Merck forced to borrow half of CDC stockpiles of Gardasil to meet demand

By Ben Hargreaves contact

- Last updated on GMT

(Image: Getty/Tumsasedgars)
(Image: Getty/Tumsasedgars)

Related tags: Vaccines, Merck, CDC, Gardasil, Keytruda

Merck announces that it has reallocated Gardasil from the US CDC stockpiles, as a surge in demand sees revenues from the vaccine rise 26% year-on-year.

The move was revealed by Merck, known as MSD outside of North America and Mexico, in third quarter financials​. The company stated that it had borrowed doses of Gardasil 9 (human papillomavirus 9-valent (HPV) vaccine, recombinant) from the US Centre for Disease Control and Prevention (CDC).

Merck’s action was driven by higher demand in Asia Pacific, particularly China, and in Europe, where increase vaccination rates drove higher uptake of the vaccine. In the US, the company noted that it had also seen increased purchase of the vaccine, which, alongside higher pricing, led to improved sales.

In the third quarter, the Gardasil/Gardasil 9 products were the company’s second largest seller, only behind Keytruda (pembrolizumab), after generating revenue of $1.32bn (€1.19bn). This represents an increase in revenue of 26% on 2018 results.

Merck has ploughed some of this revenue back into increasing production rates for its HPV vaccines, with the announcement in July that it would invest $650m in expanding production capacity​ at its North Carolina, US, site.

Such improvements are not ready to meet the immediate additional demand the company faces and it therefore chose to borrow half of the stockpile doses held by the US CDC to meet demand in the US and free up capacity to manufacture doses for the other parts of the world, a spokesperson told us.

As a result, the company will see a reduction in sales of approximately $120m in the fourth quarter.

The spokesperson explained that 2018 marked an ‘inflection point’, after a five-year period of stable demand, adding that “this increase, combined with the inherent manufacturing complexity and long lead times, limit our ability to increase supply as rapidly as we would like.”

Long-term production plans

Moving into the future, the company is working with contract manufacturers to help alleviate the shortfall in some areas of production, as well expanding and maximizing existing facilitates. Such actions have doubled the company’s capacity for the vaccines, the spokesperson said.

Further than this, the company is constructing two new bulk manufacturing plants that are expected to be operational in 2023.

Regarding returning to the CDC to borrow additional doses, the spokesperson did not rule out the possibility and suggested that it would need to determine when “the appropriate time would be to replenish the stockpile.”

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