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VACCINES: TECHNOLOGY TRANSFER TO THE DEVELOPING WORLD John H. Barton Professor Emeritus, Stanford Law School Former Visiting Scholar, NIH Department of.

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Presentation on theme: "VACCINES: TECHNOLOGY TRANSFER TO THE DEVELOPING WORLD John H. Barton Professor Emeritus, Stanford Law School Former Visiting Scholar, NIH Department of."— Presentation transcript:

1 VACCINES: TECHNOLOGY TRANSFER TO THE DEVELOPING WORLD John H. Barton Professor Emeritus, Stanford Law School Former Visiting Scholar, NIH Department of Clinical Bioethics

2 THIS IS A WORK-IN-PROGRESS: PLEASE CRITICIZE, ADVISE, CORRECT, AND SUGGEST, AS NEEDED! I speak purely for myself and not for Stanford or NIH.

3 VACCINE TECHNOLOGY TRANSFER STUDY Why technology transfer? Why technology transfer? Technology as engine of growth and scienceTechnology as engine of growth and science Transfer as affecting access to products for local and global marketsTransfer as affecting access to products for local and global markets Variety of modes changing over timeVariety of modes changing over time Severe restrictions under current international economic lawSevere restrictions under current international economic law Why vaccines? Why vaccines? Crucial medical interventionCrucial medical intervention Reasonably separable area (and very different history from pharmaceuticals)Reasonably separable area (and very different history from pharmaceuticals) InterestInterest

4 VACCINE TECHNOLOGY TRANSFER: OUTLINE Heroic era (1891 => 1930s) Heroic era (1891 => 1930s) National public health: Growth and divergence (193Os = >1990s) National public health: Growth and divergence (193Os = >1990s) Global vaccination programs (1960s => 2000s) Global vaccination programs (1960s => 2000s) Era of privatization and biotechnology (~1990 => Era of privatization and biotechnology (~1990 =>

5 I - HEROIC ERA Smallpox: Smallpox: Arm-to-arm vaccination – prehistoryArm-to-arm vaccination – prehistory Jenner – 1798Jenner – 1798 Brazil – 1887 (predecessor of Butantan)Brazil – 1887 (predecessor of Butantan) Rabies and Pasteur Institutes Rabies and Pasteur Institutes Pasteur - 1885Pasteur - 1885 Pasteur InstitutesPasteur Institutes Dakar – 1896 Dakar – 1896 Saigon – 1891 Saigon – 1891 Now a network of 29 institutes, including 22 in developing nations Now a network of 29 institutes, including 22 in developing nations Researchers trained at Institut Pasteur Researchers trained at Institut Pasteur Haffkine (Bombay) – 1899Haffkine (Bombay) – 1899 Oswaldo Cruz (Rio) – 1900Oswaldo Cruz (Rio) – 1900

6 NEW VACCINES IN THE HEROIC DAYS Typhoid (1896) – Wright (England) and others; trials in India Typhoid (1896) – Wright (England) and others; trials in India Cholera (1896) – Haffkine, Delhi & Calcutta Cholera (1896) – Haffkine, Delhi & Calcutta Plague (1897) – Haffkine, Hongkong? Plague (1897) – Haffkine, Hongkong? Diphtheria (1923) – Ramon (France) (antitoxin earlier) Diphtheria (1923) – Ramon (France) (antitoxin earlier) TB (BCG) (1927) – France, but based partly on work in Saigon TB (BCG) (1927) – France, but based partly on work in Saigon Tetanus (1927) – Ramon (France) Tetanus (1927) – Ramon (France) Pertussis (1933) – Denmark & US Pertussis (1933) – Denmark & US Yellow fever (1935) – RF (Lagos & New York); Pasteur (Dakar); trials in Brazil Yellow fever (1935) – RF (Lagos & New York); Pasteur (Dakar); trials in Brazil

7 DYNAMICS OF HEROIC ERA Scientists had to go where the disease was (Arrowsmith syndrome) Scientists had to go where the disease was (Arrowsmith syndrome) Colonial policy (mission civilisatrice,every colony should have its Institut Pasteur) Colonial policy (mission civilisatrice,every colony should have its Institut Pasteur) Public health interest in more sophisticated developing nations (Brazil) Public health interest in more sophisticated developing nations (Brazil)

8 THE TECHNOLOGY IN THE HEROIC DAYS Production involved small institutes doing both research and production (technology based on animal and flask culture) Production involved small institutes doing both research and production (technology based on animal and flask culture) Technology acquired through personal study (Institut Pasteur) Technology acquired through personal study (Institut Pasteur)

9 SMALLPOX VACCINE PRODUCTION – OSWALDO CRUZ – EARLY 20 TH CENTURY Fernandes 2004

10 II - GROWTH AND DIVERGENCE DURING THE MID 20 TH CENTURY New vaccines New vaccines New technologies New technologies New regulations New regulations

11 NEW VACCINES Polio (Salk & Sabin) Polio (Salk & Sabin) Measles Measles Mumps Mumps Hepatitis B Hepatitis B Meningococcus Meningococcus Haemophilus influenza Haemophilus influenza Combinations Combinations

12 New technologies Culture on chick embryos (Goodpasture, Walter Reed, 1931) Culture on chick embryos (Goodpasture, Walter Reed, 1931) Tissue culture (Enders, 1949) Tissue culture (Enders, 1949) Biotechnological production of specific antigens (1980s) Biotechnological production of specific antigens (1980s) Conjugate vaccines (1980s) Conjugate vaccines (1980s) Plus improved separation methods and improved assays Plus improved separation methods and improved assays

13 NEW REGULATORY STANDARDS Jim and Biologicals Act – 1902 Jim and Biologicals Act – 1902 Cutter incident – 1955 – led to creation of Division of Biologics Standards in NIH, now in FDA Cutter incident – 1955 – led to creation of Division of Biologics Standards in NIH, now in FDA GMP and management of input materials 1963 and 1976 GMP and management of input materials 1963 and 1976 Management of air pressure – 1978/87? Management of air pressure – 1978/87? Documentation and Team Biologics -- 1990s Documentation and Team Biologics -- 1990s

14 MEANWHILE, BACK IN THE DEVELOPING WORLD World War II World War II Independence and conversion of colonial public health systems into national ones, often fighting for limited resources (later on with IMF and World Bank pressures on health budgets) Independence and conversion of colonial public health systems into national ones, often fighting for limited resources (later on with IMF and World Bank pressures on health budgets) Lack of major scientific research programs comparable to those of the developed world (until Brazil, China, India in about 1980s) Lack of major scientific research programs comparable to those of the developed world (until Brazil, China, India in about 1980s)

15 THE BASIC PATTERN: Many small scale producers (WHO found 74 rabies vaccine producers in 1984, many still using live animals) Many small scale producers (WHO found 74 rabies vaccine producers in 1984, many still using live animals) Frequent GMP problems Frequent GMP problems Did not make most advanced vaccines Did not make most advanced vaccines OPV, not IPV, partly because of WHO pressureOPV, not IPV, partly because of WHO pressure Whole-cell pertussis, not acellularWhole-cell pertussis, not acellular Brazil as major exception Brazil as major exception

16 Brazil – 1943 Probably making yellow fever vaccine at Oswaldo Cruz Lacerda and Mello (2003)

17 THE RESULT: APPROXIMATE STATISTICS DTP COVERAGE - 1980 Industrialized countries60 % Industrialized countries60 % Latin America38 % Latin America38 % South Asia 5 % South Asia 5 % East Asia 5 % East Asia 5 % MidEast25 % MidEast25 % Sub-Sahara Africa 5 % Sub-Sahara Africa 5 % Hadler et al, Vaccination Programs in Developing Countries in Plotkin & Orenstien, Vaccines

18 TECHNOLOGY TRANSFER DURING THE MID AND LATE-20 TH CENTURY Early on – probably through personal contact, international meetings, and perhaps international education among scientists Early on – probably through personal contact, international meetings, and perhaps international education among scientists Later in period – serious donor efforts: Later in period – serious donor efforts: RIVM – Vacsera (1980s)RIVM – Vacsera (1980s) CIDA, Connaught, UNICEF, AID – Pakistan (1981 and 1984)CIDA, Connaught, UNICEF, AID – Pakistan (1981 and 1984) Statens Serum Institut – Razi (1985)Statens Serum Institut – Razi (1985) Canada plus Oswaldo Cruz – Nigeria (1986)Canada plus Oswaldo Cruz – Nigeria (1986) Netherlands, Japan – Bio Farma (1991 & 1992)Netherlands, Japan – Bio Farma (1991 & 1992) World Bank – China (mid 1990s)World Bank – China (mid 1990s)

19 III - NEW ERA OF GLOBAL PROGRAMS Eradication campaigns Eradication campaigns PAHO & smallpox – 1950-67PAHO & smallpox – 1950-67 WHO - Global smallpox – 1967-77WHO - Global smallpox – 1967-77 WHO - Polio – 1985-200?WHO - Polio – 1985-200? EPI – 1974 EPI – 1974 CVI – 1990 CVI – 1990 GAVI – 2000 GAVI – 2000 Emergence of UNICEF/Rotary purchase system with tiered pricing Emergence of UNICEF/Rotary purchase system with tiered pricing

20 PROCUREMENT FOR THE GLOBAL PROGRAMS Smallpox (1960-77) – encourage local procurement (smallpox animal technology) – developing nations supplied at least 80 % of own needs Smallpox (1960-77) – encourage local procurement (smallpox animal technology) – developing nations supplied at least 80 % of own needs Polio (1985-200?) – at first entirely developed-nation procurement, some developing-world manufacturers by the 1990s Polio (1985-200?) – at first entirely developed-nation procurement, some developing-world manufacturers by the 1990s

21 EPI & PROCUREMENT EPI created in 1974. EPI created in 1974. Latin American Revolving Fund – 1979 - supported by national health ministries. Latin American Revolving Fund – 1979 - supported by national health ministries. UNICEF procurement system (1978?) – supported by donors, including Rotary and now Gates – with PAHO, now purchases roughly 70 % (by dose) of worlds childhood vaccine near marginal cost. UNICEF procurement system (1978?) – supported by donors, including Rotary and now Gates – with PAHO, now purchases roughly 70 % (by dose) of worlds childhood vaccine near marginal cost.

22 MORE ON THE 1990s REVOLUTION IN PROCUREMENT EPI/UNICEF initially purchased from developed nations – but faced severe shortages and high prices as suppliers merged and reached capacity limits during 1990s. EPI/UNICEF initially purchased from developed nations – but faced severe shortages and high prices as suppliers merged and reached capacity limits during 1990s. 10 of 14 developed-world manufacturers partially or totally stopped production of traditional vaccines during 1998- 2001 (UNICEF). 10 of 14 developed-world manufacturers partially or totally stopped production of traditional vaccines during 1998- 2001 (UNICEF). CVI study of quality and development of matrix in 1993-94. CVI study of quality and development of matrix in 1993-94. WHO developed a prequalification system – 1989(?). WHO developed a prequalification system – 1989(?). Now UNICEF buys more than 2/3 of its non-OPV vaccines from major developing-nation manufacturers – and small developing-nation manufacturers discouraged Now UNICEF buys more than 2/3 of its non-OPV vaccines from major developing-nation manufacturers – and small developing-nation manufacturers discouraged

23 IV - CONTEMPORARY ERA Patents and intellectual property Patents and intellectual property TRIPS, stronger developed-world systemsTRIPS, stronger developed-world systems Biotechnology Biotechnology Heavy private sector role in developed world, with important public components, especially in vaccinesHeavy private sector role in developed world, with important public components, especially in vaccines Privatization & emergence of private sector developing-world industry Privatization & emergence of private sector developing-world industry Political and economic thrust throughout worldPolitical and economic thrust throughout world

24 Fiocruz Facility - 2001 http://www.pharmaceutical-technology.com/projects/fiocruz /

25 ECONOMICS OF DEVELOPED-WORLD VACCINE INDUSTRY In addition to development cost, very substantial manufacturing fixed cost and difficulty in changing due to regulation In addition to development cost, very substantial manufacturing fixed cost and difficulty in changing due to regulation Relatively low markup opportunity for mass-use childhood vaccines Relatively low markup opportunity for mass-use childhood vaccines Patent-based product exclusivity relatively rare, except on newer vaccines and not generally on mass-use childrens vaccines Patent-based product exclusivity relatively rare, except on newer vaccines and not generally on mass-use childrens vaccines

26 PATENT ROLES Barriers to entry generally based less on patents than on regulatory costs and economies of scale Barriers to entry generally based less on patents than on regulatory costs and economies of scale But patents used on components (adjuvants, particular molecules, and processes) But patents used on components (adjuvants, particular molecules, and processes) Vaccine industry therefore does have to cover royalty costs for intermediates Vaccine industry therefore does have to cover royalty costs for intermediates

27 VACCINE PATENT LITIGATION: RECENT CASES Boehringer Ingelheim Vetmedica v. Schering Plough (CAFC 2003) – process for growing and isolating virus Boehringer Ingelheim Vetmedica v. Schering Plough (CAFC 2003) – process for growing and isolating virus Medeva Pharma Ltd. v. Am. Home Prods. (2001) – method of detecting pertussis antigen Medeva Pharma Ltd. v. Am. Home Prods. (2001) – method of detecting pertussis antigen Embrex v. Service Engineering (CAFC 2000) – method of injecting vaccine into egg Embrex v. Service Engineering (CAFC 2000) – method of injecting vaccine into egg Evans Medical v. American Cyanamid (CAFC 1999) – pertussis antigen and vaccine based on it (parallel litigation in Europe) Evans Medical v. American Cyanamid (CAFC 1999) – pertussis antigen and vaccine based on it (parallel litigation in Europe) Connaught v. SKB (CAGC 1999) – purification of pertactin Connaught v. SKB (CAGC 1999) – purification of pertactin

28 BIOTECHNOLOGY AND PPPs Developed world biotechnology based on NIH, biotech startups, and license to Pharma Developed world biotechnology based on NIH, biotech startups, and license to Pharma For developing world - PPPs For developing world - PPPs Especially HIV, malaria, TBEspecially HIV, malaria, TB Public/private partnershipsPublic/private partnerships Virtual development modelVirtual development model Most of research (except clinical trials) in developed worldMost of research (except clinical trials) in developed world These groups must be concerned about research tool patents, at least insofar as they do research in developed world These groups must be concerned about research tool patents, at least insofar as they do research in developed world Patents generally a less serious issue for developing world firms (for traditional childhood vaccines) – but access to trade secret data may be harder! Patents generally a less serious issue for developing world firms (for traditional childhood vaccines) – but access to trade secret data may be harder!

29 PRIVATIZATION Political & fiscal reasons Political & fiscal reasons Economic reasons – higher salaries and greater management flexibility Economic reasons – higher salaries and greater management flexibility Examples Examples VACSERA (Egypt) 1973 and 2002VACSERA (Egypt) 1973 and 2002 BioFarma (Indonesia) 1997BioFarma (Indonesia) 1997

30 OTHER MOTIVES FOR CREATING DEVELOPING NATION MANUFACTURERS Vision of biotechnology as a technology of the future Vision of biotechnology as a technology of the future Indian Department of BiotechnologyIndian Department of Biotechnology Cuban CIGBCuban CIGB Private sector Private sector Serum Institute of India 1966Serum Institute of India 1966 Shantha ~ 1990Shantha ~ 1990 Bharat 1996 (created by Krishna Ella, U of Wis.)Bharat 1996 (created by Krishna Ella, U of Wis.)

31 DEVELOPING NATION MANUFACTURERS IN TODAYS WORLD Acquisition by UNICEF favors Europe and several developing-nation manufacturers – and UNICEF is the key international market for the developing-world firms Acquisition by UNICEF favors Europe and several developing-nation manufacturers – and UNICEF is the key international market for the developing-world firms There are now many developing-world manufacturers (20 in DCVMN), of whom 12 have met WHO prequalification standards There are now many developing-world manufacturers (20 in DCVMN), of whom 12 have met WHO prequalification standards

32 THE CURRENT DEVELOPING WORLD SUPPLIERS TO UNICEF AND THEIR TECHNOLOGY SOURCES BioFarma (Indonesia, OPV, DPT) BioFarma (Indonesia, OPV, DPT) Dutch & Japanese governmentsDutch & Japanese governments Fiocruz/Biomanguinhos (Brazil, YF) Fiocruz/Biomanguinhos (Brazil, YF) 1980-83, 2000 Assistance from Japan1980-83, 2000 Assistance from Japan 1999, 2003 Alliances with GSK1999, 2003 Alliances with GSK Institut Pasteur (Dakar, YF) Institut Pasteur (Dakar, YF) Long term French inputLong term French input Serum Institute of India (worlds largest producer of measles and DTP, 5 th largest vaccine firm) Serum Institute of India (worlds largest producer of measles and DTP, 5 th largest vaccine firm) 1996 alliance with SKB1996 alliance with SKB 200? NIH, PATH, WHO license for Meningococcal vaccine; also RIVM on Hib technology200? NIH, PATH, WHO license for Meningococcal vaccine; also RIVM on Hib technology Shantha Biotechnics (India, OPV, Hepatitis B) Shantha Biotechnics (India, OPV, Hepatitis B) Collaboration with Indian research laboratories and support from OmanCollaboration with Indian research laboratories and support from Oman

33 SOME OTHER MAJOR DEVELOPING WORLD PRODUCERS Butantan (Brazil) Butantan (Brazil) China (Chengdu, Lanzhou, Shanghai, Shenzen) China (Chengdu, Lanzhou, Shanghai, Shenzen) CIGB (Cuba) (WHO prequalified) CIGB (Cuba) (WHO prequalified) Instituto Finlay (Cuba, 6 vaccines) Instituto Finlay (Cuba, 6 vaccines) Bharat (India) (NIH licensee on rotavirus vaccine, grants from Gates) Bharat (India) (NIH licensee on rotavirus vaccine, grants from Gates)

34 EXAMPLES OF OTHER CONTEMPORARY TECHNOLOGY TRANSFER PROGRAMS Merck license to China (1989) Merck license to China (1989) University of Ottawa & Cuba University of Ottawa & Cuba Chiron-Behring joint venture to manufacture rabies vaccine in Gujurat (facility in 1991, venture in 1998 Chiron-Behring joint venture to manufacture rabies vaccine in Gujurat (facility in 1991, venture in 1998 WHO and DCVMN (2001) (NIH is a member) WHO and DCVMN (2001) (NIH is a member)

35 BEGINNINGS OF GLOBALIZATION? (E.G. DEVELOPING-NATION SUPPLY TO DEVELOPED-WORLD) GSK & Cuba – license to use Cuban meningitis B technology – 1999 GSK & Cuba – license to use Cuban meningitis B technology – 1999 Berna Biotech (Swiss) purchase of GreenCross (Korea) – 2002 Berna Biotech (Swiss) purchase of GreenCross (Korea) – 2002 Wyeth & Bharat – manufacture HiB on license - 2003 Wyeth & Bharat – manufacture HiB on license - 2003

36 VACCINE TECHNOLOGY TRANSFER: SUMMARY CHART TECHNOLOGYECONOMICSPOLITICSREGULATION LEGAL AND INTELLECTUAL PROPERTY TECHNOLOGY TRANSFER HEROICLow Low cost Colonial policy plus altruism Nearly absent Absent Institut Pasteur MID-CENTURYMoving Increasing cost National health programs Strengthening from a low base Absent WHO, national institutes, meetings, education? ERADICATION PROGRAMS Moving Pressure by buyers Altruism, global budget issues Strengthening, WHO prequalification Nearly absent WHO, expert groups, donor funding CURRENTHigh High cost/low margin, economies of scale Self- sufficiency, biotechnology, donor politics, privatization Very high domestic and parallel WHO prequalification Strengthening but mainly on intermediates and processes WHO DCVMN, biotechnology programs, corporate strategic alliances, donors education FUTURE?HighGlobalization?Access? Financial sustainability? ICH? Research tool issues? Bio-terrorism concerns? Global integration?

37 REFLECTIONS – TECHNOLOGY TRANSFER PATTERN Phase I (for vaccines, pre 1930) – artisan-level technology, easily copied Phase I (for vaccines, pre 1930) – artisan-level technology, easily copied Phase II (for vaccines, 1930-1995) – growth of many producers at local level, restricted by access to capital rather than to technology Phase II (for vaccines, 1930-1995) – growth of many producers at local level, restricted by access to capital rather than to technology Phase III (1995-20??) – globalization and integration, controlled by market structure, regulation, economies of scale in research and production Phase III (1995-20??) – globalization and integration, controlled by market structure, regulation, economies of scale in research and production Note that all this depends on Note that all this depends on The possible scale for the initial technology transferThe possible scale for the initial technology transfer The timing of the spread compared with global political events such as the current moves to free trade and intellectual propertyThe timing of the spread compared with global political events such as the current moves to free trade and intellectual property

38 REFLECTIONS AND PENDING ISSUES FOR VACCINES - I How long will the global donor market be there? How long will the global donor market be there? Recent dependence on GatesRecent dependence on Gates Possibility of donor fatigue – were now in a global version of the public health modePossibility of donor fatigue – were now in a global version of the public health mode Procurement policy?Procurement policy? Relevance of growing private market in India (and possibly elsewhere)?Relevance of growing private market in India (and possibly elsewhere)? The PPPs: The PPPs: What likelihood of success?What likelihood of success? What roles for DC or LDC manufacturers?What roles for DC or LDC manufacturers? Continued support for procurement as the number of products grows (c.f. problems of integrating Hepatitis B into the EPI package)?Continued support for procurement as the number of products grows (c.f. problems of integrating Hepatitis B into the EPI package)? Bioterrorism Bioterrorism Suspicions of Iran and CubaSuspicions of Iran and Cuba VisasVisas Export limitationsExport limitations New development models in the U.S.New development models in the U.S.

39 REFLECTIONS AND PENDING ISSUES FOR VACCINES - II Strategic licenses between developed and developing nation firms: Strategic licenses between developed and developing nation firms: Mechanism of technology transfer for serving LDC market – what incentives for each side? Role in access?Mechanism of technology transfer for serving LDC market – what incentives for each side? Role in access? Possibility of future off-shore production? – importance of labor costs? Feasibility of maintaining quality standards? Trends in economies of scale? Trends in integration?Possibility of future off-shore production? – importance of labor costs? Feasibility of maintaining quality standards? Trends in economies of scale? Trends in integration? Consolidation on a global scale? Consolidation on a global scale? Economic or research motivations?Economic or research motivations? Regulation, patents, and access to developed world markets?Regulation, patents, and access to developed world markets? Choice of markets by developing-country manufacturers?Choice of markets by developing-country manufacturers?

40 QUESTIONS, CRITICISMS, AND SUGGESTIONS? Thank you! jbarton@stanford.edu


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