Vaccines have become a bright spot for pharma and biotech. With the advent of blockbuster products such as Prevnar™ and Gardasil™, total annual vaccine revenues have grown on average almost 20 percent per year for the last 10 years. This significant, double-digit growth is expected to continue, driven by the commercial expansion of prophylactic vaccines and the emergence of therapeutic vaccines. However, vaccines present a unique set of challenges to the entities and institutions involved in their development, manufacturing, and distribution.
For over 20 years, Oliver Wyman has been at the forefront of the vaccine space, partnering with manufacturers, investor groups, private foundations, and global health institutions alike to develop differentiated answers to their strategic and operational questions. Through countless prior engagements with public health organizations, such as the Gates Foundation and WHO, as well as leading multi-national and developing-country vaccine manufacturers, Oliver Wyman has become a recognized vaccine thought leader with unparalleled industry knowledge, highly refined methodologies and datasets, and a deep expert network.
Oliver Wyman's vaccines expertise extends to:
Developed market growth strategy – Vaccine markets in developed countries represent the bulk of current revenues for most multi-national manufacturers, but low coverage rates in these markets represent a significant growth opportunity – just one percentage point increase could increase annual sales for some manufacturers by 100 million USD.
Emerging market entry and growth strategy – Oliver Wyman estimates emerging vaccine markets will grow on average five times faster than developed markets over the next five years. But to capture the opportunity, manufacturers must develop new business models (e.g. locally owned assets or new partnerships), to address the changing private versus public market dynamic, increasing competition from local and other international manufacturers, and an evolving regulatory environment.
Supply chain strategy and operational improvement – Commercial entities must take a critical look at the way they manufacture and distribute their products in emerging markets. If building new facilities, important decisions include proximity to current and potential markets; if expanding existing facilities, new capacity must be added without putting the current market supply at risk.
R&D portfolio and product profile optimization – Forty infectious diseases remain for which no approved vaccine exists, and other diseases like cancer may have cures in the vaccine space. Vaccine developers and investors have three choices:
- Pursue incremental innovation within existing vaccine-preventable diseases and markets.
- Extend existing innovation to new markets, which may require moderate to significant product profile redesign.
- Innovate around new disease targets, balancing the technical feasibility with potential market attractiveness.
Vaccines and broader pharma integration – In many commercial entities today, the vaccine unit often operates as a standalone line of business. However, integrating vaccines into broader biopharma can produce greater R&D innovation and other synergistic advantages. To successfully manage such a change, manufacturers need to recognize the inherent differences in the two spaces and identify the institutional knowledge, relationships, and assets that can be leveraged.