Urgently Needed: A New Financial Model for Vaccine Development

The 2009 vaccine, which was tested in Thailand, was moderately effective—reducing the risk of HIV infection in heterosexual men and women by around 31% during the three and a half years after vaccination. And if the current study shows more significant efficacy, it “would be a tectonic, historic event for HIV,” the director of the U.S. Military HIV Research Program, which oversaw the Thai vaccine study, told the Washington Post.

In such a moment of optimism, it seems a bit curmudgeonly to offer a question like, “What took so long?” But some of you may be wondering just that. HIV was discovered, after all, in 1983. Why are we still testing vaccines 33 years later?

There are lots of good answers to that question, and NAM has a terrific, thoughtful explanation here. (Another particularly telling report on why the virus is so dynamic and elusive can be found here.)

But studying the delay isn’t an exercise in cynicism. It gives us a case study in the challenges of vaccine manufacture and testing—and this goes well beyond HIV to a host of pathogens old and new that threaten humankind. “It takes a long time to discover a vaccine,” says Andrew Witty, the CEO of GSK, which is arguably more skilled at the art than any other drugmaker. “But my God, it takes a long while to build a factory to make a vaccine.”

While there’s, sadly, an enormous ready market for an HIV vaccine, and therefore an incentive for drugmakers to pursue decades worth of investment here, there are scores of infectious diseases for which there is no good pharma “business model” to develop a treatment or vaccine.

Earlier this month, Witty, Seth Berkley—chief executive officer of Gavi, the Vaccine Alliance—and I talked about this very real problem at Fortune’s Brainstorm Health meeting. Gavi is an extraordinary public-private partnership, founded at the World Economic Forum in 2000, that provides vaccines to the 73 poorest countries in the world.

One solution that both Berkley and Witty embraced is the notion of “market shaping” through the mechanism of an “advanced market commitment,” which was used to develop a pneumococcal vaccine tailored for viral strains in sub-Saharan Africa—a region where children die of pneumonia in staggering numbers. Gavi, which purchases and distributes tens of millions of doses of various vaccines a year, agreed to pay a low, but certain price for a pneumococcal vaccine that GSK and others would make—essentially guaranteeing a market.

The effect of this modest incentive was felt far beyond sub-Saharan Africa, says Berkley, who has led Gavi since 2011 and who is an especially creative problem-solver when it comes to getting essential medicines to children in the most impoverished and war-torn nations. Within a year of its development, the pneumococcal vaccine had entered its first developing nation, Berkley says. Five years later it’s in 54 countries.

Vaccine development is not a charity, he says. So we have to ask ourselves, “What are the incentives in place to get the best technologies, the best companies—not just large companies, but biotech companies, academic institutions—to be prepared to step in and bring science and technology to solve these problems?”

“I’m a great believer in science,” Berkley says. “It can solve this problem.” But to do so, we have to bring the same creative disruption that we bring to science and technology to new financial models for drug and vaccine development. That’s what Gavi is trying to do, he says—“bring lots of innovation, in different areas, to get the private sector to move things forward.”

DIGITAL HEALTH

GE Healthcare, Boston Children's Hospital team up on pediatric brain disease scans. GE Healthcare announced on Monday that it has struck a long-term collaboration with the Boston Children's Hospital aiming to cut down on the rate of false positives and misdiagnoses stemming from children's brain MRI scans. The two groups will work together to use GE's cloud and analytics tech in order to help differentiate "normal" pediatric neurological scans from abnormal ones, noting that radiologists' error rates in reading certain types of scan can be very high. GE Healthcare announced a similar arrangement earlier this month on improving x-ray readings through a partnership with the University of California at San Francisco (UCSF).

Scientists put mouse embryos into state of suspended animation. University of California at San Francisco (UCSF) scientists have successfully put early-stage mouse embryos in states of suspended animation, according to new research published in the journal Nature. The researchers were able to use an experimental cancer drug known as an mTOR inhibitor in order to "freeze" the embryos in a constant state for up to 30 days—surpassing the approximately 20-day mouse gestation period. And, even more striking, once the mTOR inhibitors were removed from the embryos, they were able to develop into viable mice. The implications of the experimental technology range from treating the very cancers it's being tested in to reproductive and regenerative medicine, especially considering the fact that the mTOR inhibitors may also be able to put stem cells into a suspended state. (FierceBiotech, Nature)

Johnson & Johnson eyes a deal for biotech Actelion. Pharma giant J&J has reportedly approached Switzerland's Actelion, Europe's biggest biotech and a maker of drugs for the deadly heart and lung condition pulmonary arterial hypertension (PAH), for a possible buyout. But Reuters notes that CEO Jean-Paul Clozel is likely to drive a hard bargain for his firm, which he built up from its earliest days. Another possible road bump? Actelion's portfolio includes a pair of successful new PAH drugs and its pipeline is stocked with experimental therapies for treating multiple sclerosis and c. difficile, giving the company an opportunity to produce a well-diversified next-gen product line. Still, Actelion shares soared 20% in early Monday trading on the M&A speculation. (Fortune)

In a rare move, Vanderbilt academics want to take a novel brain disorder molecule to the clinic by themselves. Academic groups like the Vanderbilt Center for Neuroscience Drug Discovery are often intimately involved in the drug discovery process—at least at its earliest, preclinical stages, when they help sift through hundreds of molecules that could potentially hold therapeutic value for various diseases. But these institutions almost always pair up with a biotech or pharma partner with more expertise in scaling clinical trials and dealing with regulatory requirements for phase I and later studies. Well, Vanderbilt is taking a different approach. Jeff Conn, director of the university's Center for Neuroscience Drug Discovery, tells Endpoints that his group will go it alone on a new molecule that targets a neurotransmitter that is affected by Alzheimer's and schizophrenia. The neurodisease field is fraught with risk (as evidenced by Eli Lilly's high profile failure for a star Alzheimer's drug candidate last week), which helps explain why biopharma companies can wind up ditching development projects for therapies that they license from academic institutes. But Conn believes this particular drug candidate shows unique promise—or at least enough for his group to risk taking it into early-stage human safety trials. (Endpoints)

INDICATIONS

Biopharma's favorite bill in Congress is headed toward a House vote. The 21st Century Cures Act seemed, at one point, on an easy path towards Congressional approval. The bill has united powerful interests from both patient advocacy groups and biopharma companies who want to make it easier to get novel drugs through the Food and Drug Administration (FDA) approval process. But the politics of the 2016 presidential election—particularly outrage over high drug prices, including for medicines to treat rare disorders, and disagreements over funding—appeared to throw a wrench into the legislation's chances since the original House bill's passage last year. Now, it appears that Cures may be back on track, with a new draft including $4.8 billion in funding for the National Institutes of Health (NIH) and $500 million for the FDA. The House is set to vote on the measure Wednesday and it could reach President Obama's desk before the end of the year if the Senate takes similar action. (Fortune)

GlaxoSmithKline aims for EU approval of its shingles vaccines. British pharma giant GlaxoSmithKline is trying to line up European marketing clearance for a potential multi-billion dollar drug prospect: Shingrix, a shingles vaccine for people 50 and older. GSK is pushing for a rapid series of approvals in major markets (it filed with the FDA in October), and it's not hard to see why: shingles vaccines are recommended for all older people, presenting a massive market opportunity, and Shingrix has shown superiority to its main competitor (Merck's Zostavax) in clinical trials. It could become a blockbuster drug bringing in more than $1 billion in sales per year by 2021 if approved, according to analysts. (Fortune, PharmaTimes)

Drug competition may not be the silver bullet for keeping prices in check. Competition means lower prices—right? A glut of medicinal supply available to treat conditions with known patient pools should drive down the cost of therapies and give consumers more buying power. But that's not necessarily the case in U.S. biopharma, the Wall Street Journal reports. Companies continue to raise their competing products' prices in tandem, and special arrangements struck with benefits managers and insurers may prevent customers from accessing a potentially cheaper therapy. For instance, Pfizer and Eli Lilly raised the prices of their competing erectile dysfunction drugs Viagra and Cialis, respectively, by the exact same percentage over the summer. These very pricing tactics aren't unique to branded drugmakers by any means; in fact, a consortium of the world's biggest generic drug companies are currently under investigation by the Justice Department for possible collusion and price fixing. (Wall Street Journal)

THE BIG PICTURE

Beware the multibillion dollar biotech buyout. STAT News reports on the dangers of biotech licensing and partnership deals that seem misleadingly massive thanks to "biobucks"—the standard industry practice of valuing deals with a combination of upfront payments and milestone payments that only come to fruition if certain products clear pre-set regulatory or clinical thresholds. For instance, a company may only shell over $50 million to purchase access to an experimental medicine; but that same deal can be touted as carrying a "$1 billion valuation" even though there is no assurance that the drug will ever see the light of day (in the market, at least). It's a little bit like how Elizabeth Holmes didn't actually "lose" $4.5 billion over the summer in the wake of Theranos' mounting troubles—that money was never actually tangible in the first place. (STAT News)

Drugs may not be the best answer for sleep aid. Physicians have begun pushing alternatives to drugs for treating insomnia following revised physician guidelines issued earlier this year, the Wall Street Journal reports. The American College of Physicians recommended cognitive behavioral therapy as the go-to way to tackle sleep disorders in May, noting that the type of sleep derived from insomnia medications isn't natural and can come with harmful side effects. Cognitive therapy takes a more holistic approach which aims to identify the root sources of insomnia—including stress, alcohol intake, food habits, wake and sleep times, and other factors—in order to promote better sleep. (Wall Street Journal)

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