Baseline, innovative and breakthrough capabilities for success in the evolving business of vaccines
Once a commodity market, vaccines are now among the fastest growing products for pharmaceutical companies
Driven by favorable demographics, growing public acceptance, product innovation and specialized offers targeting under-served age segments, the global vaccines market has now reached $25 billion and is expected to continue to grow at a CAGR greater than 8% through 2018 (EvaluatePharma, 2012). This is significantly higher than the growth rate in pharmaceuticals, expected to average 4% annually. The U.S. market, estimated to be worth $12.8 billion in 2012, will continue to be the largest vaccines market and may reach $17.4 billion by 2018 (5.25% CAGR; Transparency Market Research, 2012).
Fierce competition exists among the incumbent players, which are predominantly the large pharmaceutical companies. In 2012, the top 5 vaccine manufacturers in the U.S. – Sanofi, Merck, GSK, Pfizer, and Novartis – account for more than 90% of vaccine revenues
Influenza and pediatric vaccines continue to be the bread and butter for manufacturers, but market growth will be driven by novel therapeutic areas.
Vaccines have traditionally been used for the prevention of infectious diseases. To date, vaccines have been developed for approximately 20 viral and bacterial diseases. While most of these vaccines are for vaccine-preventable diseases in children, in recent years, manufacturers have introduced vaccines targeting age segments such as the elderly (Sanofi’s high dose influenza vaccine and Merck’s shingles vaccine), and adolescents (conjugated meningococcal vaccines).
In addition to infectious diseases, research and development targets for vaccines continue to expand to address unmet needs, with products in early stage development for targets such as HIV and Alzheimer’s disease, and auto-immune diseases. Vaccine innovation is particularly active in oncology, with promising leads for ovarian, breast, prostate and lung cancers. Merck and GSK have HPV vaccines on the market, and many manufacturers are now focusing on therapeutic vaccines. Capgemini Consulting estimates that there are currently over 130 oncology therapeutic vaccines in the pipeline.
Newer technologies and enhanced scientific knowledge are enabling companies to differentiate traditionally commoditized products.
Vaccine manufacturers are exploring a variety of technological advances to make better products, improve the manufacturing process and drive down costs.
Research is being conducted to make vaccines stable at room temperature, which would make products easier to transport and store, especially in developing countries. For example, the NIH is funding research on the development of a silk-based stabilizer to keep vaccines stable at temperatures up to 140°F (60°C).
New vaccine delivery mechanisms are also being explored; MIT has developed nanoparticle delivery technology which could potentially be used for infectious diseases such as HIV and malaria. Certain new production and manufacturing processes hope to address patient needs such as egg allergy (Novartis’s cell-based influenza vaccine) and needle phobia (Sanofi’s intradermal influenza vaccine).
In addition, numerous opportunities exist in improving the performance of current vaccines considered to have sub-optimal efficacy or safety profiles.
Pharmaceutical companies should consider several success factors to enter or grow in the vaccines market
Although the vaccines market is competitive and presents high barriers to entry due to the complexity of production and development, there are still opportunities for entry and growth for pharmaceutical companies. Two main types of opportunities are available to new players: vaccines with high market potential due to current unmet needs but complex conditions of development (e.g., malaria and HIV), and niche markets with limited sales potential but higher technical feasibility. Companies willing to enter or grow in the vaccines market should consider the following key success factors:
Address public health concerns in early development strategy
- Develop a global public policy strategy early
- Design clinical trials in accordance with public policy and registration requirements in the local markets
- Demonstrate real-world effectiveness and value in clinical trials
Ensure appropriate level of recommendation
- Develop a strategy to ensure a strong recommendation from advisory boards (e.g., ACIP in the U.S.) and align payers, physicians and patients on the use of the target candidates
- Support approval of recommendations with health economics arguments
Grow existing patient base
- Identify and target developing countries for high volume growth
- Expand age indications and increase immunization in age segments
Enhance product supply
- Address capacity constraints to enable market expansion
- Align industrial base to market demands and access requirements (e.g., emerging markets)
Continuously innovate based on market and unmet needs
- Tackle new disease targets
- Address shifting strains, persistence issues and other unmet needs in existing vaccines (e.g., universal vaccines)
- Enhance convenience (e.g., reduce number of doses)
Capgemini has extensive experience working with vaccines manufacturers.
With our decades of experience in the vaccines industry, Capgemini Consulting’s global life sciences team has a deep understanding of the particular nuances of the vaccines market.
We have developed trusting relationships with key manufacturers and marketers in the U.S. and around the globe, and have advised companies on portfolio strategies, product development and launch initiatives, business model innovation, commercial operations, support operations and more.
We offer a perspective cultivated from a unique blend of strategy development and operational execution support to our clients