Is Africa a Bigger 'Vaccine Market' Than the United States?
Make Africa Healthy Again
A Modern Strategy Leapforgs
The Wall Street Journal, in Trump Administration is Weighing Major Cuts to Funding for Domestic HIV Prevention, frames the problem with product-market fit, when ‘the market’ — the foundational model for strategy — gets swept away by a new form of chaos, one that threatens on an almost daily basis to mushroom beyond anything we can say, think or plan out normally in some sort of atavistic sanctuary:
"The cuts [in HIV prevention] could affect drugmakers like Gilead Sciences and ViiV Healthcare, which sell HIV/AIDS medicines. Gilead stock dropped nearly 3% in after-hours trading, following The Wall Street Journal's report on the administration discussions.
Gilead has asked the FDA to approve the company's next-generation prevention treatment, called lenacapavir, which patients could take twice a year. Morgan Stanley estimates the drug's sales could surpass $6 billion a year by 2030, with most of the revenue from commercial health insurers [in the United States]."
Gilead won approval last week for Yeztugo, but I wouldn’t bet on it “ending the HIV epidemic once and for all” (something Gilead’s chairman and CEO, Daniel O’Day, suggested in a statement), especially if that hope is based on its technical potential, much less sales surpassing $6 billion a year in the United States.
And for sales from the rest of the world?
“A breakthrough preventative drug, lenacapavir, a twice-yearly injection that offers total protection from HIV, was to be rapidly rolled out across eastern and southern Africa. The main target: young women. About 300,000 of them were newly infected with the virus last year — half of all new infections worldwide. But every one of these plans has been derailed by the Trump administration’s slashing of foreign assistance,” writes Stephanie Nolan in her piece yesterday for the New York Times (Promise of Victory Over H.I.V. Fades as US Withdraws Support).
To the big forecast miss ahead in the market for drugs to prevent HIV, I would add we’re about to see an epidemic of commercial withering across the board for any business whose revenue depends on successfully rotating in an orbit where the word “vaccine” is the center-of-gravity of thought, investment and commercialization, especially if that center-of-gravity is premised on the potential of the United States as a drug market. RFK Jr. is intentionally, methodically dismantling an entire industry ecosystem, in real time. Wrote The Economist yesterday (RFK’s loopy approach to vaccines endangers Americans):
When it comes to vaccines, President Donald Trump’s instincts have sometimes been sound. In May 2020 he launched Operation Warp Speed, which came up with inoculations for covid-19, based on a new mrna technology, at an unprecedented pace and scale. By one estimate, covid vaccines averted 18.5m hospitalisations and 3.2m deaths in America in two years. And Mr Trump wisely got himself jabbed. So why is he now letting his health secretary, Robert F. Kennedy junior, dismantle the country’s vaccine-making ecosystem?
Mr Kennedy is what is known politely as a “vaccine sceptic” and impolitely as a crank. He is undermining trust in, sensible scrutiny of and incentives to invest in one of modern medicine’s greatest wonders.
Time and again he casts spurious doubt on the safety of vaccines. His department has hired a conspiracy theorist to investigate a long-debunked link between vaccines and autism. He warns against the human papillomavirus (hpv) vaccine, which is estimated to have reduced American cervical-cancer deaths by 62% in the past decade. (As a lawyer, he was involved in a lawsuit against the vaccine-maker, Merck; he promised that any profits from it would go to his son, but that hardly erased the conflict of interest.) He has scrapped the recommendation that expectant mothers should be vaccinated against covid, as 120 other countries advise. He called the measles jab a “personal” choice, and urged giving children vitamin A. Several have been hospitalised for liver damage from vitamin A overdoses, and measles is resurgent in America, along with whooping cough, another vaccine-preventable disease. At least eight people have died this year.
Mr Kennedy’s efforts to warp scrutiny of vaccines are equally troubling. This month he fired all 17 members of a committee that determines which vaccines are recommended (and thus funded). A new eight-member committee has less expertise and more doubts; it includes two former paid witnesses in legal cases against vaccine-makers. Mr Kennedy insists this will ensure Americans receive safer vaccines. More probably, they will receive fewer.
As if all this were not bad enough, he is cutting funding. One step is to cancel federal contracts to develop vaccines for bird flu and hiv. Another is to refuse to support global efforts to roll out vaccines in poor countries — which benefits Americans by limiting the spread of infectious diseases. Alarmingly, he also has some power over a federal scheme that shields vaccine-makers from litigation.
The adjusted guidance ahead won’t just be in the expected demand for flu (human or bird) or Covid vaccines, but cancer, HPV, shingles, RSV, malaria, tuberculosis…..all of it, the entire unfolding and infinitely-expanding galaxy of hope and belief in the humanity-saving potential of AI-enabled drug development and scientific achievement to prevent the spread of disease, is now lost in space somewhere. Or it’s stuck in low-Earth orbit. Or it’s just failing to launch altogether.
For the Poster Children of the Problem:
Moderna losing 93 percent of its market value since its peak in 2021. It doesn’t help the Moderna rebuild that its $590 million contract to develop a bird flu vaccine is getting reevaluated by HHS, its leader saying last month that the better approach for tackling the bird flu bedeviling U.S. poultry farms is to let the virus rip. Instead of culling birds when the infection is discovered, farmers “should consider maybe the possibility of letting it run through the flock so that we can identify the birds, and preserve the birds, that are immune to it,” Kennedy said recently on Fox News. Over at the NIH, the new management team is advising people to remove all references to mRNA vaccine technology from their grant applications, saying "It’s still unclear whether mRNA vaccine grants will be canceled". And about a half-dozen states are targeting mRNA specifically with legislation dismantling the technology's 'storyline of value', led by Florida (quick summary here by Amy Baxter at PharmaVoice).
The structural collapse at Walgreens. When you think about the ‘vaccine market’, it helps to understand it at a system level, more as a ‘set of markets’ interacting and interoperating as a single economic unit: the drug market + the retail pharmacy market + the telehealth market, each needing the other for commercial success. Walgreens went from a “$100 billion health giant to private-equity salvage project” in around 10 years. (More Blue Spoon thinking here: ‘Structural Collapse at Walgreens’).
The wasteland called “digital health”. A few years ago, Dave Chase wrote a piece in Forbes that still holds true today, probably even more so: Why 98% of Digital Health Startups Are Zombies And What They Can Do About It. “The common view is that 98% of digital health startups are the walking dead right now. These startups received angel funding but they are operating on fumes and clearly aren't on a path to profitability and/or Series A funding. My takeaway: There is no lack of elegant-looking software. If that’s all it took to succeed, I wouldn’t be writing this piece. The recurring issue for these struggling startups is they lack a creative business model and often are missing a clever go-to-market strategy.”
Here’s how The England Journal of Medicine framed the market outlook for “vaccines” (The Vaccine-Hesitant Moment):
Twelve years ago, a meeting of public health experts was convened to reflect on why there was such low uptake of the influenza A (H1N1) vaccine, which was hurriedly developed in response to the pandemic alert issued by the World Health Organization (WHO). The title of the meeting report was “A Crisis of Public Confidence in Vaccines,” and it heralded a warning: “The lack of public confidence in vaccines risks undermining the political will necessary to rapidly respond to a more severe influenza pandemic in the future.”
Keeping in mind this was written long before the world got really weird.
Stuck on Fantasy Island
Assuming stability is one of the ways ruins get made, something Andrew Cuomo learned the hard way. New York City just took a strange turn, with shell-shocked Cuomo, New York’s former governor, conceding to Zohran Mamdani in New York City’s Democratic mayoral primary this week. No one could have imagined that the 33-year-old Democratic Socialist, who until a few months ago was little known outside the Queens neighborhood that he represents (and where I live) as a legislator, would topple one of the biggest names in New York politics. But that’s what happens when you try to ride the dead horse of the past — Cuomo lost because he ran like someone who first campaigned in 1982, which in fact he did.
Vaccines, on the whole, are now being billed by government not as vital, lifesaving tools, but as unnecessary risks, deserving of additional scrutiny. Of the multitude of vaccines on the childhood-immunization schedule, many people already see HPV “as the troublesome one,” Noel Brewer, a vaccine expert and health-behavior researcher at UNC Gillings School of Global Public Health, who served on ACIP until last week, said in an interview for The Atlantic. Its ability to prevent cancer has been underemphasized; some critics have stoked unfounded fears that, because the vaccine guards against a sexually transmitted virus, it will increase promiscuity. And unlike other vaccines recommended in the early adolescent years, such as the meningococcal vaccine and the Tdap booster — which are required by most or allstates for entry into secondary school — HPV is mandated for preteens in only a handful of jurisdictions.
Economists have long argued that vaccines receive far less investment than their public health and economic benefits would justify. Look no further than the Covid-caused collapse of the world’s economy to understand that obvious linkage. Increased life expectancy is the secret sauce behind economic growth.
ACIP was in effect a guarantor that, if pharmaceutical companies develop safe and widely useful vaccines, there will be a market for them. The committee is also the gatekeeper for some $4.7 billion in federal spending on Vaccines for Children, a program which provides free immunizations to roughly half of America’s children. A positive review from ACIP thus unlocks broad access to the American vaccine market. Which is now coming apart at the seams.
The function of strategy is a cool head in a bad hour, coherent vision and better narrative to guide order out of chaos, a big job even when the chaos is static, a superhuman task when chaos is multiplying.
For the pharmaceutical-as-healthcare market, your options are this: get comfortable leading big system change — profit from disorder — or good luck hiding somewhere deep in the atavistic sanctuary of The Standard Model, following The Template, hoping and maybe even praying the disorder doesn't disintegrate your business before you’re fully vested.
A modern strategy doesn’t try to “fix” the past. It constructs a competing future.
For the galaxy of brands, products and vendors trying to make a go of things in the current configuration of the healthcare industrial complex in the United States, common sense would suggest it's time for an entire industry ecosystem to dismount a dead horse. And that process starts by a set of markets collectively asking themselves better, bigger and wilder questions about the next cycle of growth and innovation from the largest and most lucrative market on Earth:
Like, does Africa now represent a better opportunity than the United States?
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/ jgs
John G. Singer is Executive Director of Blue Spoon, the global leader in positioning strategy at a system level. Blue Spoon specializes in constructing new industry ecosystems.