NEW YORK (AP) - In the highly profitable pharmaceutical business, vaccines have long been the low-rent cousin - never matching the profits or prominence of medicines.
That has changed significantly since Sept. 11. Now vaccines have got the attention, but it's unclear if dollars will follow.
New fears of bio-terrorism have led the government to announce it wants to purchase 300 million doses of smallpox vaccine, enough to inoculate every American against the deadly disease.
Many drug makers have shied away from making vaccines in the past; vaccines can be as costly as drugs to develop, but don't offer the same returns.
When the Centers for Disease Control and Prevention was seeking a firm to manufacture smallpox vaccine last year, it was spurned by major drug companies, and the $343 million contract for 40 million doses fell to a previously obscure British firm, Acambis.
Now more drug companies are offering their services, and the government said it would spend $509 million on additional doses. But that's hardly a windfall in an industry where sales are expected to reach $178 billion this year, according estimates by the Pharmaceutical Research and Manufacturers of America.
The United States has 15 million doses of smallpox vaccine, and has ordered an additional 14 million from Acambis, on top of the original 40 million. The company now expects to have its first doses ready by 2002, two years earlier than originally planned.
But experts say much more is needed. In the wake of recent anthrax cases, concerns have grown about security at the Russian lab that has one of the two remaining smallpox virus samples.
"We couldn't contain an outbreak" said GiGi Kwik, a fellow at the John Hopkins Center for Civilian Biodefense Studies.
A smallpox epidemic would be much worse than an anthrax outbreak, because smallpox is contagious and more deadly than anthrax. Roughly 30 percent of those who contract smallpox die. A large portion of the U.S. population has never been vaccinated and no one knows if those inoculated have retained their immunity.
Smallpox vaccination stopped in the United States in 1972, and the disease was eradicated by 1980. That meant many major pharmaceutical companies stopped producing the vaccine because it wasn't considered a major public health threat, and no market was foreseen.
Other factors also kept drug companies from making vaccines for smallpox or other bio-terrorist threats such as Ebola.
Lehman Brothers analyst Tony Butler estimates the gross margin on a drug is about 90 percent compared to 70 percent to 80 percent for a vaccine. Drugs also generate more sales - medicines are often taken two and three times daily for years. Vaccines are typically given one to five times over a lifetime.
Butler said it's difficult for vaccine developers to choose promising candidates. Companies must determine if the demand for a vaccine is great enough, or if the affected population could afford the treatment. The same is true for drugs, but medicines are given to sick people while vaccines are given to healthy people.
"You know who should get a cancer drug, but who should really get the vaccine?" asked Butler.
In addition, vaccines can have side effects that pose risk of litigation. Experts say if healthy people get sick after taking a vaccine they are much more likely to win juror sympathy than a sick person developing complications from a drug.
Lawsuits by parents who assert their children were hurt by vaccines were so widespread that in 1988 the government set up the National Vaccine Injury Compensation Program to handle the complaints.
"When an individual is sick and seeks treatment there is a certain amount of risk associated with the treatment. The risk assessment is totally different with a healthy person," said Dr. Adel Mahmoud, president of Merck & Co.'s vaccine division.
Sen. Edward Kennedy, D-Mass., is working on a massive bioterrorism package worth $5 billion to $10 billion. That includes money to hasten vaccine production and ease antitrust restrictions for drug companies.
"There is just so much to do," said Kwik. "There was not a real interest in this because there was no market. My impression is that the drug companies don't do anything unless there is a profit."
But others have a more optimistic view. Dr. Anthony Fauci, director of the National Institute for Allergy and Infectious Diseases, told NBC's "Meet the Press" on Sunday that the government could have enough vaccine for everyone in the nation within six to 12 months.
Thats my understanding to. Thanks for posting this!! Common sense and calm must prevail. Panick and fear is exactly what the perps who did this to America want. I won't give it to them. I think we need to be alert.. but we also need to stay calm. Trust our Government. They are on top of this as best as can be.. we have no other choice than to trust them at this time. So lets just do that.. be alert.. be cautious.. but not fearful or panicked. I hate seeing people give in to what the terrorists want.
To those who don't understand.. a disease like SmallPox and the vaccine which is from the disease doesn't age. It is still the disease, the cells from SmallPox could be a saved forever. It doesn't matter if they are a hundred years old. They are still SmallPox. That is what the vaccine is made from. Heck.. I just read a story where they did DNA from a Dinosaur and found disease .. cultured it!! Seems that a lot of Dinosaurs had putrified skin lesions.
They are testing now to see if the existing vaccines can be diluted and still be effective. In other words.. can one vaccine serve 5 people instead of one person.
I heard that Spring of 2002 would be a likely date for completion. Right now, they could vaccinate an immediate outbreak. People in the medical field are on alert. This is actually being handled quite well (all things considered).
I do think someone previously was asleep on the job, hint hint.. especially knowing what they did at the time. But now we have to deal with the NOW.. and it "is" being handled.