vaccine, 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.

Global sales reached almost $2 billion in 2006, making Prevnar 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.

This fact, combined with the medical need for a broader serotype coverage, has motivated Wyeth and GSK to 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 expect 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.”

Fuelled by huge public attention & awareness, Merck’s Gardasil and GSK’s Cervarix have a large commercial opportunity in the HPV vaccines market

In June 2006, Merck’s Gardasil was the first vaccine to be approved for the prevention of infections with certain subtypes of human papillomavirus (HPV), a pathogen which is causatively linked to the development of cervical cancer. GSK’s competing product Cervarix received EU approval in September 2007. As these products are the first to allow prevention of a form of cancer through vaccination, 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. This decision is driven more by public pressure and by the exciting opportunity to vaccinate against cancer rather than by real medical need, Kresse says. “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.”

The lack of medical need for rotavirus vaccines will limit their uptake in most markets

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.

Vaccine manufacturers need to focus on real medical needs & rising disease awareness to endure commercial success

The aforementioned examples illustrate that 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.”

Notes for editors

* Pipeline and Commercial Insight: Pediatric and Adolescent Vaccines
** France, Germany, Italy, Spain and the UK
*** UK, US, France, Germany, Italy, Spain and Japan

Datamonitor’s report Pipeline and Commercial Insight: Pediatric and Adolescent Vaccines, provides discussion of the pediatric and adolescent vaccines market including epidemiology, market drivers and strategic analysis of key companies. Assessment of marketed and pipeline products. Patient-based forecast of market size and coverage rates to 2016.


Source: Datamonitor

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