July 18, 2017
A Sanofi executive is disputing claims it rejected a fair-pricing provision in a pending agreement to license two Zika vaccine candidates developed by Army scientists.
“Sanofi Pasteur did not reject a specific fair-pricing term proposed by WRAIR [ Walter Reed Army Institute of Research] as part of the licensing negotiations,” Gavin Zealey, senior director business development for Sanofi Pasteur, wrote in a letter to the Army dated July 12 and posted July 14 by the pharmaceutical company. “While we discussed pricing in general, both parties recognized it is premature to set pricing terms at this stage for a technology that will require substantial financial and intellectual capital with no guarantee of a marketable vaccine.”
The letters are the latest development in pricing concerns raised after the Department of Defense announced plans about a year ago to give exclusive, revocable, royalty-bearing licenses to Sanofi Pasteur for two pending Zika-related U.S. patent applications developed by the government. The debate links to a much larger debate about drug pricing, especially when the basic science underlying these products comes from federally funded research.
Senate Minority Whip Richard J. Durbin (D-Ill.) thinks the issue is important enough to merit a public hearing. “Sanofi’s recent response precisely demonstrates why the U.S. Army should heed our calls to hold a public hearing regarding its Zika vaccine licensing plans,” Durbin said in a statement emailed to Bloomberg BNA July 18.
“There are too many unanswered questions and contradicting reports. A public hearing would bring much needed transparency to the process and would help to ensure good stewardship of the significant contribution by U.S. taxpayer dollars,” he said.
David Loew, executive vice president and general manager of Sanofi Pasteur, the Pennsylvania-based vaccine division of Sanofi, sent letters posted July 16 responding to a half-dozen concerned senators. Those lawmakers, including Durbin and Sen. Bernie Sanders (I-Vt.), noted Sanofi received $43 million in federal dollars to test a potential Zika vaccine. They expressed concern the Army could provide an exclusive license to Sanofi “without any parameters to ensure a reasonable price.”
“We are more than eager to see a vaccine come to market in the near future,” the four Democratic and two independent senators wrote in a June 26 letter, to the Army. “However, it is imperative that any forthcoming vaccine is accessible and affordable for all.”
Loew responded to the senators, “Sanofi Pasteur is committed to leveraging its flavivirus vaccine development and manufacturing expertise to deliver and ultimately price a Zika vaccine in a responsible way.”
He added that vaccine development is a high-risk endeavor and Sanofi Pasteur was the only entity to submit a license application for the Army’s Zika vaccine candidates.
“Although we continue to negotiate the terms of a licensing agreement with WRAIR, it is important to note that our potential license would not cover all vaccine technologies and thus would not prevent other companies from pursuing vaccine candidates based on alternative technologies in order to create a robust and competitive Zika vaccine marketplace,” Loew said in his letter to the senators.
The Army’s potential vaccine is one of several vaccine candidates developed by federally funded scientists. Zika became an international public health emergency last year after scientists found a link between birth defects and mothers of babies infected with the mosquito-borne disease.
Arthur L. Caplan, head of medical ethics for New York University’s medical school who also works with the Center for Vaccine Ethics & Policy, told Bloomberg BNA vaccine development has its own unique moral challenges when it comes to pricing. Unlike drugs and devices used to treat the onset of a disease, vaccines are preventive measures that are a major line of defense against pandemics. He also noted vaccines are often in demand in the poorest places on earth.
Governments should step in and offer incentives for companies to keep the profit margin of their vaccine divisions relatively low, Caplan said.
Caplan acknowledged the risk companies take when they agree to license a vaccine. But even when those companies subsidize the costs, these vaccines are often still too expensive to the populations who need them and require additional aid from organizations like the Gates Foundation, he said.
“You can’t carry the cost of the Zika vaccine on the backs of poor, illiterate, pregnant women in rural Brazil. That just isn’t sustainable,” Caplan said.
“I get their argument: We came in and there aren’t very many vaccine manufacturers left, and we did the gamble. And diseases come and go, so maybe there’s no market for it next year. I get all that. It’s very risky,” Caplan told Bloomberg BNA in a July 18 interview. But the reward shouldn’t be in the price of the vaccine, he said. “It’s too burdensome on the people who need it.”
The U.S. Army Medical Research & Materiel Command did not respond to a request for comment before deadline.
To contact the reporter on this story: Jeannie Baumann in Washington at email@example.com
To contact the editor responsible for this story: Randy Kubetin at RKubetin@bna.com
Sanofi's letters to the senators are available at http://www.news.sanofi.us/press-statements?item=984.The Army letter is available at http://bit.ly/2uEQBFN. The senators' June 26 letter is available at http://bit.ly/2vy4VN1.
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