By Andrea Gerlin
Jan. 15 (Bloomberg) — The influenza pandemic that swept the globe and fueled concern that millions of people would die has resulted in an unprecedented glut of vaccine as fewer people than expected have sought immunization.
Sagging demand has left governments worldwide with surpluses of swine flu vaccine. Many are now selling or donating the excess or slashing pending orders. The biggest vaccine makers — GlaxoSmithKline Plc, Sanofi-Aventis SA, Baxter International Inc., Novartis AG and CSL Ltd. — are seeing a potential $7.6 billion sales windfall shrink, analysts said.
The first flu pandemic in 40 years prompted a worldwide scramble in 2009 to secure supplies of vaccine against the H1N1 virus. When the disease turned out to be milder than predicted, people already wary about the shot’s safety and possible side effects hesitated to get inoculated and demand for it declined.
“I’m very sad that we spent the money like this, very inefficiently,” said Wolfgang Wodarg, a doctor who served in Germany’s Parliament until September and now is on the Council of Europe. “The governments could have put more questions forth.”
The Strasbourg-based council, set up in 1949 to promote democracy and human rights, will debate Wodarg’s proposed resolution on Jan. 28 that governments made unnecessary vaccine purchases after drugmakers, seeking to boost sales, influenced them. Claire Brough, a spokeswoman for London-based Glaxo, said the allegation was “without warrant.” Pascal Barollier, a spokesman for Sanofi, said, “These discussions have always been in a framework of working together, to ensure transparency and to ensure that there was no conflict of interest.”
Predicting the Impact
French Socialist party spokesman Benoit Hamon and Democratic Movement head Francois Bayrou criticized Prime Minister Nicolas Sarkozy’s government for spending millions of euros on vaccines that won’t be used. Government officials and the Geneva-based World Health Organization say it was impossible to predict the course of the virus months ago when decisions about how much vaccine to buy were made.
“The orders were decided in May and June, a moment of real uncertainty,” Didier Houssin, director general of health in France, said at a Paris news conference last month. “We were working under the possibility it could require two shots a person.”
Don’t Dismiss
Public-health experts also warned against dismissing the threat from the virus, saying it may return in a more-virulent form this year or in coming flu seasons.
“We are not out of the woods yet with this virus and it will be rather foolish for everyone to say ‘That’s it,’” John Oxford, professor of virology at Queen Mary’s School of Medicine and Dentistry in London, said in a telephone interview. “It may not be it.”
About 13,000 deaths worldwide from swine flu have been confirmed since it was first identified in Mexico and the U.S. in April, the WHO said yesterday. The figure includes 1,045 deaths in Europe, according to the European Centre for Disease Control and Prevention in Stockholm, and about 10,000 in the U.S., the Atlanta-based Centers for Disease Control and Prevention said Dec. 10. Seasonal influenza kills as many as 500,000 people around the world annually, according to the WHO.
Most large European countries have now protected no more than 10 percent of their populations against the pandemic virus, after ordering enough vaccine for most or all of their residents. One shot is required for most people, instead of the two doses expected when most orders were placed.
Revenue Estimates
Analysts at Morgan Stanley had predicted 2.2 billion pounds ($3.6 billion) of revenue from swine flu for Glaxo in the last quarter of 2009 and the first three months of 2010, $600 million for Novartis and 750 million euros ($1.1 billion) for Sanofi. Actual sales may be as much as 15 percent lower, the firm said in a report last month. Basel, Switzerland-based Bank Sarasin & Cie AG estimated the total worldwide market for swine flu vaccines at $7.6 billion in a mild pandemic.
“Demand seems to be slipping away and clearly that’s going to impact 2010 numbers,” Alex Evans, an analyst for Deutsche Bank AG in London, said Jan. 11.
Sanofi sees no effect on its forecast for this year, said Barollier, the spokesman. Only France has reduced its order, by 11 million doses, and “we are now in discussions with French authorities to agree on compensation for the reduction in the order,” he said. “We don’t see any changes to orders elsewhere, except one small country we are in discussions with.”
Novartis, Glaxo
Eric Althoff, a spokesman for Novartis, said the company “is still seeing worldwide demand for vaccines.” France canceled 7 million of the 16 million doses it ordered from the company, he said.
Glaxo declined to comment on sales. “The pandemic is constantly evolving and we are continuing to supply vaccines to governments and getting new orders as well,” Brough said in a telephone interview. “We are looking how best to amend new orders and supply governments with adequate vaccines.”
Baxter spokeswoman Mavis Prall said the company’s contracts include provisions that allow customers to adjust their orders, and the U.K. has already done so. The Deerfield, Illinois-based company will discuss the financial implications of declining demand, if any, when it releases fourth-quarter earnings on Jan. 28, Prall said in an interview.
The U.S. cut its vaccine order from CSL to 14 million doses from 36 million doses, Rachel David, a spokeswoman for the Melbourne-based company, said on Jan. 11. The change doesn’t affect contracts with other companies.
Actual Needs
Bill Hall, a spokesman for the U.S. Department of Health and Human Services, said the contracts were designed for flexibility and orders can be changed if companies don’t meet their delivery schedules or if demand in the U.S. drops.
“Our initial contracts were signed last spring before we knew many critical pieces of information, such as whether people would need one or two doses for an adequate immune response,” he said in an e-mail.
Hall said the U.S. agreed to reduce its order from CSL after the company said there would be “significant delays” in delivery of the orders. The U.S. hasn’t altered its agreements with four other vaccine-makers, he said.
The U.K. is talking to London-based Glaxo about canceling some of its order, David Salisbury, director of immunization for the Department of Health, said at a Jan. 8 news conference. The country had planned to buy as many as 132 million doses from Glaxo and Baxter.
Suspended Deliveries
The U.K. suspended deliveries of Baxter’s vaccine after receiving 5 million doses, the Department of Health said in an e-mailed statement.
France said on Jan. 4 it had canceled 50 million doses of vaccine, more than half its total order of 94 million costing 712 million euros, from Glaxo, Basel, Switzerland-based Novartis and Paris-based Sanofi. It said it may sell excess supplies to countries including Ukraine and Mexico. Five million of France’s 62 million people had been immunized as of Jan. 4, the Interior Ministry said.
Germany reduced its 400 million-euro order for Glaxo’s vaccine to 34 million doses from 50 million doses, said Thomas Spieker, a spokesman for the Health Ministry in Lower Saxony state.
Spain changed its order to 13.5 million doses from 37 million, said a spokeswoman at the health ministry who declined to be identified. The contracts with manufacturers, including Novartis, Glaxo and Sanofi, contained revision clauses allowing it to alter its order, she said.
Belgium’s Order
Belgium is in talks with Glaxo about reducing its order for 12.6 million doses of the vaccine, company spokesman Julien Brabants said Jan. 8. About five million doses have already been delivered to the country, he said.
The Dutch government agreed in November to sell at cost 19 million vaccine doses to countries facing a shortage, Health Minister Ab Klink wrote to parliament on Nov. 27. The Netherlands ordered 34 million doses of the shot for its 16.4 million people from Glaxo and Novartis in June. It will retain 2.2 million doses “for unforeseen circumstances,” health ministry spokeswoman Nienke Kooistra said in a telephone interview.
The country also expects to donate 10 percent of its supply to poor countries through the WHO, as part of an international effort announced by U.S. President Barack Obama on Sept. 17. Switzerland, Norway, Italy and the U.K. are among the European countries backing the initiative.
U.K. Forecast
After the WHO declared a swine flu pandemic in June and thousands of people began getting ill, alarm spread in some countries. In July, England’s top doctor told the National Health Service to prepare for as many as 65,000 deaths from the pandemic. As the website for the government’s National Pandemic Flu Service was rolled out later that month, it was bombarded by 9.3 million hits an hour and crashed.
In November, New York City health officials faced public outcry for giving 6 percent of the city’s limited doses of vaccine to private employers including Goldman Sachs Group Inc. and Citigroup Inc. before some pregnant women, children and other people in risk groups were vaccinated.
Last month vaccination centers in Paris extended their opening hours to 14 hours a day, seven days a week by order of Sarkozy after lines developed and people waited hours to receive the shot.
Newspaper Ads
Since the near-panic over swine flu has subsided, the U.K. reduced its expected death toll to 1,000 and officials have begun debating when to shut the pandemic flu service. Almost all Americans who want the vaccine can now obtain it and the U.S. government is running newspaper advertisements urging them to do so. Paris clinics reduced their opening times to a total of 32 hours a week this week as some had more staff than people waiting for the shot.
Shortages of seasonal flu vaccine, rather than surpluses, tend to be more common in most years, Evans of Deutsche Bank said. If demand for the pandemic vaccine doesn’t pick up soon and manufacturers continue their production, the oversupply could mount further, especially if a separate swine flu vaccine is deemed unnecessary next year.
Next month WHO representatives will meet in Geneva to determine which virus strains to include in the 2010-2011 seasonal influenza vaccine for the Northern Hemisphere. A decision to include the pandemic strain in next year’s seasonal flu shot may make the separate pandemic shot unnecessary and further limit its market.
Aftermath News 
It hasn’t been shipped o Hatii yet?
Darfur hasn’t been in the news in a while–I guess it’s ok now?
“to”