“When we talk about low cost of goods in vaccines, it’s a completely different order of magnitude as compared to therapeutic products,” Rahul Singhvi, chief operating officer of Takeda, told an audience in Boston this week. Keeping down the cost of goods of vaccines – and therefore finished product pricing – is a subject “close to my heart,” he said:
“The reason we have responsibility as manufacturers to have a low-cost product is to allow equitable access to products as much as practicable. […] The lowest common denominator in that is cost of goods - if we can manage to have a low cost of goods we can have tiered pricing and deliver to everybody.”
Technology is answer to costs
Singhvi said lowering vaccines’ COG while maintaining quality and regulatory expectations is best achieved with technical innovation.
“We think the answer is technology. Other companies have gone to geographies with low income and labour costs. Those experiments have largely failed because there have been other costs they didn’t think of, like repeating the process because of quality problems.”
Vaccine makers have not moved fast enough to force down cost of goods, he said; “there is a little bit of catch-up right now – we must leapfrog to get to where biopharma is and beyond […] and then beyond to achieve our [desired] cost of goods. We are on the path, and the level of innovation is very high, so maybe in a year’s time [aybe the large-molecule therapeutics industry] could learn from us.”
Non-vaccines: rising costs
Meanwhile, for therapeutic proteins, “the drivers are probably going the other way,” believes Victor Vinci, chief scientific officer of CDMO Cook Pharmica, who said several industry trends are combining to drive up manufacturing bills.
“Most” companies are trying to add complicated delivery devices to their biologics – such as bolus injectors, a complex type of autoinjector. Looming serialisation deadlines will also add mandatory costs, he said.
“We hope the vaccines industry will be able to drive costs down. For biologic therapeutics it will be a more difficult path to reduce costs.”
What kinds of tech innovation will keep costs down?
KV Subramaniam, CEO of Reliance Life Sciences, also speaking at BPI, said capital costs can be reduced via flexible manufacturing of multiple products on different scales.
This is where single use comes in; it’s “an obvious solution” for the low-volume vaccine industry, said Takeda’s Singhvi, and allows production of different lines in the same facility. “Even with single use, the cost of goods can be very reasonable.”
Subramaniam added that bringing down media costs is another growing way for large molecule manufacturers trying to lower their outgoings. The industry in future will be forced to look “aggressively” at developing common platforms for media: “Public policies are demanding much lower prices.”