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Chiron Vaccines Feedback on Financing Vaccines for the 21 st Century

Chiron Vaccines Feedback on Financing Vaccines for the 21 st Century Clement Lewin VP Govt. Affairs & Immunization Policy June, 2004 Case study: Chiron’s investment of ~$800 million in the US influenza vaccine market Market size & Growth Potential

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Chiron Vaccines Feedback on Financing Vaccines for the 21 st Century

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  1. Chiron Vaccines Feedback on Financing Vaccines for the 21st Century Clement Lewin VP Govt. Affairs & Immunization Policy June, 2004

  2. Case study: Chiron’s investment of ~$800 million in the US influenza vaccine market Market size & Growth Potential ~80 million people immunized and vaccination recommended for ~185 million people A commitment to achieving Healthy People 2010 goals Public / Private partnerships in place to increase coverage rates The right financing conditions Reimbursement levels not a barrier to immunization Existing pricing levels justify long-term investment Capital investment in production capacity to meet demand Research and development investment for next generation products Currently, under the right circumstances companies will invest in the US vaccine market Financing was only one of the factors impacting Chiron’s decision

  3. Low coverage rates in adolescents and adults compared to children Delays in funding coverage for newly recommended vaccines The negative impact on supply of statutory price caps imposed at the time VFC was enacted Chiron commends the report highlighting issues with the current system

  4. Immunization coverage rates have reached unprecedented levels in children Progress in reducing geographic and socio-economic disparities New vaccines have been added to the immunization schedule Varicella, Hepatitis A, Pneumoconjugate The majority of children have access to new vaccines Single tiered system as opposed to two-tiered system More children are being vaccinated in their “medical home” However, the successes of the current system are not emphasized Current system has reduced the burden of vaccine preventable disease in children

  5. Impact of non-price factors on vaccine supply and coverage Perceptions of value of vaccines Increasing regulatory burden Implementation of the voucher system Will replacing the system with a government subsidy and voucher plan improve immunization rates? Can such a program be administered efficiently? Pricing based on a calculation of societal benefit Will additional risks to vaccine development be created by an inability to project price? Will calculation of the societal benefit of vaccines could turn into a “black hole”? Will calculation turn into a price cap? Will the IOM proposals assure access to vaccines or sustain their future availability? Ir is unclear whether the proposal is workable or will be better than the current system

  6. Rotateq 75,000? FluMist 38,000 Prevnar 39,000 Varivax 11,000 Increasing Requirement for Pre-Licensure Data PedvaxHIB™ 6,000 Recombivax HB 1,200 1980 2010

  7. Impact of non-price factors on vaccine supply and coverage Perceptions of value of vaccines Increasing regulatory burden Implementation of the voucher system Will replacing the system with a government subsidy and voucher plan improve immunization rates? Can such a program be administered efficiently? Pricing based on a calculation of societal benefit Will additional risks to vaccine development be created by an inability to project price? Will calculation of the societal benefit of vaccines could turn into a “black hole”? Will calculation turn into a price cap? Will the IOM proposals assure access to vaccines or sustain their future availability? Ir is unclear whether the proposal is workable or will be better than the current system

  8. Incentives for vaccine development at Chiron are not increased by a system of subsidies, mandates and vouchers Lack of clarity on methodology & implementation mechanisms Societal benefit calculation may create de-facto “price cap” Providing financing will not necessarily lead to increased coverage rates in adults and adolescents Need to learn from experience in children Incremental improvements to the current system should be considered Increasing 317 Funding or expanding VFC coverage to the underinsured Increasing providerchoice of vaccines Removing price caps for older vaccines Improving adolescent and adult immunization infrastructure Conclusions Not clear that this dramatic shift is required or desirable

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