A study carried out by Charles River Associates (CRA) for Vaccines Europe (VE) in June 2023 investigates the state of the vaccines industry in the European Union (EU). The goal of the study was to “identify the factors affecting vaccine investment” throughout the value chain and “assess the attractiveness of the EU” compared to other global regions. The report, which can be accessed from the Vaccines Europe website, highlights challenges that the industry is facing and provides key policy recommendations for the future.
Encouraging vaccine innovation
“Vaccination brings significant value not only to public health but to the economy as well, and should be viewed as an investment, rather than a cost.”
Vaccines Europe describes vaccination as “one of the most successful health prevention tools” for disease eradication and control. To mine the benefits that it offers, the right environment for innovation is needed. Sibilia Quilici, Vaccines Europe’s Executive Director, describes the EU as the “home of vaccine production and innovation before the COVID-19 pandemic”. During the pandemic, she suggests, the “footprint grew”.
“Now, we can see potential for even more growth through the pipeline of new vaccine candidates. The vaccines industry is recognised as a key infrastructure for Europe. To ensure its sustainability and growth, we need this recognition to be translated into policy actions, maintaining the EU’s position as a leader within the vaccine ecosystem.”
In this post we look at the findings of the report and explore the key recommendations presented.
Lifting the rock
The report claims that there has been a concerning “relative decline in Europe’s attractiveness as a centre for innovation and manufacturing” over recent years. A clear example of this is pharmaceutical R&D expenditure; in the US this exceeded that of Europe by over €20 billion. Unfortunately, the “gap is widening”: 20 years ago, the difference was “only” €2 billion.
“Less attention has been paid to vaccines.”
Despite the small share that the vaccines industry has in the overall pharmaceutical industry (recent data suggest it holds 3.6% of the total world market for pharmaceutical products), it is “particularly important for the EU”. The European Commission industry scorecard acknowledges the health industry at the second highest level of investment value in comparison with other innovative industries. In 2016 the vaccines industry contributed 122,000 jobs (indirectly and directly). Although the EU has “traditionally” been the home of investment in innovative vaccines, manufacturers have been seeking sites in other regions, such as Asia, to meet global demand.
What factors affect decision-making? According to the report, the pandemic has influenced these. Before the pandemic, there was “concern” that the EU vaccines industry was facing “several challenges”. Although the pandemic emphasised the value of the innovative vaccine industry, the debate regarding attractiveness and competitiveness has focused on pharmaceuticals with “little specific consideration” of vaccines. Thus, with the “specificities and complexities” of the vaccine industry, the report highlights a need for analysis of “what would make the EU region more attractive”.
“Only by understanding the challenges facing the vaccines industry in the EU is it possible to develop the priorities needed to secure the region as a worldwide leader in vaccine innovation and ensure a sustainable ecosystem.”
The review at a glance
The report considers the differences in the policy environment for therapeutic vaccines compared with prophylactic vaccines. As a review of Vaccine Europe members found that of 100 candidates in the pipeline in July 2022, 92 were prophylactic, the report focuses on prophylactic vaccines across “classical and next-generation technology platforms”. The research approach demanded three key steps:
- A literature review identified the key drivers affecting investment and recent trends and policy challenges affecting the EU vaccines industry.
- Quantitative evidence was collected on factors affecting investment decisions to see how the environment is changing.
- An interview programme involving 11 VE members validated the investment drivers and challenges for vaccines and demonstrated the impact of the policy environment on investment decisions and revealed policy questions to improve attractiveness.
The report connects the factors that drive investment with the policies that increase attractiveness. In the table below we summarise the key investment drivers across each phase of the value chain.
When considering market attractiveness in the EU, the report acknowledges that EU Member States are responsible for organising and delivering health services and care. Thus, the EU’s role in health policy is “complementary to national policies”. It aims to:
- Protect and improve the health of EU citizens
- Support the modernisation of health infrastructure
- Improve the efficiency of the EU’s health systems
- Strengthen preparedness and response measures to cross-border health threats
Each phase of the value chain is reviewed to identify the policy challenges and implications for attractiveness.
Many of the world’s largest vaccine companies have established research facilities within the region due to the persistence of “several key investment drivers” across certain countries. The COVID-19 pandemic revealed the research strength of the EU vaccines industry, when nearly half (47%) of patent applications for COVID-19 vaccines came from European companies.
However, due to challenges to early-stage research, some companies are directing research investments in other regions. The report identifies this as of particular concern regarding the development of small and medium-sized enterprises (SMEs) investing in vaccine research. A key challenge that the industry faces is the difficulty early-stage actors encounter when trying to raise capital due to “limited exit opportunities”.
“Vaccine development is highly complex and requires significant investments of both time and capital. These factors can create concerns about the return on investment, which in turn, can make it difficult to raise funding for vaccine research, particularly for SMEs that are heavily reliant on external funding.”
The lack of exit opportunities reduces the availability of funding and creates a “barrier to innovation”, thus “hindering the development of new vaccines”. Another challenge identified is the “lack of sufficient incentivise to diversify vaccine technology platforms”. The “limited support” at EU and national levels discourages researchers from investing in new technologies and “risks preventing future innovation”.
Furthermore, there are “significant barriers” to gaining EU-level funding. This creates an extra challenge before companies can secure investment. Finally, a shortage of skilled workers is highlighted. The complex and technical nature of vaccine research demands workers with “specialised skills and knowledge”.
“The absence of skilled workers reduces the attractiveness of the EU as a region for vaccine research and forces companies to consider other regions for investment.”
The EU has “traditionally” been a significant region for vaccine development; approximately 22% of global vaccine clinical trials have taken place in the EU over the last 20 years. This could be thanks to the “relatively advanced clinical trial infrastructure” in many EU countries, which offers a “solid foundation” for vaccine development. However, there are key issues associated with clinical development that are affecting the EU vaccines industry.
A main challenge is that clinical trial requirements can be “extensive”. Although the report recognises that some requirements are “necessary to appropriately demonstrate the safety and efficacy of vaccines”, they can become “increasingly burdensome”. This prolongs the development process and delays access.
“It is vital that processes are streamline and efficient to deliver innovation quickly.”
Although the literature review found little supporting evidence for the notion that the speed of clinical trial timelines is “relatively slow” in the EU, it was “frequently reported” during the interview stage. Another stated issue is the “significant disparity” in clinical trial approval timelines across Member States. A recent analysis revealed that approval and establishment of a study could be 100 days quicker in the US than in some EU countries. Thus, developers may prioritise other EU countries or look outside the EU.
A final challenge is the lack of real-world evidence (RWE) infrastructure to support development in the EU. RWE plays a “key role” in providing data on existing vaccines’ safety and efficacy, which can be used to optimise the development of innovative vaccines. It can also provide context on uptake and use, supporting developers to make informed decisions.
Once again, the report highlights the role played by the EU in the COVID-19 pandemic response. However, the attractiveness of the industry is hampered by “key manufacturing challenges”. For a start, there is “limited funding support and effective engagement with public institutions”. There are also “minimal incentives” for expanding vaccine manufacturing infrastructure. These challenges prevent companies from improving or expanding their manufacturing capabilities.
Another challenge is that manufacturing quality control processes and requirements are “suboptimal and lack harmonisation”. Variations and complexities cause delays and/or shortages, as well as increased production costs and inefficiencies. Furthermore, many national manufacturing infrastructures are “suboptimal”, and there are significant disparities between Member States. This indicates that the “EU ecosystem is not well-placed to support manufacturing”.
The report suggests that the access environment is a Member State competency but that the EU can play a “supporting role” in improving uptake and equity.
“Currently, the EU market access environment for vaccines is fragmented.”
Central to this is the delay from national vaccine committees in making recommendations; this contributes to “significant disparities in reimbursement timelines”. Evidence suggests that in 30% of EU countries it can take over 6 years for a new vaccine to be reimbursed.
“Immunisation programmes are slow and lack dynamicity to adopt innovative vaccines, resulting in considerable delays to population access.”
Another challenge is associated with budgeting and “highly punitive” tendering practices. From the statistic that 77% of Member States spend less than 0.5% of their healthcare budget on immunisation it is clear that vaccines are given “relatively low prioritisation”. Funding challenges create uncertainty, which disincentivises future research.
Vaccine hesitancy is still causing issues, with some countries, like Poland, having “notably higher hesitancy levels than global averages”. This negatively affects vaccine uptake and disincentivises development. Finally, there are “considerable disparities in vaccine monitoring infrastructure” across Member States.
Summary and recommendations
The thematic challenges that affect the health and attractiveness of the EU ecosystem are laid out in figure from the report below.
Based on these findings, the report presents policy priorities that align with each cross-cutting challenge.
Do you agree with the findings and recommendations presented in the report? How might your region fare when examined? For more on supporting innovation and encouraging research, join us in Barcelona for the World Vaccine Congress next month. Don’t forget to subscribe to our weekly newsletter.