Influenza Vaccine Production
Impact of technology, scale and other
vaccines on financial viability
Martin Friede
World Health Organization
Investment and time to production for 20M
dose/yr (on an existing vaccine campus)
Investment required
(US$ millions)
1000
IIV
Tissue Culture
100
IIV
Egg
10
LAIV
Egg
1
0
2
4
6
Years
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WHO-HHS Meeting on Business Models, DC, Jan 2013
8
10
12
Investment and time to production for 20M
dose/yr (on an existing vaccine campus)
Investment required
(US$ millions)
1000
IIV
Tissue Culture
100
IIV
Egg
10
Cost per
Dose
LAIV
Egg
1
Market
0
2
4
6
Years
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WHO-HHS Meeting on Business Models, DC, Jan 2013
8
10
12
Investment and time to production for 20M
dose/yr (on an existing vaccine campus)
1000
Investment required
(US$ millions)
?
IIV
Tissue Culture
100
?
IIV
Egg
10
New vaccine
technologies ?
LAIV
Egg
1
?
?
0
2
4
6
Years
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WHO-HHS Meeting on Business Models, DC, Jan 2013
8
10
12
Where are the costs ?
CAPEX (approx: for 20M dose IIV facility)
Offices
$ 4M
Pilot
$5M
Bulk 1
$ 20M
Water
$ 1M
QC
$10M
Filling
$10M
2y
packaging,
storage
$3-6M
Power
$ 2M
Waste
$ 2M
 For 1 vaccine: ~$60 M ($60M/product) =~$3/dose capacity
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WHO-HHS Meeting on Business Models, DC, Jan 2013
Where are the costs ?
CAPEX (approx: for 20M dose IIV facility)
Offices
$ 4M
Pilot
$5M
Bulk 1
$ 20M
Water
$ 1M
Bulk 2
$ 20M
Power
$ 2M
Bulk 3
$ 20M
Waste
$ 2M
Bulk 4
$ 20M
QC
$10M
Filling
$10M
Lyo
Lyo
$10M
$10M
2y
packaging,
storage
$3-6M
 For 1 vaccine: ~$60 M ($60M/product) =~$3/dose capacity
 For 4 vaccines: ~$120M ($30M/product) = ~$1.5/dose capacity
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WHO-HHS Meeting on Business Models, DC, Jan 2013
CAPEX: 2M vs 20M dose facility
Offices
$ 4M
Pilot
$5M
Bulk 1
$ 10M
Water
$ 1M
QC
$4M
Filling
$3M
2y
packaging,
storage
$2M
Power
$ 2M
Waste
$ 2M
 2M dose facility: ~$30 M =~$15/dose capacity
 20M dose facility: ~$60M =~$3/dose capacity
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WHO-HHS Meeting on Business Models, DC, Jan 2013
R&D and OPEX: egg derived IIV
 R&D costs for egg-derived seasonal IIV
– Preclin, phase I, II, III adult, phase I, II, III children: $3-15M
– Qualification and validation of equipment: $2-3M
 OPEX
– Variable costs:
• Supplies: clean fertilised eggs or flock plus chicken feed (12 months).
– @$1/egg
– If yield ~45ugHA/egg = $1/dose.
– If yield ~22ug HA/egg = $2/dose
• Diafiltration disposables, filters, sucrose, vials / syringes …etc.
– Fixed costs: Labor, overheads.
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WHO-HHS Meeting on Business Models, DC, Jan 2013
Labor costs
 Highly variable from country-to-country.
 For influenza vaccine labor only needed for 4-5
months/year.
– Pay staff to do nothing rest of year
– Make N- and S-hemisphere influenza vaccine
– Make other vaccines rest of year
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WHO-HHS Meeting on Business Models, DC, Jan 2013
Cash-flow spread sheet
(hypothetical costs !! Egg based IIV)
doses (1000)
Materials
Labor
Indirect costs
single vaccine facility
2M/yr
20M/yr
2000
20000
%
%
4000
31
40000 65
4000
31
10000 16
2000
6000
4 vaccine facility
2M/yr
20M/yr
2000
20000
%
%
4000
44
40000 81
1333
15
3333 7
1000
3000
Total costs
10000
56000
6333
46333
CAPEX (pro rata for influenza)
Depreciation (10 yr linear)
30000
3000
60000
6000
27000
2700
30000
3000
Outflow
Outflow/dose (cost)
13000
6.5
62000
3.1
9033
4.5
49333
2.5
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WHO-HHS Meeting on Business Models, DC, Jan 2013
Impact of high variable costs
 CAPEX and R&D contribution per dose less critical than
for other vaccines
– Limits benefit of 'push' support
 Critical impact of yield, cost of egg..
 Critical impact of packaging and overfill
– 10 dose vial << 1 dose vial (60% overfill) ~< prefilled syringe
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WHO-HHS Meeting on Business Models, DC, Jan 2013
Seasonal Influenza Purchase and
costs by region
Survey 2011
Region
Number of
countries
responded
Doses purchased
2008-2009
2009-2010
Costs/dose (USD)
Range
Average
PAHO
23
60,445,643
71,786,028
2.0 - 7.0 $
3.4
EMRO
8
1,438,000
1,359,000
2.0- 5.5 $
4.2
SEARO
1
2,200,000
2,400,000
5.9 - 7.3$
6.0
WPRO
8
11,857,860
11,056,420
6.9 - 11.0$
9.4
Total
40
75,941,503
86,601,448
2.0 - 11.0 $
5.8
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WHO-HHS Meeting on Business Models, DC, Jan 2013
Conclusions
 There is economy in scale.
– A large manufacturing facility more viable than a small facility, but requires large
market.
 A small facility more viable if labor/infrastructure costs shared across
several products
– Need to identify other vaccine products that are sustainable
 Seasonality critical ! Supply of raw materials, labor, etc.
 Investment and Cost/dose for LAIV much lower than IIV
– But market may also be lower
 Investment for tissue-culture IIV higher than for egg IIV
– Very large-scale required to be economically competitive
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WHO-HHS Meeting on Business Models, DC, Jan 2013
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Inference
 Each manufacturer should establish a cash-flow
model using local costs and predicted market to
identify optimal production model
 Local production can be an issue of national
security, and may justify local procurement at a
higher price than international tender.
– Cash-flow modeling will provide an indication of subsidies
that will be needed.
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WHO-HHS Meeting on Business Models, DC, Jan 2013