Which is Worse—Bird Flu or the Government's Reaction to Bird Flu?


Lest we forget, the H5N1 bird flu virus is still lurking out in the world. One day it may hit the right combination of genetic changes to transform itself into a pandemic disease in humans. Humans may be especially vulnerable because we have never developed immunity to the hemagglutinin 5 gene (H5). So what to do?

Making a new vaccine targeted at controlling the H5N1 virus would be really helpful. One problem–who's going to put up the money to do it in advance? Such a vaccine is commercially viable only when the disease has already broken out and, unlike seasonal flu vaccines, there are no recurring revenues.

One could imagine a company deciding to take the risk of producing a stockpile of the vaccine in advance and waiting to sell it at a tidy markup if there's an outbreak. However, given the likelihood of a panicky government response, e.g., seizing the vaccine or imposing price controls, most companies would conclude that a stockpile strategy is too risky.

Perhaps the biotech company Novavax has hit upon a good strategy-devise a new way to make vaccines quickly in the event of outbreak. Right now seasonal flu vaccines are produced using a decades-old technology of growing them up in chicken eggs, a process that takes months. As the Washington Post reports:

Novavax said yesterday that its bird flu vaccine elicited a robust immune response in humans, moving the biotech a step closer to licensing its pandemic vaccine production system.

In the trial, 160 patients received two vaccine injections, of 15 to 90 micrograms, one month apart. Of the patients who received the highest dosage, 94 percent produced antibodies to neutralize H5N1, an Indonesian strain of bird flu that emerged in 2005 and has been linked to 110 deaths….

Novavax has partnered with GE Healthcare to reach the rest of the world by providing other countries a system to quickly mass-produce vaccines.

"If you truly believe a pandemic outbreak is likely, there is reason to believe foreign governments and the U.S. will clamp down and control the supply," [said Ken Trbovich, an analyst with RBC Capital Markets.] He added, "Other places in the world may have a lot of money, but no amount of money will get you vaccines in the case of a pandemic."

How to get around this government-risk?

Novavax has partnered with GE Healthcare to reach the rest of the world by providing other countries a system to quickly mass-produce vaccines….

GE is developing the production equipment, which is cheap to set up and run in case of a pandemic…

"We see no reason to invest additional money of our own into the pandemic vaccine when we can wait for a foreign government that needs this vaccine to put money in," Singhvi said.

If there is an outbreak, then desperate governments will buy and set up Novavax' and GE Healthcare's new speedy vaccine production system.

Whole Post article here

Why I think there may never be another pandemic again here.