Therefore, understanding what is known and unknown about pricing new vaccines is important to not only business executives, marketers, product managers and finance specialists but also public health officials, scientists and clinicians.ĭiptheria, Tetanus toxoids and acellular Pertussis (DTaP) Pricing could even contribute to the eventual withdrawal of a vaccine, as may have happened with LYMErix, the Lyme disease vaccine. 6 As the FluMist experience shows, initial pricing can have ramifications for many subsequent years. The underutilization of an important vaccine can greatly impede disease control and affect many lives for many years.
#2 BY 2 PRICING METHOD MAP SOFTWARE#
4, 5 Poor adoption of a new vaccine can have much greater ramifications than poor adoption of an article of clothing or software program. Changing a vaccine's price does not alter the number of people at risk for an infectious disease but may affect vaccination compliance, potential purchaser interest, third party payer coverage, and a manufacturer's profit margin. A new vaccine price can have substantial short- and long-term adoption consequences. Table 1 lists key infectious disease vaccines that have reached the US market since 1990, excluding vaccines such as anthrax and plague vaccines licensed exclusively for military anti-bioterrorism use. This may have allowed MedImmune to take greater advantage of the subsequent influenza vaccine shortages of 20.Ĭompanies expend considerable effort and resources to determine the optimal price for a new product (whether the product is a vaccine, drug, medical device, article of clothing or computer technology), recognizing the impact that pricing has on a new technology's adoption. 3 It is quite possible that establishing a lower first year price may have encouraged first year adoption, secured a greater initial market share, and propelled FluMist to greater future success. 2 Chastened, MedImmune slashed FluMist's price to $23.50 per dose the following influenza season where its price has since hovered. This financial debacle left MedImmune with large inventories of unused vaccines and led to the dissolution of the partnership between MedImmune and Wyeth in April 2004. While FluMist's relatively high price was not the only reason behind its poor adoption (e.g., skepticism remained about the live virus' safety and the 5 to 49 year old approved population), it certainly played an important role. However, first year sales fell far (over 75%) short of initial projections, as major insurers and purchasers balked at covering and carrying the high-priced vaccine when a viable and much less expensive inactivated influenza vaccine already existed. Focusing on these advantages and buoyed by initial year sales projections of 4 to 6 million doses, MedImmune and Wyeth sunk $50 million in marketing and advertising and established a $40 to $70 per dose price, over four-times that of the intramuscular vaccine. Much optimism and anticipation accompanied the approval of FluMist, a live attenuated influenza virus intranasal vaccine that seemed to be a less painful and more convenient alternative to standard intramuscular influenza vaccine, especially among children.
The commercial trials and tribulations of FluMist, since its introduction to the US Market in 2003, highlight the importance of initial vaccine pricing and how a high price can impede a new vaccine's use and success. While the biomedical literature contains some studies that have addressed these components, there is still considerable room for more extensive evaluation of this important area. Typically, pricing strategy consists of the following eleven components: (1) Conduct a target population analysis (2) Map potential competitors and alternatives (3) Construct a vaccine target product profile (TPP) and compare it to projected or actual TPPs of competing vaccines (4) Quantify the incremental value of the new vaccine's characteristics (5) Determine vaccine positioning in the marketplace (6) Estimate the vaccine price-demand curve (7) Calculate vaccine costs (including those of manufacturing, distribution, and research and development) (8) Account for various legal, regulatory, third party payer and competitor factors (9) Consider the overall product portfolio (10) Set pricing objectives (11) Select pricing and pricing structure. Pricing can have a considerable impact on new vaccine adoption and, thereby, either culminate or thwart years of research and development and public health efforts. New vaccine pricing is a complicated process that could have substantial long-standing scientific, medical and public health ramifications.
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