VACCINES:
TECHNOLOGY TRANSFER TO
THE DEVELOPING WORLD
John H. Barton
Professor Emeritus, Stanford Law School
Former Visiting Scholar, NIH Department of
Clinical Bioethics
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.
VACCINE TECHNOLOGY
TRANSFER STUDY

Why technology transfer?
• Technology as engine of growth and science
• Transfer as affecting access to products for local and
global markets
• Variety of modes changing over time
• Severe restrictions under current international economic
law

Why vaccines?
• Crucial medical intervention
• Reasonably separable area (and very different history
from pharmaceuticals)
• Interest
VACCINE TECHNOLOGY
TRANSFER: OUTLINE

Heroic era (1891 => 1930s)

National public health: Growth and
divergence (193Os = >1990s)

Global vaccination programs (1960s =>
2000s)

Era of privatization and biotechnology
(~1990 =>
I - HEROIC ERA

Smallpox:
• Arm-to-arm vaccination – prehistory
• Jenner – 1798
• Brazil – 1887 (predecessor of Butantan)

Rabies and Pasteur Institutes
• Pasteur - 1885
• Pasteur Institutes




Dakar – 1896
Saigon – 1891
Now a network of 29 institutes, including 22 in developing nations
Researchers trained at Institut Pasteur
• Haffkine (Bombay) – 1899
• Oswaldo Cruz (Rio) – 1900
NEW VACCINES IN THE HEROIC
DAYS

Typhoid (1896) – Wright (England) and others; trials in India

Cholera (1896) – Haffkine, Delhi & Calcutta

Plague (1897) – Haffkine, Hongkong?

Diphtheria (1923) – Ramon (France) (antitoxin earlier)

TB (BCG) (1927) – France, but based partly on work in Saigon

Tetanus (1927) – Ramon (France)

Pertussis (1933) – Denmark & US

Yellow fever (1935) – RF (Lagos & New York); Pasteur (Dakar); trials in
Brazil
DYNAMICS OF HEROIC ERA



Scientists had to go where the disease
was (Arrowsmith syndrome)
Colonial policy (“mission civilisatrice,”
“every colony should have its Institut
Pasteur”)
Public health interest in more
sophisticated developing nations (Brazil)
THE TECHNOLOGY IN THE
HEROIC DAYS


Production involved small institutes
doing both research and production
(technology based on animal and
flask culture)
Technology acquired through
personal study (Institut Pasteur)
SMALLPOX VACCINE
PRODUCTION – OSWALDO
CRUZ – EARLY 20TH CENTURY
Fernandes 2004
II - GROWTH AND DIVERGENCE
DURING THE MID 20TH CENTURY

New vaccines

New technologies

New regulations
NEW VACCINES







Polio (Salk & Sabin)
Measles
Mumps
Hepatitis B
Meningococcus
Haemophilus influenza
Combinations
New technologies





Culture on chick embryos
(Goodpasture, Walter Reed, 1931)
Tissue culture (Enders, 1949)
Biotechnological production of
specific antigens (1980s)
Conjugate vaccines (1980s)
Plus improved separation methods
and improved assays
NEW REGULATORY STANDARDS





“Jim” and Biologicals Act – 1902
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
Management of air pressure – 1978/87?
Documentation and Team Biologics -1990s
MEANWHILE, BACK IN THE
DEVELOPING WORLD



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)
Lack of major scientific research programs
comparable to those of the developed
world (until Brazil, China, India in about
1980s)
THE BASIC PATTERN:

Many small scale producers (WHO found
74 rabies vaccine producers in 1984,
many still using live animals)

Frequent GMP problems

Did not make most advanced vaccines
• OPV, not IPV, partly because of WHO pressure
• Whole-cell pertussis, not acellular

Brazil as major exception
Brazil – 1943
Probably making yellow fever vaccine at Oswaldo
Cruz
Lacerda and Mello (2003)
THE RESULT:
APPROXIMATE STATISTICS
DTP COVERAGE - 1980






Industrialized countries
Latin America
South Asia
East Asia
MidEast
Sub-Sahara Africa
60 %
38 %
5%
5%
25 %
5%
Hadler et al, Vaccination Programs in Developing Countries in Plotkin &
Orenstien, Vaccines
TECHNOLOGY TRANSFER DURING THE
MID AND LATE-20TH CENTURY


Early on – probably through personal contact,
international meetings, and perhaps international
education among scientists
Later in period – serious donor efforts:
• RIVM – Vacsera (1980s)
• CIDA, Connaught, UNICEF, AID – Pakistan (1981 and
1984)
• Statens Serum Institut – Razi (1985)
• Canada plus Oswaldo Cruz – Nigeria (1986)
• Netherlands, Japan – Bio Farma (1991 & 1992)
• World Bank – China (mid 1990s)
III - NEW ERA OF GLOBAL
PROGRAMS

Eradication campaigns
• PAHO & smallpox – 1950-67
• WHO - Global smallpox – 1967-77
• WHO - Polio – 1985-200?

EPI – 1974

CVI – 1990

GAVI – 2000

Emergence of UNICEF/Rotary purchase system
with tiered pricing
PROCUREMENT FOR THE
GLOBAL PROGRAMS


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
EPI & PROCUREMENT



EPI created in 1974.
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 world’s
childhood vaccine near marginal cost.
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.
10 of 14 developed-world manufacturers partially or totally
stopped production of traditional vaccines during 19982001 (UNICEF).

CVI study of quality and development of matrix in 1993-94.

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
IV - CONTEMPORARY ERA

Patents and intellectual property
• TRIPS, stronger developed-world systems

Biotechnology
• Heavy private sector role in developed world,
with important public components, especially
in vaccines

Privatization & emergence of private
sector developing-world industry
• Political and economic thrust throughout world
Fiocruz Facility - 2001
http://www.pharmaceutical-technology.com/projects/fiocruz/
ECONOMICS OF DEVELOPED-WORLD
VACCINE INDUSTRY



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
Patent-based product exclusivity relatively
rare, except on newer vaccines and not
generally on mass-use children’s vaccines
PATENT ROLES



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)
Vaccine industry therefore does have to cover
royalty costs for intermediates
VACCINE PATENT LITIGATION:
RECENT CASES

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

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)
Connaught v. SKB (CAGC 1999) – purification of pertactin
BIOTECHNOLOGY AND PPPs

Developed world biotechnology based on NIH, biotech startups,
and license to Pharma

For developing world - PPPs
•
•
•
•


Especially HIV, malaria, TB
Public/private partnerships
Virtual development model
Most 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
Patents generally a less serious issue for developing world firms
(for traditional childhood vaccines) – but access to trade secret
data may be harder!
PRIVATIZATION



Political & fiscal reasons
Economic reasons – higher salaries
and greater management flexibility
Examples
• VACSERA (Egypt) 1973 and 2002
• BioFarma (Indonesia) 1997
OTHER MOTIVES FOR CREATING
DEVELOPING NATION MANUFACTURERS

Vision of biotechnology as a technology of
the future
• Indian Department of Biotechnology
• Cuban CIGB

Private sector
• Serum Institute of India 1966
• Shantha ~ 1990
• Bharat 1996 (created by Krishna Ella, U of
Wis.)
DEVELOPING NATION MANUFACTURERS
IN TODAY’S WORLD


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
THE CURRENT DEVELOPING WORLD
SUPPLIERS TO UNICEF AND THEIR
TECHNOLOGY SOURCES

BioFarma (Indonesia, OPV, DPT)
• Dutch & Japanese governments

Fiocruz/Biomanguinhos (Brazil, YF)
• 1980-83, 2000 Assistance from Japan
• 1999, 2003 Alliances with GSK

Institut Pasteur (Dakar, YF)
• Long term French input

Serum Institute of India (world’s largest producer of measles and
DTP, 5th largest vaccine firm)
• 1996 alliance with SKB
• 200? NIH, PATH, WHO license for Meningococcal vaccine; also RIVM on
Hib technology

Shantha Biotechnics (India, OPV, Hepatitis B)
• Collaboration with Indian research laboratories and support from
Oman
SOME OTHER MAJOR DEVELOPING
WORLD PRODUCERS

Butantan (Brazil)

China (Chengdu, Lanzhou, Shanghai, Shenzen)

CIGB (Cuba) (WHO prequalified)

Instituto Finlay (Cuba, 6 vaccines)

Bharat (India) (NIH licensee on rotavirus vaccine,
grants from Gates)
EXAMPLES OF OTHER CONTEMPORARY
TECHNOLOGY TRANSFER PROGRAMS

Merck license to China (1989)

University of Ottawa & Cuba


Chiron-Behring joint venture to
manufacture rabies vaccine in Gujurat
(facility in 1991, venture in 1998
WHO and DCVMN (2001) (NIH is a
member)
BEGINNINGS OF GLOBALIZATION?
(E.G. DEVELOPING-NATION SUPPLY TO
DEVELOPED-WORLD)



GSK & Cuba – license to use Cuban
meningitis B technology – 1999
Berna Biotech (Swiss) purchase of
GreenCross (Korea) – 2002
Wyeth & Bharat – manufacture HiB
on license - 2003
VACCINE TECHNOLOGY
TRANSFER: SUMMARY CHART
TECHNOLOGY
ECONOMICS
POLITICS
REGULATION
LEGAL AND
INTELLECTUAL
PROPERTY
TECHNOLOGY
TRANSFER
HEROIC
Low
Low cost
Colonial policy
plus altruism
Nearly absent
Absent
Institut
Pasteur
MID-CENTURY
Moving
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
CURRENT
High
High cost/low
margin,
economies of
scale
Selfsufficiency,
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?
High
Globalization?
Access?
Financial
sustainability?
ICH?
Research tool
issues?
Bio-terrorism
concerns?
Global
integration?
REFLECTIONS – TECHNOLOGY
TRANSFER PATTERN




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 III (1995-20??) – globalization and integration,
controlled by market structure, regulation, economies of
scale in research and production
Note that all this depends on
• The 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
property
REFLECTIONS AND PENDING
ISSUES FOR VACCINES - I

How long will the global donor market be there?
•
•
•
•

The PPP’s:
•
•
•

Recent dependence on Gates
Possibility of donor fatigue – we’re now in a global version of the public health
mode
Procurement policy?
Relevance of growing private market in India (and possibly elsewhere)?
What likelihood of success?
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)?
Bioterrorism
•
•
•
•
Suspicions of Iran and Cuba
Visas
Export limitations
New development models in the U.S.
REFLECTIONS AND PENDING
ISSUES FOR VACCINES - II

Strategic licenses between developed and developing nation
firms:
• 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?

Consolidation on a global scale?
• Economic or research motivations?
• Regulation, patents, and access to developed world markets?
• Choice of markets by developing-country manufacturers?
QUESTIONS, CRITICISMS, AND
SUGGESTIONS?
Thank you!
jbarton@stanford.edu