Report on the United States Vaccine Industry

Exhibit 19

U.S. Vaccine Revenue Growth Factors
- Gross Drivers -

Difference Comments
1989 1993 '89 vs '93 % of Total
Traditional Products $180 M 155 (25) (3%) Pricing/
* OPV/DTP substitution
Expanded Product 120 --210 90 11% ACIP 2nd dose
* MMR recommendation
New Products 117 730 613 72% New products
* Hep B, Hib, DTPHib, DTaP
Other/International 126 301 175 20% Exports of MMR
and new products/
flu/pneumococcal
Total $543 M $1,396 M $853 M 100%

Vaccine Pricing - Consumer Perspective
New products and additions to the vaccine schedule have significantly raised the total
immunization cost per child. Exhibit 20 shows the full immunization schedule cost in the
private market by year over the past decade, as a function of price increases, additions to the
schedule, and excise tax. While the overall increase has been significant, more than half of the
growth between 1982 and 1993 is from changes to the schedule, another 30 percent from price
increases, and 15 percent from excise tax.
At the same time, these additions to the schedule have provided valuable health benefits to the
public. Vaccines are among the most affordable and effective health interventions available
today and have historically generated savings in overall health care and related expenses many
times greater than the costs of immunization. Vaccine campaigns have been successful in
eradicating smallpox from the world and in eliminating indigenous polio from the Americas.
More recently, public estimates have suggested that consumers save approximately $380
million a year in healthcare costs from the Hib vaccination alone, roughly $95 per person.

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