Why we're still waiting for an AIDS vaccine

[Guest guest]

Interesting article from CNN.com

<<Big pharma doing less than you think

But economics comes into play, too. The five big pharmaceutical companies that

make

vaccines - GlaxoKline (Charts), Merck, Novartis (Charts), Sanofi-Aventis

(Charts) and

Wyeth (Charts) - all do research into AIDS. No drug company wants to be accused

of

ignoring the epidemic. But they are doing a lot less than you might imagine.>>

----------------------------------------------------------------------------

Why we're still waiting for an AIDS vaccine

The bottom line is this: A traditional bottom line approach isn't enough to

combat the

worst epidemic since the Black Death.

By Marc Gunther, Fortune senior writer

August 2 2006: 10:33 AM EDT

NEW YORK (Fortune) -- The next time someone tells you that an unfettered free

market

can solve all of our social problems, ask them why it is taking so long to

develop a vaccine

to combat the worst epidemic since the Black Death of the 14th century.

I'm talking, of course, about AIDS, which has killed nearly 25 million people

since the first

cases were documented in 1981. About 3 million died last year, and another 4

million

were infected with HIV, the virus that causes AIDS, according to UNAIDS.

More from FORTUNE

Why we're still waiting for an AIDS vaccine

Why we still like Apache

Last call for a union town

FORTUNE 500

Current Issue

Subscribe to Fortune

Plugged in

Why options backdating is a big deal

A debate over its nuances misses the point: Incentive-based compensation is

broken.

(Read the column)

Organic for everyone, the Wal-Mart way

Saving seafood

Why the Internet's not all it's cracked up to be

This summer, the long-running search for an AIDS vaccine is again in the news.

The Bill

and Melinda Gates Foundation recently awarded $287 million in grants to

researchers

working on a vaccine. Later this month, about 20,000 people will converge on

Toronto for

the 16th International AIDS conference, where there will be lots of talk about a

vaccine.

The thing is, people have been talking about an AIDS vaccine for a long time. In

1984,

Margaret Heckler, who was then the secretary of Health and Human Services, said

a

vaccine could be ready for testing in a couple of years. In 1997, President

Clinton

challenged the nation to come up with a vaccine within a decade. Today, the

experts say a

vaccine probably will not be ready for at least another 10 years.

Prevention programs - promoting abstinence, monogamy and the use of condoms -

have

slowed down HIV infection rates. But a vaccine remains the best hope of bringing

the

epidemic under control.

So what's taking so long?

Partly, it's the science. HIV is one of the most complicated viruses ever

identified. It

replicates and mutates rapidly, and targets the very immune system that protects

us from

disease. I don't pretend to understand the science, so I won't try to explain

it, but you can

learn more at the Web site of the International AIDS Vaccine Initiative, which

offers this

basic q-and a.

Big pharma doing less than you think

But economics comes into play, too. The five big pharmaceutical companies that

make

vaccines - GlaxoKline (Charts), Merck, Novartis (Charts), Sanofi-Aventis

(Charts) and

Wyeth (Charts) - all do research into AIDS. No drug company wants to be accused

of

ignoring the epidemic. But they are doing a lot less than you might imagine.

According to IAVI and the Aids Vaccine Advocacy Coalition, private industry

invested about

$75 million into AIDS vaccine research in 2005 - only about 10 percent of the

$759

million spent on research. (Nearly all of the rest came from governments, led by

the United

States.)

Global spending on an AIDS vaccine from all sources - government, private

industry and

foundations - represents less than 3 percent of global spending on AIDS,

according to

IAVI. In other words, virtually all of the money spent on AIDS has gone to

treatment rather

than prevention - no surprise given the high costs of treatment and the

influence

exercised by AIDS patients.

Drug companies have good reason for their reluctance to invest more in AIDS

prevention.

Because there's no clear path to finding a vaccine, the costs of research are

high.

" The science is very, very complex, " says Janet Skidmore, director of media

relations for

Merck (Charts), which is investing more than any of its rivals. " This is a very

wily virus. "

Conducting human clinical trials of potential vaccines is also no simple matter.

It raises a

slew of ethical, political and economic issues, and requires the cooperation of

thousands

of healthy but at-risk people.

As if those weren't obstacles enough, there's no guarantee that whoever finally

develops

an AIDS vaccine will make money selling it. The need for the vaccine is greatest

among

poor people in the global south. Resources there are scarce. Distribution will

be a

challenge.

What's more, because most vaccines need to be administered once or twice, they

aren't

nearly as profitable as drugs that have to be taken daily over long periods of

time - like

the best-selling drugs that lower cholesterol, help control asthma or deal with

depression.

" People are looking for blockbuster drugs, the multi-billion drug, the next big

thing, " says

Seth Berkley, president and founder of IAVI. " Vaccines haven't necessarily been

the most

profitable market. "

Progress

Despite all that, there are reasons for optimism. Merck is currently conducting

what is

called a " proof of concept, " or Phase 2, study on a vaccine candidate involving

about 3,000

people in North and South America, the Caribbean and Australia. This could lead

to a

large-scale, or Phase 3, trial if things go well.

Meanwhile, a Phase 3 trial currently underway in Thailand is testing a

combination of

vaccines produced by Sanofi-Aventis and a private company called VaxGen. About

30

other smaller-scale trials are also underway, most involving partnerships

between

governments and the private sector.

More broadly, AIDS experts and advocates are seeking ways to create market

incentives to

drive research. The Gates foundation grants will help; they are large, and they

come with

strings attached, requiring researchers to collaborate with one another. The

idea, in

essence, is to develop a body of knowledge that will make it less expensive for

the drug

companies to develop vaccines.

At the same time, academics and government officials are looking for ways to

assure the

drug companies that there will be demand for a vaccine, after they create one.

One idea

under discussion is called an Advance Market Commitment - a large sum of money,

perhaps $2 or $3 billion, guaranteed by governments, that would guarantee

pricing at

certain levels to a successful vaccine-maker. This idea is interesting, complex

and

controversial and you can read more about it here and here.

The bottom line is this: A traditional bottom line approach won't bring us a

vaccine. More

creative thinking is needed - and it seems to be on the way. AIDS experts agree

that

progress is being made and that the problem is solvable.

" There's been a lot more collaboration, a lot more money, a lot more scientific

understanding, " said Warren, executive director of the AIDS Vaccine

Advocacy

Coalition. " But still no vaccine. "