Towards the end of a fascinating talk by MIT’s Drew Endy a member of the audience made a sweeping statement about the economics of vaccine research. The gist of the comment – with which Endy casually agreed – was that there was no incentive for Big Pharma to put R&D money into a highly effective influenza vaccine which would erode its own market when they can continue to make semi-effective vaccines for whatever serotypes happen to pop up each year, guaranteeing an annual return.
I’ve heard many variations on this argument before, and am still gobsmacked that anyone finds it even remotely plausible. Why is the vaccine industry always the target of this sloppy reasoning? Do the same people believe that, if unregulated, surgeons would only perform only partial tumor removals so as not to erode the cancer treatment market? Ethical issues aside, no surgeon in their right mind would pass over the incredible profit opportunity to offer cures when their competitors are offering only treatments.
In fact, the existence of partial vaccines such as influenza increases the profit potential of a full vaccine. Think of the institutional pressures that would be put on, say, a vaccine that acts as a complete prophylaxis against cancer. There is nothing like it on the market; outside the suicidal and extremely old, there are few people for whom it would not be a hugely valuable and non-substitutable good. Biomedical products take years and billions of dollars in capital to develop, however, and even with tremendous demand and economies of scale there would be a sizable group of people who could not afford it. Populist governments being as unpredictable as they are, this is a very risky investment for any Big Pharma: will they face broken patents, price controls, boycotts, or more?
Counterintuitively, producing a vaccine for a more mature market would provide a much safer return on investment. Few people would be outraged if only the elite can afford the immune-for-life influenza shot, as long as the elderly and sick can at least get their yearly boosters.
