[Ip-health] Financial Times- Drug groups to reap swine-flu billions
Biotech. Info. Inst.
biotech@biopharma.com
Fri Jul 24 10:00:03 2009
--
[ Picked text/plain from multipart/alternative ]
Seasonal influenza vaccines have long been a low-profit/dose, high-
volume, commodity-type business, and actually with a moderate amount
of competition -- in many respects, the type of pharmaceutical market
I presume activists would find relatively ideal (within a free market
context). This now includes H1N1 vaccines, with the companies
reportedly charging governments much the same for this as for bulk
seasonal vaccines.
In terms of biologics/biopharmaceuticals, influenza vaccines are as
close to low-profit generics as one can get. In many respects,
influenza vaccines are true biogenerics (not just biosimilars),
including being fully substitutable and interchangeable and with each
approved based on minimal comparative testing. With the U.S.
contracts being fixed-fee, production problems already being
encountered and the companies charging much the same price for H1N1 as
seasonal vaccine, the companies already low (by their usual standards)
markup/dose on these products will be further reduced.
My pointing out that, in this isolated instance, protesting these
contracts as Big Pharma price-gouging appears to be misdirected, a
mistake, does not make me a Big Pharma crony (and why get personal?).
H1N1 gov't contracts are simply the wrong or a poor target, when there
are so many good examples of unbridled price gouging. Unless new
facts are disclosed regarding these U.S. contracts, I and most others
looking at the available information would have to presume the gov't
is actually getting a relatively fair deal, with the companies
essentially forced into this contracting. If you want to protest high
profits from gov't vaccine purchases, sole-source biodefense
contracting provides much better examples.
Thank you.
Ronald A. Rader
President / Author & Publisher of BIOPHARMA: Biopharmaceutical
Products in the U.S. and European Markets
Biotechnology Information Institute
1700 Rockville Pike, Suite 400
Rockville, MD 20852
Phone: 301-424-0255
E-mail: biotech@biopharma.com
Web sites: www.biopharma.com; www.bioinfo.com;
www.biopharmacopeia.com; www.biosimilars.com
On Jul 22, 2009, at 8:46 PM, Jeffrey A. Williams wrote:
> Ron and all,
>
> It doesn't matter what the price per dose is IF the profits are
> far to high in terms of percentage or gross amount. It's clear
> that Drug companies are overcharging for H1N1 vaccine and
> need to reduce price significantly. Frankly it would seem reasonable
> that the Drug companies that produced H1N1 made huge profits
> as a result should refund 50% to the governments of the respective
> countries their shipments of deliveries of same. I know that's not
> going to happen, but that's what ought to be done given the latest
> hard numbers reported on this thread. Those governments should
> than after receiving those respective/prospective refunds, in turn
> send out checks to the recipients or parents of the recipients where
> those folks paid for the vaccine themselves. Other wise the
> government
> entities that paid or supplemented those costs or the Insurance
> companies
> that covered those costs either in part of in full, should be getting
> either
> in full or in part respectively, those refund checks or payments.
>
> Failure to do as prescribed above to me constitutes gross malfeasance
> by most legal standards, and may be legally actionable accordingly.
> If
> I were the FTC or HHS, I would be suggesting to their respective
> OIG's or SOIG's looking into this VERY closely. Same would be
> true in the case of an Insurance carrier or private citizen that
> paid or
> in part, paid for the respective H1N1 vaccines. I'll be sure to
> instruct
> our legal council to do so immediately.
>
> So Ron, I and I am nearly certain that our members or my companies
> employees do not find your explanation creditable however eloquently
> presented. Price gouging is NOT expectable behavior! So tell your
> big Pharma cronies to knock it off!
>
> "Biotech. Info. Inst." wrote:
>
>> --
>> [ Picked text/plain from multipart/alternative ]
>> I recall a similar prior posting implying that the vaccine companies
>> are making a killing, excessive profit, etc. from U.S. gov't
>> contracting for H1N1 influenza vaccine manufacture.
>>
>> It may be very possible or likely that this is not the case -- that
>> these companies will not make much profit and that they would rather
>> not be involved in these contracts (we may never know). Without more
>> details available, if I were a large stockholder (or company
>> executive) purely interested in profit, I would prefer these
>> companies
>> avoid these gov't contracts, which have more down- than upsides in
>> terms of profit potential and have negligible other upsides, e.g.,
>> can
>> drag the companies into very public controversies.
>>
>> It is very possible that these contracts are something that these
>> companies were essentially forced to do and that they did not
>> proactively on their own seek these contracts (public duty; expected
>> of them); that they would much rather direct the same manufacturing
>> capacity to seasonal vaccine manufacture (with more sales likely this
>> year due to all the influenza hype, forecasts of a more-pathogenic-
>> than-recent-years seasonal strain and potential shortages meaning
>> prices can be further increased; with prices likely already increased
>> from last year); and with the U.S. and presumably other governments
>> reportedly paying no more per dose for H1N1 than they do for seasonal
>> vaccine in bulk (with the manufacturing processes substantially the
>> same). Combine these factors with recent reports that the H1N1
>> strain
>> is growing slower in culture than expected, meaning lower yield,
>> longer production runs to make the same number of dose, and with the
>> U.S. contacts being fixed-fee, the companies will be making less
>> profit than they expected. And there is even less upside for these
>> companies in H1N1 vaccine manufacture, if you add in the expectations
>> for free or subsidized sales to poorer countries, accusations of
>> profiteering, difficulties in projecting demand and supply, the
>> potential for problems in manufacture (already happening) and gaining
>> FDA approval, and the likelihood of calls for reasonable pricing,
>> price controls or even nationalization of H1N1 vaccine manufacturing
>> if a real pandemic strikes.
>>
>> Now, of course the companies are still likely going to make some
>> profit, including gov't-funded facilities upgrades some have
>> received. But contrary to some press reports and opinion pieces,
>> they
>> will probably be making less profit margin than they hoped, less than
>> that from normal free market sales, and probably would much rather
>> not
>> be tied down by these high-volume, low-profit, fixed-fee gov't
>> contracts (vs. being able to make and sell more seasonal vaccine
>> worldwide at what the market will bear).
>>
>> Ronald A. Rader
>> President / Author & Publisher of BIOPHARMA: Biopharmaceutical
>> Products in the U.S. and European Markets
>> Biotechnology Information Institute
>> 1700 Rockville Pike, Suite 400
>> Rockville, MD 20852
>> Phone: 301-424-0255 (9AM-5M Eastern U.S.)
>> E-mail: biotech@biopharma.com
>> Web sites: www.biopharma.com; www.bioinfo.com;
>> www.biopharmacopeia.com; www.biosimilars.com
>>
>> On Jul 21, 2009, at 10:38 AM, Terri - Louise Beswick wrote:
>>
>>> This is a multi-part message in MIME format.
>>> --
>>> [ Picked text/plain from multipart/alternative ]
>>>
>>> Drug groups to reap swine-flu billions
>>>
>>>
>>> By Andrew Jack in London
>>>
>>> Published: July 20 2009 19:40 | Last updated: July 20 2009 23:43
>>>
>>> Some of the world=92s leading pharmaceutical companies are reaping
>>> billions of dollars in extra revenue amid global concern about the
>>> spread of swine flu <http://www.ft.com/indepth/swine-flu> .
>>>
>>> Analysts expect to see a boost in sales from GlaxoSmithKline <http://ma=
rkets.ft.com/tearsheets/performance.asp?s=3Duk:GSK
>>>> , Roche <http://markets.ft.com/tearsheets/performance.asp?
>>> s=3Dch:RO> and Sanofi-Aventis <http://markets.ft.com/tearsheets/perfor=
mance.asp?s=3Dfr:SAN
>>>> when the companies report first-half earnings lifted by
>>> government contracts for flu vaccines and antiviral medicines.
>>>
>>> The fresh sales =96 on top of strong results from Novartis <http://mark=
ets.ft.com/tearsheets/performance.asp?s=3Dch:NOVN
>>>> of Switzerland and Baxter <http://markets.ft.com/tearsheets/performanc=
e.asp?s=3Dus:BAX
>>>> of the US, which both also produce vaccines =96 come as the latest
>>> tallies show that more than 740 people have died from the H1N1
>>> virus, and millions have been affected around the world.
>>>
>>> GlaxoSmithKline of the UK confirmed it had sold 150m doses of a
>>> pandemic flu vaccine =96 equivalent to its normal sales of seasonal
>>> flu vaccine =96 to countries including the UK, the US, France and
>>> Belgium, and was gearing up to boost production.
>>>
>>> GSK also produces Relenza, an antiviral medicine that reduces the
>>> length and severity of the infection, and is preparing to increase
>>> manufacturing towards 60m annual doses. The UK placed an order for
>>> 10m treatments this year.
>>>
>>> One beneficiary of the fears about the pandemic has been Roche of
>>> Switzerland, which sells Tamiflu, the leading antiviral drug, and
>>> has seen a sharp rise in orders from private companies as well as
>>> governments.
>>>
>>> A report last week from JPMorgan, the investment bank, estimated
>>> that governments had ordered nearly 600m doses of pandemic vaccine
>>> and adjuvant =96 a chemical that boosts its efficacy =96 worth $4.3bn
>>> (=803bn, =A32.6bn) in sales, and there was potential for 342m more dose=
s
>>> worth $2.6bn.
>>>
>>> It forecast that fresh antiviral sales could boost sales for GSK and
>>> Roche by another $1.8bn in the developed world, and potentially up
>>> to $1.2bn from the developing world.
>>>
>>> But there were also uncertainties for the pharmaceutical
>>> manufacturers. With demand likely to outstrip supply, and initial
>>> production suggesting that the yield for the pandemic vaccine is
>>> relatively low, they may face difficult choices in determining how
>>> much to supply to the countries seeking orders.
>>>
>>> They are also under pressure to provide more drugs and vaccines for
>>> free, or extremely cheaply, to the developing world.
>>>
>>> http://www.ft.com/cms/s/0/375dde06-7559-11de-9ed5-00144feabdc0.html
>>>
>>> _______________________________________________
>>> Ip-health mailing list
>>> Ip-health@lists.essential.org
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>>
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