Abstract
We explored market factors that affect pediatric combination vaccine uptake in the US public-sector pediatric vaccine market. We specifically examined how Pediarix and Pentacel earned a place in the 2009–2012 lowest overall cost formulary.
Direct competition between Pediarix and Pentacel is driven by the indirect presence of the Merck Haemophilus influenzae type b vaccine and the Recommended Childhood Immunization Schedule requirement for a hepatitis B birth dose.
The resulting analysis suggests that Pentacel would never have earned a place in the lowest overall cost formulary for 2009–2012 federal contract prices for any cost of an injection unless the Merck H influenzae type b advantage was ignored and the hepatitis B birth dose administration cost was recognized by health care providers in designing the lowest overall cost formularies.
A limited number of pharmaceutical companies manufacture vaccines for the US pediatric vaccine market. Over the past decade, numerous economic and regulatory factors have made vaccine manufacturing less profitable for such companies, resulting in many of them exiting the market.1 One consequence of this situation is that production problems often translate into vaccine shortages in the market. Because maintaining high immunization levels is a vital societal need, public health administrators are motivated to sustain an adequate supply of vaccines through public health policies that encourage new companies to enter the market.1
The Centers for Disease Control and Prevention (CDC) in the United States is the primary public health organization responsible for developing and applying disease prevention and control. The Advisory Committee on Immunization Practices (ACIP) is an independent panel of vaccine stakeholder representatives from the CDC, vaccine manufacturers, scientists, and physician groups. The ACIP reviews technical data on new vaccines, and then makes recommendations after the vaccines are approved by the Food and Drug Administration (FDA) for sale in the United States. The ACIP is also responsible for adding the vaccines to the Recommended Childhood Immunization Schedule (RCIS; Figure 12). The RCIS represents the recommended sequence and timing of pediatric vaccines to protect children from pediatric diseases.
FIGURE 1—
United States 2012 Recommended Childhood Immunization Schedule for birth through age 6 years.
Note. DTaP = diphtheria, tetanus, and pertussis; HepA = hepatitis A; HepB = hepatitis B; Hib = Haemophilus influenzae type b; IPV = inactivated poliovirus; MMR = measles, mumps, and rubella; PCV = pneumococcal conjugate vaccine; RV = rotavirus.
Source. Centers for Disease Control and Prevention.
The CDC is required by law to negotiate vaccine prices for the purchases made by state and local governments. The state and local government public health officials purchase vaccines for the immunization of the children in their administrative areas of responsibility. They seek to satisfy the RCIS for each child to ensure proper immunization coverage. They distribute the vaccines free of charge to the private physicians and public health clinics that are registered as Vaccines for Children (VFC) Program providers.3 The VFC Program is designed to provide vaccines (at no charge) to children whose parents or guardians are not able to afford them. Pediatric vaccines purchased at the federal contract prices, as negotiated by CDC, account for approximately 57% of total pediatric purchases by volume.3 Private vaccine providers who are not registered as VFC Program providers cannot purchase the vaccines through federal contract prices, and as such, purchase the vaccines at private-sector prices (typically higher than the federal contract prices). The private-sector prices are reported by vaccine manufacturers to the CDC.4 In this analysis, we focused on federal contract prices, though the methodology employed could be adapted to separately analyze the private sector.
Vaccines are said to compete when 2 or more vaccine manufacturers produce the same vaccine or vaccines that contain the same antigen that can be administered to satisfy the immunization requirements in a given time period. There are 4 competitive antigens: diphtheria, tetanus, and pertussis (DTaP); hepatitis B (HepB); Haemophilus influenzae type b (Hib); and inactivated poliovirus (IPV). In the United States, 3 pharmaceutical companies (Merck, GlaxoSmithKline, and Sanofi Pasteur) manufacture all the competing vaccines.
Pediarix (DTaP–HepB–IPV) was the first pentavalent combination vaccine to gain FDA approval (in 2002). In 2008, a second pentavalent combination vaccine, Pentacel (DTaP–IPV/Hib), gained FDA approval for the US market. As Pediarix and Pentacel are the only vaccines that immunize against 5 diseases in a single injection, health care providers welcome them as part of the formulary (defined as a set of pediatric vaccines stocked to satisfy the immunization needs for a pediatric population cohort, as defined by a given set of immunization requirements). On the basis of the RCIS structure, Pediarix and Pentacel are not compatible for use in a single vaccine formulary. By design, the market will gravitate toward the combination vaccine that provides the best value (i.e., yields the lowest overall cost formulary [LOCF], the set of vaccines that satisfies the RCIS at the lowest overall formulary cost5). Therefore, Pediarix and Pentacel are said to serve as the backbone of the LOCF. From the perspective of health care providers, the question to ask is: which pentavalent vaccine earns a place in the LOCF, given a fixed cost of an injection (defined as a constant vaccine administration cost)?
Behzad et al.6 reported and discussed the LOCFs across 3 years (2009–2011) for several fixed cost of an injection values. From Behzad et al.,6 Pentacel was not competitively priced compared with Pediarix in 2009–2011 (i.e., Pentacel did not earn a place in the LOCF for any cost of an injection). According to data provided by the CDC7,8 (e-mail communication from Sarah Foster, Centers for Disease Control and Prevention, August 14, 2013), the net number of Pentacel doses distributed in 2009–2011 was greater than the number of Pediarix doses distributed. A natural question to ask is why the uptake by health care providers who administer Pediarix or Pentacel as the backbone of their pediatric formularies is not consistent with the results reported in Behzad et al.6
This study answers this question by considering the effects of 2 issues: a special property of the Merck Hib (i.e., a month-6 dose of Hib is not required if Merck Hib is administered in months 2 and 4) and the HepB birth dose. Moreover, this study identifies the equilibrium cost of an injection (defined as the minimum cost of an injection for which Pentacel earns a place in the LOCF) for the 4 possible scenarios associated with recognizing or ignoring these 2 issues by health care providers in designing the LOCF. No attempt has been made before to characterize the effects of the special property of the Merck Hib and HepB birth dose on the uptake of Pediarix and Pentacel. Understanding the market factors that have an impact on the uptake of pediatric combination vaccines could interest those within the pediatric health care community, such as pharmaceutical companies seeking right pricing strategies for their products, as well as the CDC negotiating vaccine prices with manufacturers and government, and public health officials seeking the LOCF for the children in their administrative area.
METHODS
The methodology used in this study was based on the vaccine selection algorithm reported in Jacobson et al.9 and Weniger et al.,10 which solves for the LOCF that satisfies the RCIS by using an integer programming algorithm. The costs that are minimized include the purchase price of individual vaccines, the vaccine preparation cost, and the cost of an injection. The purchase prices of individual vaccines (federal contract prices) are available via the CDC.11–14 Vaccine preparation costs for vials and syringes are $0.75 and $0.25 per dose, respectively (see Jacobson et al.9 and Weniger et al.10).
The cost of an injection is a subjective value.5 It is typically a function of the economic environment of the pediatric patient population served by a health care provider. Many studies treat the cost of an injection as a constant. However, treating it as an uncertain value with a probabilistic distribution is reasonable. In Behzad et al.,6 3 discrete values ($6, $10, and $14) were considered for the cost of an injection. These values were based on the probability distribution used for the cost of an injection in Robbins et al.5
The 4 antigens or antigen sets of interest in this study are DTaP, HepB, Hib, and IPV and the 6 time periods of interest are birth month, month 2, month 4, month 6, months 12–18, and years 4–6. We made the following assumptions in this study: (1) DTaP manufacturer brand matching is enforced for all the months (i.e., each of the doses of DTaP for the pertinent time periods must be of the same brand)15; (2) Pediarix and Pentacel are only permitted in months 2, 4, and 6; and (3) the same antigens manufactured by different companies are biologically interchangeable, with the exception of DTaP matching, as noted previously.
According to the RCIS2 and the dosage guidelines, a month-6 dose of Hib is not required if Merck Hib is administered in months 2 and 4. This feature is referred to as the Merck Hib advantage (MHibA). When the LOCF is determined, it takes this dose reduction into account and reduces the economic value of any vaccine that includes a third Hib antigen administered in month 6. Therefore, when the MHibA is recognized (by the state and local government public health officials when designing the LOCF), the economic value of Pentacel is reduced, as the additional Hib antigen administered in Pentacel has no economic value when 3 doses are administered. This devalues Pentacel relative to Pediarix. As Pediarix can satisfy the required doses of DTaP, HepB, and IPV in months 2, 4, and 6, then if the MHibA is recognized in designing the LOCF, Pentacel faces an economic obstacle to earn a place in the LOCF (at its federal contract price). The question is, what if the MHibA is ignored by health care providers? Can Pentacel then earn a place in the LOCF at its federal contract price, and, if yes, what is the resulting equilibrium cost of an injection at which this occurs?
According to the RCIS,2 a monovalent HepB birth dose is administered to all newborns before hospital discharge. If health care providers do not include the cost of this HepB birth dose when determining the LOCF and administer 3 doses of HepB in months 2, 4, and 6, HepB extraimmunization occurs. This RCIS recommendation will be referred to as the HepB birth dose administration cost (HepBBDAC). When the LOCF is determined, it takes this extraimmunization into account and reduces the economic value of any combination vaccine that includes an extra HepB antigen when administered. Therefore, when the HepB birth dose is recognized (by the state and local government public health officials when designing the LOCF) as extraimmunization, the economic value of Pediarix is reduced because the additional HepB antigen administered in Pediarix has no economic value. This devalues Pediarix relative to Pentacel. One can ask, what if the HepBBDAC is recognized by health care providers? Can Pentacel then earn a place in the LOCF (at its federal contract price), and, if yes, what is the resulting equilibrium cost of an injection at which this occurs?
RESULTS
Four scenarios exist in recognizing and ignoring the MHibA and the HepBBDAC when one is designing a formulary. Scenario A captures the situation where the MHibA and the HepBBDAC are both recognized by health care providers in designing the LOCF. Scenario B captures the situation where the MHibA is ignored and the HepBBDAC is recognized by health care providers in designing the LOCF. Scenario C captures the situation where the MHibA is recognized and the HepBBDAC is ignored by health care providers in designing the LOCF. Scenario D captures the situation where the MHibA and the HepBBDAC are both ignored by health care providers in designing the LOCF. This section reports the LOCF and equilibrium cost of an injection in each of these 4 scenarios using the vaccine selection algorithm.9,10
Figure 2 indicates the 4 scenarios for federal contracts in 2009 through 2012. For each of these years, a graph representing each scenario is given, with the horizontal axes corresponding to the cost of an injection and the vertical axes corresponding to the formulary. As shown in Figure 2, in scenarios A, C, and D, Pentacel did not earn a place in the LOCF (for any cost of an injection) in 2009–2012. Scenario B is the only scenario where Pentacel earns a place in the LOCF (for some costs of an injection) in 2009–2012.
FIGURE 2—
Scenarios A through D for US federal contracts for pediatric immunizations in (a) 2009, (b) 2010, (c) 2011, and (d) 2012.
Note. HepBBDAC = Hepatitis B birth dose administration cost; MHibA = Merck Haemophilus influenza type b advantage; Merck Hib = Merck Haemophilus influenza.
In scenario A, the price of Pentacel in 2009–2012 is sufficiently high such that there are other vaccine alternatives that can satisfy the RCIS at an overall lower cost. Using the same methodology as Behzad et al.,6 Table 1 gives the maximal prices (defined as the highest price for which a vaccine earns a place in the LOCF given the federal contract prices of all the other vaccines) of Pentacel for 3 costs of an injection ($6, $10, $14) in 2009–2012. According to Figure 2, in scenario A, in 2009–2012, the LOCFs are a monovalent vaccines formulary, a formulary with Pediarix as its backbone, and the 3-shot Pediarix formulary (Table 2).
TABLE 1—
US Federal Contract Prices of Pediarix and Pentacel and Maximal Prices of Pentacel for a Fixed Cost of an Injection: 2009–2012
| Variable | 2009, $ | 2010, $ | 2011, $ | 2012, $ |
| Federal contract price | ||||
| Pentacel | 51.49 | 50.70 | 52.55 | 54.50 |
| Pediarix | 48.75 | 49.75 | 51.15 | 52.10 |
| Maximal price of Pentacel | ||||
| Cost of an injection $6 | 43.03 | 43.91 | 44.22 | 46.21 |
| Cost of an injection $10 | 45.89 | 45.09 | 46.96 | 47.12 |
| Cost of an injection $14 | 47.22 | 46.31 | 48.30 | 48.45 |
TABLE 2—
Pediarix- and Pentacel-Dominant Lowest Overall Cost Formularies: United States, 2009–2012
| Pediarix-Dominant Lowest Overall Cost Formularies |
Pentacel-Dominant Lowest Overall Cost Formularies |
|||
| Pharmaceutical Company and Time Period | 3-Shot Pediarix Formulary | 3-Shot Pediarix With no Merck Hib Formulary | 3-Shot Pentacel and TriHibit Formulary | 3-Shot Pentacel Formulary |
| Merck | ||||
| Birth | … | … | … | … |
| Month 2 | Hib | … | … | … |
| Month 4 | Hib | … | … | … |
| Month 6 | … | … | … | … |
| Months 12–18 | … | … | … | … |
| Months 48–72 | … | … | … | … |
| GlaxoSmithKline | ||||
| Birth | HepB | HepB | HepB | HepB |
| Month 2 | DTaP-HepB-IPV | DTaP-HepB-IPV | HepB | HepB |
| Month 4 | DTaP-HepB-IPV | DTaP | … | … |
| Month 6 | DTaP-HepB-IPV | DTaP-HepB-IPV | … | … |
| Months 12–18 | DTaP, Hib | DTaP, Hib | HepB | … |
| Months 48–72 | DTaP-IPV | DTaP-IPV | … | … |
| Sanofi Pasteur | ||||
| Birth | … | … | … | … |
| Month 2 | … | Hib | DTaP-IPV/Hib | DTaP-IPV/Hib |
| Month 4 | … | Hib | DTaP-IPV/Hib | DTaP-IPV/Hib |
| Month 6 | … | Hib | DTaP-IPV/Hib | DTaP-IPV/Hib |
| Months 12–18 | … | … | DTaP/Hib | DTaP |
| Months 48–72 | … | … | DTaP, IPV | DTaP, IPV |
Note. DTaP = diphtheria, tetanus, and pertussis; HepB = hepatitis B; Hib = Haemophilus influenzae type b; IPV = inactivated poliovirus.
In scenario B, because the MHibA is ignored, 4 doses of Hib are required to satisfy the RCIS, even if the Merck Hib vaccine earns a place in the LOCF. In 2009, for any cost of an injection less than $12.43, Pentacel did not earn a place in the LOCF. For any cost of an injection greater than or equal to $12.43, Pentacel would have earned a place in the LOCF, which is the 3-shot Pentacel and TriHIBit Formulary (Table 2; TriHIBit is the registered trademark of DTaP–Hib produced by Sanofi Pasteur). This means that $12.43 was the equilibrium cost of an injection in 2009. As shown in Figure 2, the equilibrium costs of an injection in 2010–2012 are $11.48, $11.14, and $13.87, respectively. The LOCFs are Pentacel-dominant (Table 2).
In scenario C, 3 doses of Merck Hib are sufficient to satisfy the RCIS Hib requirements over the month-2, month-4, and months–12 to 18 immunization time periods, and the HepB birth dose results in HepB extraimmunization if vaccines containing the HepB antigen are administered in the month-2, month-4, and month-6 time periods. In scenario C, in 2009–2012, for certain costs of an injection (Figure 2), the backbone of the LOCF was Pediarix. In this scenario, in 2009–2011, the LOCF, for certain costs of an injection, was the 3-shot Pediarix formulary (Table 2), which includes HepB extraimmunization. In 2012, for certain costs of an injection, the LOCF was similar to the 3-shot Pediarix formulary, with the Sanofi Pasteur Hib monovalent replacing the GlaxoSmithKline Hib monovalent in months 12 to 18 (as GlaxoSmithKline Hib monovalent was not under federal contract in 2012).
In scenario D, in 2009–2012, for certain costs of an injection (Figure 2), the backbone of the LOCF was Pediarix. In this scenario, in 2009–2011, the LOCF, for certain costs of an injection, was the 3-shot Pediarix formulary with no Merck Hib (Table 2), which includes HepB extraimmunization. In 2012, for certain costs of an injection, the LOCF was similar to the 3-shot Pediarix with no Merck Hib and with the Sanofi Pasteur Hib monovalent replacing the GlaxoSmithKline Hib monovalent in months 12 through 18 (as GlaxoSmithKline Hib monovalent was not under federal contract in 2012).
DISCUSSION
The results reported suggest that Pentacel would never have earned a place in the LOCF with 2009–2012 federal contract prices unless the MHibA was ignored and the HepBBDAC was recognized by health care providers. According to the Biologics Surveillance Summary for 2009 2010, and 2011 provided by the CDC on the number of vaccine doses distributed during these periods7,8 (e-mail communication with Sarah Foster, Centers for Disease Control and Prevention, August 14, 2013), the net number (defined as the total number of vaccines distributed minus any return) of Pentacel doses distributed during 2009, 2010, and 2011 was 5 724 422, 5 112 421, and 9 604 245, respectively. The net number of Pediarix doses distributed during 2009, 2010, and 2011 was 1 739 259, 1 829 648, and 3 444 210, respectively. The net number of Pentacel doses distributed each year was more than the net number of Pediarix doses distributed.
These numbers suggest that health care providers were ignoring the MHibA and recognizing the HepBBDAC when designing LOCF (scenario B in Figure 2). If the MHibA was recognized by health care providers, then Pentacel would not have been competitively priced compared with Pediarix and, hence, it would not have earned a place in the LOCF in 2009–2011. In the future, if the sale of Pediarix and Pentacel remains consistent with the trend observed in 2009–2011, the same conclusions would be drawn. On the other hand, if this trend reverses and the number of doses distributed for Pediarix increases while the number of doses of Pentacel decreases, then other factors may be creating such a shift in uptake.
Because of a manufacturing delay, a Pentacel shortage occurred in April 2012.16 Therefore, according to the Biologics Surveillance Summary for 2012 (e-mail communication with Sarah Foster, Centers for Disease Control and Prevention, August 14, 2013), the net number of Pentacel doses distributed during 2012 was 5 470 805 and the net number of Pediarix doses distributed during 2012 was 5 017 570. Although the sales numbers of Pentacel were still higher than those for Pediarix, the noted shortage likely had an impact on these values because their difference is considerably smaller.
One possible explanation for health care providers ignoring the MHibA was that the FDA approval of Pentacel in 2008 coincided with a Hib shortage during that time period. In particular, the manufacture of Merck Hib and Hib–HepB was discontinued in 2007 because of sterility problems with these vaccines.17 The resulting Hib vaccine shortage lasted until 2009.18,19 The Merck Hib shortage was a likely reason for the higher number of Pentacel doses sold in 2009 compared with the number of Pediarix doses sold, and the market inertia associated with staying with Pentacel rather than switching back to Pediarix after production resumed. The 2010 federal contract price for Pentacel was $0.79 lower than its price in 2009, which suggests that Sanofi Pasteur was proactively preparing for such a switch, which did not fully materialize. All these points provide plausible explanations for why the MHibA was ignored, even though it offered dosage reduction advantages. Clearly, MHibA and HepBBDAC are likely not the only factors influencing the US pediatric vaccine market. Although there are other factors that had an impact on the sale of Pediarix and Pentacel, this analysis aims at providing a possible explanation for the higher sale of Pentacel compared with Pediarix.
Interpreting the results of this study from the perspective of manufacturers, Sanofi Pasteur has priced Pentacel as if health care providers are ignoring the MHibA and recognizing the HepBBDAC. Under scenario B, for federal contract prices in 2009–2012, for Pentacel to have earned a place in the LOCF, the equilibrium cost of an injection should have been between $11 and $14. This may suggest that Sanofi Pasteur has calibrated the average cost of an injection to be in this range, corresponding to the equilibrium cost of an injection. By pricing Pentacel as it did in 2009 and 2010, it generated US $10.8 million and US $7.1 million in additional revenue, respectively, as a result of health care providers residing in scenario B.
Limitations
There are several modeling limitations in this study. The only measure used for comparison between 2 formularies was cost. Other factors that could influence whether health care providers choose to use a vaccine include vaccine formulary inertia (i.e., where a specific formulary remains a health care provider’s choice because of resistance to change), vaccine brand loyalty, and volume discounting, all of which are difficult to quantify because of lack of data and, hence, are not included in the model. Specifically, as a result of the confidential and proprietary nature of information regarding the production capacity of vaccines, the exact value of the production capacity of vaccine manufacturers is unavailable. Hence, factors such as volume discounting cannot be incorporated into the model.
There are several fruitful directions for future research. Simultaneous analysis of public and private sectors of the vaccine market is crucial, as a link does exist between these 2 sectors for health care providers who purchase vaccines in both sectors. Studying other market factors that have an impact on the sale of Pediarix and Pentacel is certainly a broad direction of future research as this study only aims at providing 2 possible market factors resulting in higher sale of Pentacel compared with Pediarix. One possible market factor is the competition between Menactra (meningococcal conjugate, groups A, C, Y, and W-135) produced by Sanofi Pasteur and MENHIBRIX (meningococcal, groups C and Y, and Haemophilus b–tetanus toxoid conjugate vaccine) produced by GlaxoSmithKline. The initial United States approval of MENHIBRIX was in 2012 and, therefore, the required price information of this vaccine is not available yet. Once such information becomes available, the competition between Pediarix and MENHIBRIX, both produced by GlaxoSmithKline, and Pentacel and Menactra, both produced by Sanofi Pasteur, can be studied.
Conclusions
We analyzed the US pediatric combination vaccine market and provided scenarios under which certain combination vaccines earn a place in the LOCF. We placed the main focus on examining how Pediarix or Pentacel would earn a place in the LOCF for a fixed cost of an injection, under federal contract prices in 2009–2012. We examined this by considering the MHibA and HepBBDAC. We provided LOCFs and the equilibrium cost of an injection for 4 possible scenarios associated with recognizing or ignoring these 2 issues. In each scenario, we discussed whether Pediarix or Pentacel is the backbone of the LOCF. We used these discussions to provide explanations for how Pediarix and Pentacel affect the US pediatric vaccine market.
The results of this study suggest that Pentacel would never have earned a place in the LOCF under federal contract prices in 2009–2012 unless the MHibA was ignored and the HepBBDAC was recognized by health care providers in designing the LOCF. According to the Biologics Surveillance Summary for 2009–2012, the number of Pentacel doses distributed during these periods was greater than the number of Pediarix doses distributed, which suggests that Pentacel was the preferred backbone of the LOCF in 2009–2012.
Acknowledgments
This research has been supported in part by the National Science Foundation (CMMI-1161458). The second author was also supported in part by the Air Force Office of Scientific Research (FA9550-10-1-0387). This material is based upon work supported in part by the National Science Foundation (while S.H.J. served there).
The authors would like to thank Lance E. Rodewald, MD, director, Immunization Services Division, National Center for Immunization and Respiratory Diseases, Centers for Disease Control and Prevention, for his longstanding encouragement and feedback on this line of research, as well as access to data used in this study.
Note. Any opinion, findings, and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the US Air Force, Department of Defense, National Science Foundation, or the US government.
Human Participant Protection
No human participants were involved in this study and, hence, no institutional review board approval was needed.
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