Vaccines are a proven and cost-effective preventative therapy for numerous disabling and fatal diseases, producing significant public health gains that generate tens of billions of dollars in health system savings each year. Only recently, however, have vaccine producers experienced the commercial returns commensurate with this long record of positive public health performance. Vaccines are now the industry standout in delivering high rates of revenue growth, with double-digit increases of 10% to 15% annually, which are expected to continue for the next several years, significantly outpacing the 6% to 7% growth rate we see in traditional pharma.
Key growth factorsThere is significant untapped potential in the preventive vaccines market. Unmet needs remain since many diseases still have low immunization rates or no available vaccine. Financial analysts have projected the market to reach $39 billion in 2015. The World Health Organization (WHO) expects the global market to soar to $100 billion by 2025, with 120 new products flowing from company pipelines over the next decade.
A range of factors are driving this growth. Our experience in the industry has highlighted three: an increase in awareness of infectious diseases, changes in the global reimbursement landscape, and higher prices for new vaccines.
Increased awareness of infectious and communicative diseases: National governments are the dominant customer globally and play a substantial role in purchasing, enforcing safety regulations, and influencing uptake. Over the past decade, governments and supranational organizations have expressed growing concern over public awareness of infectious disease prevention, dedicating substantial investment in mass immunizations and outreach programs in efforts that translate into opportunity for manufacturers.
Global outbreaks of vaccine-preventable diseases have driven much of the growth in public awareness. Seasonal influenza outbreaks like the H1N1 strain have claimed many thousands of lives and taken enormous tolls on national health expenditure. Growing awareness provides the impetus for governments to invest in programs aimed at preventing onset of future outbreaks. These programs supply funding for mass immunization programs, which play an instrumental role in elevating uptake. The WHO, for instance, now supports campaigns that provide not only funding but bottom-up infrastructural support, through numerous public outreach programs for vaccination, including sponsorship of the annual World Immunization Week.
Non-profit and non-governmental organizations, such as the Gates Foundation, the Clinton Health Access Initiative, Global Alliance for Vaccines and Immunization (GAVI), as well as many others are increasingly influential as brokers in the negotiation of vaccine purchasing for ministries of health for developing nations and/or as advocates for vaccine use. Each of these groups are receiving more philanthropic support. They also provide access to medications in emerging and developing markets, prioritize vaccination on public health agendas, and help shape national immunization program strategies on coverage, pricing, and uptake.