Go to the Globe and Mail homepage

Jump to main navigationJump to main content

How vaccines became big business (JOHN WOODS)
How vaccines became big business (JOHN WOODS)

Flu Inc.

How vaccines became big business Add to ...

It was not the talk Dr. Michael Ossi planned to give when he was summoned to Washington in the fall of 2003 to brief health officials on Capitol Hill.

Dr. Ossi, an infectious disease expert with British pharmaceutical giant GlaxoSmithKline PLC, had been asked to meet with government officials on how to respond to a deadly problem unfolding halfway around the world.

More Related to this Story

In Asia, entire flocks of birds were dying from a virus called H5N1, better known as avian flu. A particularly virulent strain of influenza, H5N1 had for years been confined mostly to birds because their higher body temperatures provided an ideal environment for the bug to proliferate.

But pockets of people were becoming infected in Asia, setting off alarm bells for health officials around the globe. When it spread among humans, the consequences were unusually fatal. Roughly 60 per cent of those infected with H5N1 died, making it three times deadlier than the 1919 Spanish Flu, according to the World Health Organization.

Dr. Ossi came to the hastily arranged gathering of health officials and academics expecting to talk to them about his company's research into anti-viral drugs and flu vaccine. But the health experts clustered around a handful of tables were not interested in hearing about the science behind such products. They had much more pressing concerns.

They only had one question, Dr. Ossi recalls: "How much can you make and how fast can you make it?"

It was a watershed moment for him. For most of his career, working in vaccine research - indeed, most research related to the prevention and treatment of infectious diseases - was a ticket to obscurity at a big drug company. The high stakes and big profits for companies like Glaxo were not in vaccines, but in multibillion-dollar blockbuster drugs: the Wellbutrins, the Zantacs and the Valtrexes.

Evan Tordorf, 4, cries as he gets his H1N1 shot in Montreal on Nov. 6.

But the world was changing. Shoehorned into that meeting room in Washington were mathematicians from top universities, charged with calculating how many people could be protected in a pandemic; ethicists who would debate who should get medicine first in the event of a shortage; and public health officials struggling to find a way to cope with potentially tens of millions of infected people. Their urgency made it clear to Dr. Ossi that the quiet, unprofitable world of vaccines was about to be given more prominence in government than it had in decades.

H5N1 would alter government approaches to pandemic planning. But it would also create a new and unprecedented opportunity for the global pharmaceutical industry. It was, as Dr. Ossi recalls, "an obvious commercial opportunity" for the drug companies - one that is reshaping their businesses.

In a matter of a few years, flu shots have gone from being a marginal, money-losing business to a massive profit generator for a small number of global companies, as governments and the public hasten to protect themselves from getting sick.

Between 2004 and 2007, vaccine sales across the industry soared an average of 32 per cent each year, with flu vaccine leading the way. That is roughly four times faster than any other pharmaceutical product.

In a year that will be remembered for widespread public worry about the H1N1 virus, or swine flu, vaccines have become a $24-billion business. Analysts predict the global vaccine industry will top $40-billion by 2012. For companies like Glaxo, Sanofi-Aventis, Merck & Co., Novartis AG and Pfizer Inc., the fear of a pandemic has translated into a financial windfall that has been years in the making. Worldwide, nearly 1 billion doses of H1N1 vaccine have been ordered in 2009.

This is the story of how that happened - how Flu Inc. grew out of nowhere, transforming a once struggling business characterized by lab closures and lawsuits into a high-profit industry in less than a decade, and of the steps the pharmaceutical industry has taken to ensure the dollars keep flowing.

The change is driven by a new way of thinking in government about how to approach future threats of a flu pandemic. Health officials have begun to see merit in pursuing a strategy of stockpiling vaccines, even at a much higher cost per dose than they paid in the past.

Behind all this, of course, is a public that demands to be protected from the worst strains of influenza. This year, about 40 per cent of Canadians got the vaccine for H1N1 - the highest adoption of a flu shot the country has ever seen. Those shots are responsible for limiting the spread of the disease and, most likely, for saving lives. But even as the H1N1 threat subsides after killing more than 400 people in Canada, the business of fighting flu is arguably still in the early years of its growth.

Single page

Follow on Twitter: @PwaldieGLOBE

 

In the know

Most popular videos »

Highlights

More from The Globe and Mail

Most popular