Report on the United States Vaccine Industry

Vaccine Pricing Conclusions Average childhood vaccine prices grew significantly in the 1980s, but have been flat and, in many cases, have been declining in the 1990s. The primary drivers of this decline are the intense competition in many new vaccine markets, some pricing restraint by suppliers of traditional monopoly products, and commodity pricing on DTP. Increases in government purchases at significantly discounted prices and the emergence and growth of large private market HMO buyers with substantial purchasing power have also contributed to downward pressure on prices. Drawing broader conclusions from price data, however, is difficult because the trends are dependent on the time periods chosen. For instance, taking a 20-year perspective, instead of the 10- or 5-year periods discussed in this report, would likely generate different results. Because Merck took a voluntary price cut on MMR in the early 1970s, the compound annual growth rate in price from its introduction 20 years ago to the present is lower than inflation over that period. And because the price of DTP was very low for the period of the 1970s and into the 1980s, its growth rate in price from the early 1970s to the present is much lower than during the last decade. One possible conclusion is that these pricing trends have been associated with a consolidation of the market. Exhibit 17 tracks the number of licensees and actual marketers of MMR, OPV, and DTP at various points in time over the last 20 years. MMR and OPV have clear monopoly positions, so it is not surprising that these are the only two products that have been able to generate some price gains over the last five years. At the same time, in 1975 and 1982 there were many more suppliers of vaccines in the U.S. than there are today. It is likely that the prices during those periods were simply too low to support the level of competition typical of the 1970s, or to support the R&D investment necessary to remain viable. Exhibit 17 U.S. Basic Pediatric Vaccines Competitive Environment 1975 1982 1985 1992 1994 MMR Components * # of licensees 6 2 2 2 2 * # of marketers 6 1 1 1 1 * Market leader Merck Merck Merck Merck Merck MMR Components * # of licensees 2 1 1 1 1 * # of marketers 2 1 1 1 1 * Market leader Lederie Lederle Lederle Lederle Lederle MMR Components * # of licensees 7 5 4 4 3 * # of marketers 7 5 4 2 3 * Market leader Lederte/ Lederte/ Lederle/ Lederle/ Connaught Merrell Connaught Connaught Connaught Mercer Management Consulting Page 20

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Title
Report on the United States Vaccine Industry
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Mercer Management Consulting
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Page 20
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Mercer Management Consulting
1995-06-14
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"Report on the United States Vaccine Industry." In the digital collection Jon Cohen AIDS Research Collection. https://name.umdl.umich.edu/5571095.0504.060. University of Michigan Library Digital Collections. Accessed June 11, 2025.
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