Merck’s Julie Gerberding, Former CDC Director, on the Future of Vaccines

6/24/11Follow @xconomy

Not many pharmaceutical executives can say with a straight face that if they are successful, they will really help millions of people live significantly longer and healthier lives around the world.

Julie Gerberding, the former director of the U.S. Centers for Disease Control and Prevention, has been in one of those rare positions for about the past 18 months as president of Merck’s vaccine unit. At Merck (NYSE: MRK), she has been learning the ins and outs of a $5-billion-a-year operation that makes 14 of the 17 vaccines the CDC recommends for children, and nine of the 10 recommended for adults. It would be an understatement to say this job carries a huge social responsibility, both to insure steady supplies of vaccines already on the market, and to develop new ones.

I met with Gerberding earlier this week while she was in Seattle for the Pacific Health Summit, an invitation-only gathering of health leaders in academia, industry, and government. She was there to discuss the next big challenges in the field of vaccines. Part of what brings Merck, Pfizer, GlaxoSmithKline, and other major vaccine companies into the conversation is the realization that vaccines are no longer just a low-margin, high-liability corporate backwater. New technologies propelled the vaccine market to more than $22 billion in sales in 2009, and projections are that it will keep growing by 10 percent a year over the next five years, according to Kalorama Information, a market research firm. For a diversified company like Merck, with $46 billion in total sales in 2010, vaccines are a sizable business segment.

Here’s what Gerberding had to say about the opportunities she sees in the vaccine business, plus a bit about what she’s learned in making the switch from the public sector to the private sector. The interview is edited for length and clarity as always.

Xconomy: Can you talk a little about what kind of scope you have in Merck Vaccines, in terms of people, facilities, and the R&D portfolio?

Julie Gerberding: Vaccines have been in Merck’s DNA forever. We have a tradition of being the scientific source of many of today’s modern vaccines. It’s been a core part of the company, and it will remain a core part of the company. It’s just one of those things Merck has been committed to, and it’s one of the ways we bring value to people. We have a very strong pediatric portfolio, and one of our unique strengths is our adult portfolio. We have a very broad spectrum of vaccines available for adults, either manufactured by Merck or licensed for sale by Merck.

Julie Gerberding

Where we haven’t traditionally focused is in the global environment. The company was very focused in the U.S. and Europe, and now in the last few years has initiated a very broad expansion into new markets. I don’t refer to them as emerging markets. They are new markets that have certainly emerged. We see tremendous unmet need, and tremendous opportunity for Merck to leverage our innovations in ways that bring these products to the kids who need them most.

X: You occasionally hear market research reports say the vaccine market is poised to grow, and build on the success of Gardasil and Pfizer’s pneumococcal vaccine (Prevnar). Do you see that phenomenon happening? Are vaccines taking on increasing importance, or a higher priority, within Merck? And if so, is there a tension between building up a market with high-value vaccines, and some of what these people here [health officials] are looking for, which is low-priced vaccines that are used for a lot of people in the developing world?

JG: It’s very synergistic. No matter what market you are in, we want to deliver value at the best possible price. The fastest way to achieve a price improvement is through volume. So, the more manufacturing we do, the more we cover our fixed costs, and the less expensive on a per-dose basis our vaccines will become. So the more global our outlook, and the more we reach people in the developing world that are the hardest to reach, the more value we bring.

X: What are the biggest challenges in this job? I heard you talk on the panel about so many different priorities people have. There is getting vaccines we already have to people who need them, developing novel ones, optimizing existing ones, stockpiling for pandemics. What are your top priorities, and lower priorities?

JG: Our top vaccine priority is to get vaccines to the people who need them most. We are really working hard on access and coverage and completion. We have some products where we can give the first dose, but we need to make sure people get all the doses they need so they are completely covered. We have some challenges in opening markets in new environments, and really reaching the people there. And we have challenges in financing, in things like GAVI (Global Alliance for Vaccines and Immunizations) mechanisms, getting them to work in a reliable, long-term way. One of the things I think all the manufacturers face, whether they are in an emerging market environment or a multinational company, is that we need stability of forecasting. We can’t live in a situation where we might be able to provide 60 million doses to GAVI this year, but next year, they might not have money. We need stable, long-term commitments so we can do our own production forecasting, and achieve those cost savings that will allow us to be able to offer vaccines at the access price. That seems like an easy thing to do. GAVI is talking about five years of funding, but one of the things people don’t understand about vaccine manufacturing is that they have a much longer runway than pills. Our planning horizon is 10 years, not five years. We’ve got to know what we are doing 10 years from now, because if we have to scale up our production capability or change something, it takes that long to commission a vaccine production facility, or de-commission one and change it to do something else.

X: Do you see a real advantage here, though, with vaccines in terms of not having the patent cliff issue like you see with drugs? Because these products aren’t as easy to cheaply copy like conventional small-molecule pills.

JG: Sure. The business model is very different. It’s not about trying to maximize your unit profitability fast before your patent wears out. With a vaccine, it’s about how can we continue to position the product, or evolve the product in its life cycle so that it continues to deliver value to people. That can be forever. Our measles vaccine has been around a long time, and it’s still delivering enormous public health value. We don’t have the patent cliff in our way. A bigger challenge is that we, all of us in the world of vaccines, can imagine innovations, bio-process improvements, other things that might improve our ability to lower costs, or speed up production, or localize production in new markets, but the regulatory environment hasn’t caught up with our innovation capability. For me, the biggest single issue is improving regulatory science so that we have the opportunities to implement and execute on bio-process innovations that we think will accelerate market access for poor people.

X: What exactly is the problem at the regulatory level?

JG: In vaccines, the process is the product. Any change you make in how you process your route to the vaccine actually changes the product. Often, you are faced with needing to do clinical studies, or make macro investments in a way that would simply discourage you from moving in that direction. That’s a little different from making a tablet. As long as at the end of the day you have the stated composition of matter, and quality, there’s more flexibility. There are more stringent controls of biologics, for safety purposes. The intent is right, but we need to figure out mechanisms where we can have a continuous quality improvement process that works for the regulators and also allows us to accelerate innovations that allow greater market access.

X: When you talk about regulatory agencies, and government agencies that are the purchaser of vaccines, you get into politics. That brings the whole vaccine-denier world into the equation. How big of an obstacle is that, and how do you deal with it?

JG: On a global basis, it’s a small issue today. Most people in the world are so grateful to have their child immunized. They see the diseases, and understand how life-saving those vaccines can really be. If you are thinking globally, it’s not the most important obstacle we face. But it’s clearly a powerful local issue in many westernized or developed countries. It’s a growing issue. We have to work harder to engage people in the conversation. And that conversation needs to be led by trusted and credible people, not necessarily vaccine manufacturers.

X: So do you just get out of the way then?

JG: No, we have a responsibility. The most important component of our contribution is that we do make trustworthy, reliable products that address health needs. We should be proud of it. These are critically important products for global health and local health. We don’t need to be silent about the contribution we are making, and our employees should take pride in it. Having said that, for people who have already made up their mind that there are issues around the need for vaccines, the manufacturers are not likely to be the best resource for changing their minds. People need to hear balanced information from trusted peers, and/or their doctor. That’s what we need to learn—what really does motivate people’s behavior. The old model would say ‘we just need to give people better information. If they have the facts, they’ll make the right choice.’ The new model is that it’s not a left-brain decision for many parents—this is a right-brain, heartfelt decision. While they can understand objectively that vaccines are important means of protection, when they are sitting with a child on the lap and deciding to give them a shot, it becomes emotional for the parent. Not all parents respond to that situation the same way.

X: When you look at the landscape of vaccines, there are maybe five or so major producers of vaccines left. Do you see much innovation out there beyond those companies, in small biotechs, and in the nonprofit world?

JG: I’m very bullish on vaccines, I think there is incredible innovation going on in the biotech environment. Innovations in antigens [new vaccine targets] and adjuvants [immune-boosting compounds], but also innovations in delivery methods and stability, in combinations that put more than one vaccine in a vial. There’s innovation in vaccine logistics, innovation in vaccine financing, and in partnerships, and translational research. The problem with vaccine innovation is that it isn’t fast. There’s a long runway for these products, and it takes a long time for these products to be commercially relevant and available. You have to be very patient. I’m learning.

X: What’s life been like for you in industry?

JG: I love it. The biggest surprise for me is working in a company where the passion and the commitment to science and integrity of science is as strong as it was when I was working for the CDC. I don’t feel like my work environment has changed very much in terms of what gets people up in the morning and motivates them to come to work. We have an incredibly passionate group of people, and I’m privileged to have a chance to work here.

X: Have you had surprises in the switch to industry, or impressions that might surprise your peers?

JG: From a personal perspective, there’s an enormous amount of learning. I’m not trained, and wasn’t brought up in a marketing environment. I have to learn how to think about value in ways that are focused on respecting what people really need and want, while at the same time keeping in mind what’s practical and feasible from a private sector perspective. Sometimes that balance is challenging. We have lots of great ideas about things we’d like to be able to do, but if they don’t make business sense, it’s going to be a lot harder for us to do them. Or, we have to creative and think about who we can partner with. How can we move this into a nonprofit? Or how can we get a venture capitalist to share risk on this? Can we create a joint venture? The exciting challenge for me is how we can figure out creative ways to do the things we want to do, because they are the right thing to do even when the business model isn’t oriented toward the blockbuster.

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  • Maurine Meleck

    Gerberding talks about the first model(which is not used anymore) that gave information to parents about vaccines. I beg to differ. We never got information on the negative side effects of vaccines. They need to start doing this now-and let the parents read the vaccine inserts before deciding. The autism community is not anti-vaccine(remember we vaccinated and that’s how our children got sick), but we are safe vaccine. Big difference here. No problem here if they do away with mandated vaccines and let people pick and choose what drugs should enter their childrens’ bodies and their own. Personal choice and parental consent will do it. If someone wants to give their child 10 vaccines on the same day–fine–their choice.
    maurine Meleck SC

    • Erwin Alber

      Vaccines are by their very nature as chemical and biological agents unsafe Maurine, which is why all the clamour for safe vaccines or green vaccines is a lot of nonsense. Vaccines need to be abolished, not made safer. Because it’s not a good idea to hold one’s breath waiting for this to happen, parents meanwhile just need to say NO to vaccines because this toxic garbage is injected into babies and children not to prevent, but to PROMOTE ill-health. Think about it: sick people are profitable – healthy people are not! The reactions, disorders, disabilities and deaths vaccines cause are consequently not as we are led to believe unfortunate, accidental “side”-effects, but their only and in my opinion INTENDED effect.

  • Aimee Doyle

    My son was vaccine-injured. I saw him develop seizures with his DPT, lose language and social skills with his first MMR, develop autistic behaviors with his second MMR, and develop self-injurious behaviors with subsequent vaccines. Until you’ve lived with a child who hits his leg so many times there are permanent bruises and yells at the top of his lungs for hours every night, I’m not interested in hearing about how vaccines are “safe.” I could accept the coincidence argument once, perhaps, but my son has regressed and shown adverse effects with each vaccine. He was diagnosed with autism at age 4. He is now 21, so I’ve been in the trenches a long time and I’ve read just about every study on the issue of vaccines and autism.

    Clearly vaccines are not always safe. The Supreme Court, in the Bruesewitz decision, noted that vaccines are “unavoidably unsafe”; that’s the reason we have a vaccine court — because there is a genetically vulnerable subpopulation of children who do not respond well to a vaccine, and may respond even worse to vaccines given together.

    I am skeptical about the “future of vaccines” unless the industry acknowledges that there may be problems for some children with some vaccines and abandons the “one size fits all” vaccination policy.

  • Jamie Jamison

    Oh boy, the Anti-vaccine nuts are at it again. The evidence linking vaccines and autism is garbage. Andrew Wakefield, the physician who published this information is a lying fraud who did so to make money for himself and a vaccine company that he was involved with. The thimerosal link was also discredited and most of the people pushing therapies to treat autistic children who were supposedly damaged by vaccines are lying frauds and snake-oil salesmen just like Wakefield was. Let me repeat, there is no scientific evidence, none whatsoever, that vaccines are in any way, shape or form linked to autism, anyone who says there is is either a) a lying fraud like Andrew Wakefield b) a lying fraud like the peddlers of various ineffective and/or dangerous “cures” for autism or c) ignorant.

    • http://www.facebook.com/candyce.estave Candyce Estave

      Not anti-vaccine, freedom of choice is more our bag… Yes, vaccine injured children are everywhere. You are a nut if you inject that vaccine, so go ahead get your damn flu shot. Who’s the nut now???

    • Erwin Alber

      You have swallowed mainstream and medical garbage propaganda hook, line and sinker Jamie. You need to get a grip of reality: vaccines have never prevented anything apart from health, sanity and common sense.

      To get a much needed reality adjustment, I suggest you watch the excellent lecture ‘Dr Wakefield defends his research’ on YouTube.

      If it’s any consolation to you, I believed in this vaccination nonsense as well for many years, until I found out that it was all a massive and dangerous fraud.

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  • Jessica

    Anyone who believes that vaccines are safe and go out of their way to defend them along with the companies who develop them for people are dumber than a bag of hammers and are being bought themselves.
    There is so much evidence that supports the fact that vaccines have dangerous side effects and that they even cause death. Parents who have dealt with sick children as a result of being vaccinated know how deadly these vaccines truly are and will continue to be.
    If you’re stupid enough to vaccinate your child(ren) and be brainwashed by all of the propaganda then I truly feel for your complete and utter ignorance and your children and that they have such moronic parents.
    I could continue – but, my comments have summed this topic up nicely.

    • Erwin Alber

      You have summed up this topic very nicely indeed Jessica! Based on my research I have arrived at the inevitable conclusion that vaccination is an organised criminal enterprise dressed up as disease prevention by means of junk science. In my books, vaccination is bioterrorism against civilians – particularly our young – and vaccines biochemical warfare agents and weapons of mass destruction.

      The fact that Julie Gerberding previously held a high position at the CDC is an example of the “revolving-door-policy” between vaccine policy-makers and the vaccine-industry and an illustration of the serious conflict of interest these people are involved in.

      In New Zealand, a few years ago a well-known TV journalist who was involved in the making of a documentary about the adverse effects caused by Merck’s genetically engineered hepatitis B vaccine was offered the job of New Zealand Public Relations Manager for Merck. Needless to say in return for the favour, the documentary was canned.

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  • Adam Hogan

    I am so worried ffor all off your children… Where are the polio cases in the western world? Tuberculosis? Smallpox? Prior to vaccines, disease killed 25% of children before the age of 10. Are they still dying at that rate? Are the rates of autism anywhere near that, even if it WERE caused by vaccines? You people are not only going to have children that die horrible, drawn out, disease related deaths at a much higher rate because you DON’T vaccinate, you are responsible for the resurgence of a number of highly deadly diseases that we had, as a society, almost managed to eradicate THROUGH THE USE OF VACCINES. Honestly, you people have fifty different conspiracy theories that blame everyone from big pharma to the government, and not one off them is really feasible. Obama can’t even hide a memo that says he knew that you wouldn’t be able to keep your doctor or your policy under the ACA when he said you would be able to, yet you think the government, big pharma, doctors, researchers, universities and more can all for DECADES lie to the public at large without one truly plausible whistleblower (the guy you met in a chat room doesn’t count. I mean a person who stands in the light of day, in front of the cameras, with his proof. An Edward Snowden of the vaccine industry.) You can say that they suppress it, but how many people over the years would have to be involved? How many MILLIONS of doctors, researchers, bureaucrats, politicians, janitors, and more would have to be involved in the production and distribution not just of the “bad” vaccines, but the “false” research from UNIVERSITIES, done by COLLEGE STUDENTS AND PROFFESSORS. not big pharma CEO’s, that has shown time and time again that vaccines have saved millions of lives in the last century…. I seriously worry that you guys must have some kind of paranoid psychosis to believe something like that.
    P.S. THIOMERSAL (IDK where it’s name got changed in popular vernacular to thimerosal, but that’s not what it’s called) is a preservative that is no longer used in vaccines in the U.S. because of fear-mongers like you guys. BUT, despite what Dr.Dipshit says, it contains non-toxic ETHYL mercury, as compared to highly toxic METHYL mercury. (It’s really about how the mercury is bonded, because mercury is the toxic part, but ethyl mercury can not be broken down by the body, and passes right through our systems. And yes, some small amount of free raical mercury will always exist in these situations… the average human ingests four times the amount of unbonded mercury PER DAY than they would receive from an injection of a medicine that uses thiomersal.
    P.S.S. I recommend the Skeptoid podcast to all of you. He does a great job of covering vaccine fears, and also covers a lot of other pop-culture phenomenon, from snake–oil salesmen (like chiropractors who don’t tell you that chiropractic is based on your flow of CHI (as in ancient Chinese energy fflows through the body, as per acupuncture. Yes, chiropractic is based on the same thing, and your chiropractor took classes in it. He does NOT offer physical therapy based science. If he does, he had better be a physical therapist, or he’s practicing medicine without a license.)) UFO’s, and conspiracy theories. Listen with an open mind to the ones about topics you DON’T believe, and then ask yourself WHY you don’t believe it. Then ask if the same can be said about your belief in vaccine conspiracy theories…)
    tl;dr summary – you guys are completely wrong. If you were right that vaccines don’t prevent disease, why don’t you know 20 kids with polio and have 20 friends who have lost children to smallpox?

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