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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 a new market, created by this pandemic scare," Dr. Ossi said.

How the flu vaccine industry was built

Vaccines have always been a business. They've just never been a very good business.

"We were losing money," said Claude Vezeau, former chief executive officer at Montreal-based IAF BioChem International, Canada's largest maker of vaccines in the 1990s. "All vaccines were losing money."

The problem has been rooted in the cumbersome process of vaccine production and in the public's complacency. Alan Davies, the head of Canada's famed Connaught Antitoxin Laboratory at the University of Toronto, once lamented: "People are willing to pay more for a bottle of headache tablets than they are for a vaccine that will protect them for many years." Connaught, too, was a money-loser.

The idea of inoculating people against disease dates back to 1796 when British doctor Edward Jenner noticed that milkmaids appeared to be immune to smallpox because of their exposure to a mild form of pox carried by cows.

Dr. Jenner took puss from a lesion on the hand of a milkmaid and inoculated a young boy. When the child didn't become ill with smallpox, Dr. Jenner deduced that a small dose of a disease could protect a person from a more serious illness (the word vaccine is derived partly from "vaca," the Latin word for cow).

More than two centuries later, making vaccines on a large scale remains challenging. Vaccines are still made primarily from tiny bits of pathogens, the disease-causing agents of a virus. It can take months to get the formula right, and flu viruses are always changing. The manufacturing process is also clunky and relies on techniques developed 50 years ago in which a virus is injected into chicken eggs to multiply.

Here's how the process works: Like any virus, flu will only grow in living cells. One of the best places to grow it is in fertilized chicken eggs. (Pigs and humans are also good, but less practical.) Eleven days after the egg is fertilized, a hole is drilled into the eggshell and the virus is injected into the fluid surrounding the embryo. After the virus infects the embryo, it multiplies. Machines then crack open the eggs and the virus-filled fluid is removed.

The virus is chemically inactivated, usually with formaldehyde, and used as the "antigen" of a flu shot. Antigen is short for antibody generator. When injected into the body, it's the antigen that provokes an immune response that remembers the code of the virus that is attacking the body.

The antigen-making process can take months because the eggs have to be at the right maturity. The virus also grows slowly and it can take as many as three eggs to make one shot of flu vaccine. Then there are the chickens that produce the eggs - they have to be kept in steady supply, and healthy, since producing enough vaccine for an entire country can take millions of eggs.

"It's very cumbersome to make flu vaccine," Dr. Ossi said.

Heavy regulation and a lack of a broad customer base - governments are the primary buyers - left many drug companies with little incentive to make vaccines. Why spend time on such a low-margin business as vaccines when a company could make a fortune developing a new blockbuster drug?

In Canada, where vaccine making was once largely left to public institutions, the picture was no brighter. The country's largest facility, the Connaught lab, earned fame as the site of Frederick Banting and Charles Best's insulin discovery. But it struggled financially for years before being bought by French drug giant Sanofi-Aventis.

Canada's other large vaccine facility, the Institute Armand-Frappier in Quebec City, didn't fare much better. By the mid 1980s, its owner, the University of Quebec, could no longer shoulder the financial burden, and the facility was sold to Mr. Vezeau's IAF BioChem - which also struggled.

Crowds wait at the North York Civic Centre for the H1N1 vaccination in Toronto, Oct. 29.

How the world changed for vaccines

But all of that began to change with the first hint of a pandemic on the other side of the world.

The outbreak of H5N1 in Hong Kong in 1997 was relatively small - just 18 people who handled birds - but six of them died. Such a high death rate drew immediate attention from medical experts around the world. Fears of a much bigger death toll began to percolate at government levels.

Like many countries, Canada began working on a pandemic preparedness plan. Led by John Spika, a senior infectious disease official at Health Canada, federal and provincial bureaucrats began drawing up models of a potential outbreak that could kill up to 58,000 Canadians and do $30-billion worth of damage to the economy. The key to fighting such an outbreak, they believed, was securing an abundant supply of vaccine.

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