When Gavi was first launched, Big Pharma was abandoning the vaccine business.
“It had become unprofitable because only the rich western markets were … willing to pay what they were worth,” said Dominic Hein, head of market configuration at Gavi.
Today, the association helps poorer countries pay for vaccines that meet the quality standards of the World Health Organization. The Whey Institute is an unconditional provider and pumps four out of 10 vaccines funded by Gavi. It was “the pioneer in the manufacture of low-cost, high-quality vaccines,” Hein said.
Partnering with Gates has fueled the company’s position in the healthcare world, helping it reach new levels of profitability, even if people sometimes scratch their heads when they hear the name of Serum Institute of India.
“We will have to change the name to describe exactly what we are doing,” reflected Adar Poonawalla, who took office in 2011 as CEO of the company, which is still publicly traded. “Maybe in a year or two we will see it.”
Living a globetrotting lifestyle
Despite all their work on behalf of the masses, the Poonawallas are indisputably wealthy and like to brag.
Cyrus Poonawalla, who remains president of the company at 79, is number 165 on the Forbes billionaire ranking, with an estimated net worth of $ 11.5 billion. (A different classification estimated that the pandemic increased his wealth by a quarter, considering him the 86th richest man in the world.) His personal website shows photos of him flirting with Gates and posing with his sports cars and limousines.
Adar, who along with his glamorous Bollywood-bound wife Natasha, has become a popular food for the subcontinent’s tabloids, told GQ India that, under normal circumstances, he would be in Cannes on a yacht this summer. Instead, it is close to the company’s headquarters in Pune, where one of its offices is a restored A320 jet. 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 have been better known for our lifestyle; now people understand the work we do, “he acknowledged before the brilliant man, who presented it on the cover of his June issue as the” Vanguard of the vaccine. “
In fact, the company estimates that 65 percent of the world’s children receive at least one vaccine made by the Serum Institute.
Some of its products were specifically designed for the needs of poor countries. For example, your oral rotavirus vaccine is heat stable, so it doesn’t have to be kept cold, as it is distributed in countries without constant electricity.
But other of its products are variants of advances made by global drug giants collectively known 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. However, the Serum Institute has never created a one-of-a-kind vaccine, which means its entire business model relies on its scientists taking advantage of other companies’ basic research to understand a disease and the body’s immune response.
Once the Serum Institute has produced a quality version of the same vaccine created by Big Pharma, it can manufacture large amounts of doses quickly and inexpensively. The benefit to people around the world is a matter of “basic math,” said Poonawalla. “Once you produce more than 100.2 million doses of any product, you know that costs are substantially reduced.”
However, regulations have made it difficult for the Whey Institute to enter rich markets. This is not because the company cannot meet quality standards, he said, but because Western regulatory systems preserve patent protections for vaccines in complicated ways.
“As a result, the European [and American] people have been paying hundreds of dollars for a vaccine instead of $ 20 or $ 10 for a vaccine, “he said.” This is one of the things that President Trump has identified as semi-fraud by Big Pharma, where the public has been exceeded and exploited. “
Challenging the global patent system
Poonawalla’s claims attack the crux of drug price debates in both the US and EU, which focus on whether patents and other incentives to satisfy unmet needs are being abused in the search for Profits. The goal of medical patents is to reward companies for the risks and costs of research and development. The Coalition for Epidemic Preparedness Innovations estimated that, taking into account some failed efforts, obtaining a vaccine only for the later stages of clinical trials costs up to $ 1.1 billion.
Therefore, European and American laws give the original developers of a new medicine a period of monopoly, when no one else can sell their medicine. While there are many mechanisms to extend this, generally within 15 years or so, the cheaper generic versions can start competing.
For vaccines, which are part of a class of drugs derived from living cells called biologics, there may be multiple layers of patents: for the active aspect of the formula, for the adjuvant that makes it work best, for the cell cultures used to grow the live parts, for the vaccine manufacturing process. This can indefinitely delay the introduction of lower priced generic biologics, known as biosimilars. The complicated (sometimes impossible) task of working with proprietary components makes it more difficult for potential competitors to lower prices.
Generic drugs can generally skip the clinical trials the original drug had to go through, as long as they can prove that they are chemically identical and have the same biology. Biologics are much more complex drugs, and therefore for biosimilars, “that equality cannot be guaranteed to the same degree,” said Paul Fehlner, a former intellectual property attorney at Novartis. It cannot be assumed that the Whey Institute’s versions of vaccines work in exactly the same way as those of the original manufacturers, in part because they may have modified something to circumvent a proprietary part of the process. That means they have to face an expensive list of clinical trials.
In the United States and Europe, “regulations are based on and reinforce patent strategies,” Fehlner said. And if a product infringes a patent in any way, even if it appears incidental, the product cannot be sold. Even Big Pharmas They are constantly suing each other in the United States for alleged patent infringement of organic products, with the goal of keeping competition out of the market for as long as possible.
A direct way to overcome these obstacles is to buy commercial rights. Poonawalla said he tried, and it is established practice for companies to sell these rights so that vaccines are sold in the developing world. But for rich markets, Big Pharma will not sell at an affordable price, or they simply refuse, he said.
