When Gavi was first launched, Big Pharma was abandoning the vaccine business.
“It had become unprofitable because only the wealthy western markets were … willing to pay what they were worth,” said Dominic Hein, head of market training at Gavi.
Today, the partnership is helping the poorest countries pay for vaccinations that meet World Health Organization quality standards. The Serum Institute is a leading supplier, pumping four out of ten vaccines funded by Gavi. He was “the pioneer in manufacturing low-cost, high-quality vaccines,” said Hein.
The partnership with Gates has strengthened the company’s position in the healthcare world – and helped it reach new levels of profitability – although people sometimes scratch their heads when they hear the Serum Institute name. of India.
“We’ll have to change the name to describe exactly what we’re doing,” said Adar Poonawalla, who took over in 2011 as CEO of the company, which is still publicly traded. “Maybe in a year or two we will look at this.
Live a globetrotter life
For all of their work on behalf of the masses, the Poonawallas are unmistakably wealthy and love to show it off.
Cyrus Poonawalla, who remains president of the company at 79, is No. 165 in the Forbes billionaire ranking, with an estimated net worth of $ 11.5 billion. (A different ranking estimated that the pandemic had increased his net worth by a quarter, ranking him as the 86th richest man in the world.) His personal website presents photos of him playing with Gates and posing with his cars. sport and its limousines.
Adar, who along with his glamorous and Bollywood-related wife Natasha has become popular fodder for tabloids across the subcontinent, told GQ India that under normal circumstances he would be in Cannes, on a yacht this summer. Instead, it is near the company’s headquarters in Pune, where one of its offices is a refurbished A320 aircraft. Pune is the eighth most populous city in India and is in the midst of a severe coronavirus outbreak.
“In terms of public perception, we are best known for our lifestyle; now people understand the work that we do, ”he acknowledged on the glossy men’s paper, which featured it on the cover of his June issue as“ Vaccine Vanguard ”.
Indeed, the company estimates that 65% of the world’s children receive at least one vaccine manufactured by the Serum Institute.
Some of its products have been designed specifically for the needs of poor countries. For example, its oral rotavirus vaccine is heat stable, so it does not need to be kept cold as it is distributed in countries without constant electricity.
But others of its products are variants of breakthroughs that have been made by the global drug giants known collectively as Big Pharma. These, Poonawalla said, could be sold for much less than what Americans and Europeans pay for them.
The cheaper production costs in India are part of what Poonawalla says is the Serum Institute’s advantage over big western players like Sanofi and GlaxoSmithKline. Yet the Serum Institute has never created a unique vaccine of its kind – which means that its entire business model is based on the fact that its scientists rely on basic research from other companies to understand a disease and the immune response of the body.
Once the Serum Institute has produced a quality version of the same vaccine created by Big Pharma, it is able to produce a large number of doses quickly and inexpensively. The benefit for people around the world is a matter of “basic math,” Poonawalla said. “Once you produce over 100, 200 million doses of any product, you know the costs go down dramatically.”
Yet regulations have made it difficult for the Serum Institute to access rich markets. It is not because the company cannot meet quality standards, he said, but because Western regulatory systems preserve patent protections for vaccines in complex ways.
“Accordingly, the [and American] people paid hundreds of dollars for a vaccine instead of 20 or 10 dollars for a vaccine, “he said. “This is one of the things that President Trump has identified as semi-fraud on the part of Big Pharma, where they have gone too far and exploited the public.”
Challenging the global patent system
Poonawalla’s claims strike at the heart of debates over drug prices in the US and the EU, which center on whether patents and other incentives to meet unmet need are being abused in search of profits. The objective of medical patents is to reward companies for the risks and costs of research and development. The Coalition for Epidemic Preparedness Innovations has estimated that – taking into account some unsuccessful efforts – getting a vaccine in later stages of clinical trials costs up to $ 1.1 billion.
Thus, European and American laws give the original designers of a new drug a monopoly period, where no one else can sell their drug. While there are plenty of mechanisms to extend this, usually within 15 years or so, the cheaper generic versions can start to compete.
For vaccines, which are part of a class of drugs derived from living cells known as biological, there may be several layers of patents: for the active aspect of the formula, for the adjuvant that makes it work better, for cell cultures used to grow the active parts, for the vaccine manufacturing process. This can delay the introduction of cheaper generic biologics, called biosimilars, indefinitely. The complicated – sometimes impossible – task of working around patented components makes it harder for potential competitors to drive down prices.
Generic drugs can usually ignore clinical trials that the brand name drug had to undergo, as long as they can prove that they are chemically identical and have the same biology. Biologics are much more complex drugs, and so for biosimilars, “you can’t guarantee that similarity to the same degree,” said Paul Fehlner, former intellectual property lawyer at Novartis. It cannot be assumed that the vaccine versions of the Serum Institute work in exactly the same way as those of the original manufacturers, in part because they may have changed something to avoid a patented part of the process. This means they have to deal with an expensive list of clinical trials.
In the United States and Europe, “regulation builds on and reinforces patenting strategies,” Fehlner said. And if a product infringes a patent in any way – even if it seems accidental – the product cannot be sold. Even the Big Pharma firms are constantly being pursued in the United States for alleged patent violations for organic products, with the goal of keeping competition out of the market for as long as possible.
One simple way to overcome these barriers is to purchase commercial rights. Poonawalla said he had tried – and it’s an established practice for companies to sell these rights to vaccines for sale in developing countries. But for wealthy markets, Big Pharma won’t sell for an affordable price – or they outright refuse, he said.