vaccines

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Cos. Focus on Smallpox Vaccine

By THERESA AGOVINO

..c The Associated Press

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

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 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.

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 .

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. 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. 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.

On the Net:

http://www.hopkins-biodefense.org

AP-NY-10-21-01 2053EDT