[Ip-health] GSK signs vaccine deal with Brazil

[Biotech. Info. Inst.]

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There may be good reasons for Brazil to have cut a deal with GSK,
including such a deal being the only way to gain access to this
"probably the most technically complex vaccine in the world" and
associated manufacturing technology (likely including much never-
disclosed, unpatented trade secrets).  This could simply be an example
of a complex biopharmaceutical product that no one can copy (make a
biogeneric) or even make a similar (biosimilar) version of without
knowing exactly how.  With Synflorix involving separately-cultured and
purified partially hydrolyzed capsular (outer coat) polysaccharide and
oligosaccharide antigens from ten Streptococcus pneumoniae bacteria,
with 8 of these antigens chemically conjugated to Haemophilus
influenzae protein D, one conjugated to a Diphtheria toxoid carrier
protein and another conjugated to a Clostridium tetani (tetanus)
toxoid carrier protein, manufacturing the vaccine could well be
impossible without full access to needed technologies.  Even if Brazil
or other countries decided to violate or compulsorily license any
relevant patents, cost-effective manufacture of such a safe and
effective complex biopharmaceutical almost certainly requires knowing
trade secrets.

So, Brazil cutting a deal with GSK may have been the best or only way
for the country to gain access to the vaccine, while also eventually
acquiring related technologies.  Presumably, Brazil also attempted to
negotiate with Wyeth, which makes a related vaccine (Prevar; Prevenar)
and, if possible, played one company against the other (so it may have
gotten a good deal, from its perspective).

Thank you.

Ronald A. Rader
President / Author & Publisher, 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 Sep 28, 2009, at 12:19 PM, Baker, Brook wrote:

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> It=92s been obvious for some time that Brazil has been using threats
> of compulsory licenses and price negotiations to advance its
> industrial policy.  On several occasions, it has locked itself into
> long-term supply contracts (e.g., previously on Kaletra) in exchange
> for end-of-patent-term technology transfer and interim investments/
> collaboration in pharmaceutical capacity.  In the case of Kaletra,
> Brazil bet badly, because the long-term price discount it negotiated
> with Abbott was eventually undercut following the CL by Thailand,
> whereby Abbott offered a lower-middle-income country price of only
> $1000 instead of the much higher price negotiated by Brazil.
> Fortunately for Brazil, it was allowed to ride on Thailand=92s coat
> tails.
>
> This time Brazil is locking itself out of the potential generic
> market for pneumococcal vaccine with an eight year agreement.
> Depending on any undisclosed cancellation clauses, Brazil is also
> locking itself out of being able to switch to an even more effective
> product, including perhaps a combo vaccine.  Although Brazil  pays
> discounted and decreasing prices over time, those prices are likely
> to be quite a bit higher than the price of an eventual generic
> equivalent.
>
> Brazil=92s decision to pursue national industrial policy via long-term
> price and technology transfer deals with Big Pharma has
> repercussions beyond its own borders.  Because of its size and
> purchasing power and its commitment to supplying essential medicines
> to its populations, Brazil plays an important role in structuring
> the global market for potential generic entrants.  When Brazil goes
> it alone, it shrinks the collective market and disincentivizes even
> earlier generic entry.  It also sends and illusory message that most
> developing countries are better off negotiating with Big Pharma than
> using TRIPS-compliant flexibilities to access cheaper generic
> equivalents of assured quality.  Although it might be tempting to
> think that Brazil=92s lower price becomes immediately available for
> other developing countries, including those in the region, the
> historical evidence is otherwise.  Brazil has market clout and an
> improving pharmaceutical sector =96 two bargaining chips that cannot
> be matched by many of its neighbors.
>
> South Africa has followed an industrial development policy similar
> to Brazil.  It has eschewed compulsory licensing in favor of
> voluntary licenses between Big Pharma companies and S. Africa=92s
> leading generic producers, especially Aspen Pharmacare.  Of course,
> S. Africa and Aspen have benefitted from the boldness of the
> Treatment Action Campaign and AIDS Law Project in seeking
> competition-based licenses.  Accordingly, it is now routine for Big
> Pharma to grant a limited number of voluntary licenses in S. African
> simply because TAC/ALP=92s legal strategy has been so effective.
>
> Brazil and South Africa could help regain momentum for =93global=94
> access to medicines if they pursued less individualistic solutions.
> In particular, they could be much bolder in providing public support
> for the UNITAID Patent Pool which offers a new business model for
> invigorating research into heat-stable, pediatric, and new-
> combination formulations needed developing countries and in
> promoting robust generic competition in both low-income and middle-
> income countries with respect to AIDS (and potentially other)
> medicines.
>
> Professor Brook K. Baker
> Health GAP (Global Access Project)
> Northeastern U. School of Law
> Program on Human Rights and the Global Economy
> 400 Huntington Ave.
> Boston, MA 02115 USA
> (w) 617-373-3217
> (cell) 617-259-0760
> (fax) 617-373-5056
> b.baker@neu.edu
>
>
> GSK signs lifetime deal with Brazil for pneumococcal vaccine
> By Andrew Jack
> Published: September 28 2009 03:00 | Last updated: September 28 2009
> 03:00
> GlaxoSmithKline has sealed an innovative =801.5bn (=A31.38bn) contract
> with Brazil guaranteeing sales of its pneumococcal vaccine, designed
> to prevent pneumonia and meningitis, over the entire life of the
> product.
>
> The deal marks a watershed in negotiation of a long-term contract in
> a way that provides GSK with an agreed price and volume, starting at
> =8011.50 a dose and falling to =805 in future years.
>
> Most drugs and vaccines are sold over far shorter periods and
> subject to uncertainties over arbitrary price reductions, as well as
> the threat of competition from rival low-cost generic alternatives.
>
> The deal comes as GSK continues to expand in emerging markets and is
> diversifying away from drugs into vaccines and other products.
>
> The company agreed to supply enough doses of Synflorix to vaccinate
> the 13m children requiring coverage each year for at least eight
> years, underpinned by a technology transfer agreement that will
> eventually allow Brazil to manufacture the vaccine itself.
>
> Brazil's health minister and Andrew Witty, GSK's chief executive,
> unveiled the deal in London on Friday to strengthen Brazil's
> pharmaceutical research and development capacity, including a =8017m
> joint project to develop a Dengue vaccine.
>
> Depending on the extent of technology transfer and Brazil's ability
> to manufacture the vaccine, which Mr Witty described as "probably
> the most technically complex vaccine in the world", GSK may still
> earn some income even after the contract ends.
>
> Some countries, including Brazil, have threatened or introduced
> compulsory licenses to overturn drug company patents and permit
> competition or force price reductions.
>
> The price represents a significant discount tothat of about =8035-=8040
> a dose at which the vaccine is sold in Europe, but the high volumes
> and long timescale provide unusual certainty to the company.
>
> The action also sets a baseline for sales in other middle-income
> countries, and for the Advance Market Commitment, a bulk purchase
> agreement with donor governments to help buy the vaccine for low-
> income countries.
>
> Mr Witty said: "This wasn't the first and I don't believe it will be
> the last such contract. It shows GSK and Brazil are really coming
> together with the same mindset."
>
> Paulo Gadelha, president of the Fiocruz institute, which will
> produce the vaccine, stressed that the technology received could
> also be used to help it make other vaccines in future.
>
> He said his institute was already pledging to provide technology
> transfer to make low-cost drugs and vaccines for African countries,
> in what could provide a challenge for large pharmaceutical companies.
>
> Mr Witty said "there has to be enough economic flow to encourage GSK
> to continue" developing vaccines for predominantly low- income
> countries.
>
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