Merck’s Julie Gerberding, Former CDC Director, on the Future of Vaccines

MB Comment: Merck is the largest US Vaccine Manufacturer. Julie Gerberding was a Director of the Centers for Disease Control (CDC) and took the revolving door from the top of the CDC to the top of the Merck Vaccines Division in 2010. One might assume that her new private-sector position is her reward for being a Merck lapdog with regard to CDC vaccine recommendations during her government employment.

This is an odd interview with a rather obscure publication for a senior Merck Executive. I can only surmise that Gerberding is trying to spin Merck as a modern, hip biotech company to add some flash to what is really a beached whale.

Merck’s reputation and fortunes took a nose dive after Vioxx caused approximately 40,000 heart attack deaths (according to FDA estimates quoted by current OSHA chief David Michaels in his excellent book Doubt is Their Product). That is almost as many deaths as total US combat fatalities in the Vietnam war. Merck’s new Chief Executive Officer Kenneth C. Frazier is the litigation lawyer that fought the Vioxx victims in court and eventually settled for $4.85 billion.

Merck is also plagued by patent expirations on high-priced, blockbuster drugs (sales > $1 billion/year) which are going generic (cheap competition). Merck’s stock is perceived as a value trap by most professional portfolio managers. Merck’s stock price has consistently underperformed its industry group and the S&P500 for years.

Merck is banking on its vaccine division for salvation. But a series of production problems (MMR-V Pro Quad – elevated seizure rate) and vaccine licensure failures (FDA Rejects Gardasil for Older Women – clinical trial data failed to show that Gardasil effectively prevented infections in women 27 to 45 years old) have clouded that outlook.

Gerberding does not seem like she has the skill-set to manage Merck Vaccines into 21st Century global domination. I suspect she will be moved sideways into some figurehead position and replaced by someone with a killer instinct and more private sector management expertise. Gerberding admits in this interview that she is new to marketing. She also says vaccine manufacturers should not try to counter public vaccine safety fears. They should use proxies. Merck contributed $100,000 to the American Academy of Pediatrics Chicago headquarters building fund. Merck’s marketing tools are doctors and school vaccine mandates. Yank those puppet strings Julie — and get doctors and schools to market Merck’s products.

This article does not mention vaccine safety, vaccine adverse reactions or the unprecedented epidemic of neurologically damaged children that is plaguing the nation. Paradoxically, the Merck Manual (the largest-selling medical textbook) defines encephalitis (brain inflammation) as occurring when ‘A virus or vaccine triggers a reaction that makes the immune system attack brain tissue (an autoimmune reaction.’ Anyone who studies the FDA Vaccine Adverse Event Reporting System (VAERS) will surely notice many thousands of reports of rapid-onset encephalitis after vaccination, including many with Merck vaccines. The symptoms of autism are consistent with post-encephalitic syndrome. (also known as Acquired Brain Injury – ABI). Merck’s own medical textbook and VAERS put Merck’s Vaccine Division and its current head Gerberding smack dab at the center of the autism epidemic.

This interview is basically a puff piece by an sycophant journalist, but it is worth wading through if you read between the lines.

************************************************************************************************

Merck’s Julie Gerberding, Former CDC Director, on the Future of Vaccines

‘Julie Gerberding, the former director of the U.S. Centers for Disease Control and Prevention, has been in one of those rare positions for about the past 18 months as president of Merck’s vaccine unit. At Merck (NYSE: MRK), she has been learning the ins and outs of a $5-billion-a-year operation that makes 14 of the 17 vaccines the CDC recommends for children, and nine of the 10 recommended for adults …

Part of what brings Merck, Pfizer, GlaxoSmithKline, and other major vaccine companies into the conversation is the realization that vaccines are no longer just a low-margin, high-liability corporate backwater. New technologies propelled the vaccine market to more than $22 billion in sales in 2009, and projections are that it will keep growing by 10 percent a year over the next five years, according to Kalorama Information, a market research firm. For a diversified company like Merck, with $46 billion in total sales in 2010, vaccines are a sizable business segment …

Julie Gerberding: Vaccines have been in Merck’s DNA forever. We have a tradition of being the scientific source of many of today’s modern vaccines. It’s been a core part of the company, and it will remain a core part of the company. It’s just one of those things Merck has been committed to, and it’s one of the ways we bring value to people. We have a very strong pediatric portfolio, and one of our unique strengths is our adult portfolio. We have a very broad spectrum of vaccines available for adults, either manufactured by Merck or licensed for sale by Merck …

The fastest way to achieve a price improvement is through volume. So, the more manufacturing we do, the more we cover our fixed costs, and the less expensive on a per-dose basis our vaccines will become. So the more global our outlook, and the more we reach people in the developing world that are the hardest to reach, the more value we bring …

The business model is very different. It’s not about trying to maximize your unit profitability fast before your patent wears out. With a vaccine, it’s about how can we continue to position the product, or evolve the product in its life cycle so that it continues to deliver value to people. That can be forever. Our measles vaccine has been around a long time, and it’s still delivering enormous public health value. We don’t have the patent cliff in our way …

X: When you talk about regulatory agencies, and government agencies that are the purchaser of vaccines, you get into politics. That brings the whole vaccine-denier world into the equation. How big of an obstacle is that, and how do you deal with it?

JG: On a global basis, it’s a small issue today. Most people in the world are so grateful to have their child immunized. They see the diseases, and understand how life-saving those vaccines can really be. If you are thinking globally, it’s not the most important obstacle we face. But it’s clearly a powerful local issue in many westernized or developed countries. It’s a growing issue. We have to work harder to engage people in the conversation. And that conversation needs to be led by trusted and credible people, not necessarily vaccine manufacturers …

for people who have already made up their mind that there are issues around the need for vaccines, the manufacturers are not likely to be the best resource for changing their minds. People need to hear balanced information from trusted peers, and/or their doctor. That’s what we need to learn—what really does motivate people’s behavior. The old model would say ‘we just need to give people better information. If they have the facts, they’ll make the right choice.’ The new model is that it’s not a left-brain decision for many parents—this is a right-brain, heartfelt decision. While they can understand objectively that vaccines are important means of protection, when they are sitting with a child on the lap and deciding to give them a shot, it becomes emotional for the parent. Not all parents respond to that situation the same way …

JG: I’m very bullish on vaccines, I think there is incredible innovation going on in the biotech environment. Innovations in antigens [new vaccine targets] and adjuvants [immune-boosting compounds], but also innovations in delivery methods and stability, in combinations that put more than one vaccine in a vial. There’s innovation in vaccine logistics, innovation in vaccine financing, and in partnerships, and translational research. The problem with vaccine innovation is that it isn’t fast. There’s a long runway for these products, and it takes a long time for these products to be commercially relevant and available. You have to be very patient. I’m learning …

X: Have you had surprises in the switch to industry, or impressions that might surprise your peers?

JG: From a personal perspective, there’s an enormous amount of learning. I’m not trained, and wasn’t brought up in a marketing environment. I have to learn how to think about value in ways that are focused on respecting what people really need and want, while at the same time keeping in mind what’s practical and feasible from a private sector perspective. Sometimes that balance is challenging. We have lots of great ideas about things we’d like to be able to do, but if they don’t make business sense, it’s going to be a lot harder for us to do them. Or, we have to creative and think about who we can partner with. How can we move this into a nonprofit? Or how can we get a venture capitalist to share risk on this? Can we create a joint venture? The exciting challenge for me is how we can figure out creative ways to do the things we want to do, because they are the right thing to do even when the business model isn’t oriented toward the blockbuster.’

Read the Article

This entry was posted in The Blog. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>