After the US put a known vaccine sceptic in charge of the country’s health in February, some in the industry initially saw what they took to be reassuring signs.
Regulators approved two new vaccines for Covid-19, while the congressional committee that approved Robert F Kennedy’s appointment was placated by his insistence that he wanted good science to prevail.
The picture however has worsened since then. Last week, Kennedy fired the country’s entire 17-member immunisation advisory committee, replacing them with his own appointees, including other vaccine sceptics. They have their first quarterly meeting next week.
Angela Rasmussen, a virologist at the University of Saskatchewan, said the changes were “objectively really bad for the future of the vaccines, especially in the US, but actually everywhere”.
While the US Food and Drug Administration decides whether a vaccine is approved, the advisory committee recommends who should receive it, based on factors such as age and other health problems. These recommendations often dictate which vaccines health insurance will cover.
Shares in many vaccine makers, and the wider biotech industry, have already been on a downward trend from their pandemic highs. But they have fallen further since Trump came to power in January on worries about what his administration would mean for health policy.
Moderna, which did well from its mRNA vaccine for Covid-19, is down 36 per cent this year. Novavax, which also makes a Covid-19 vaccine, has fallen 18 per cent in that time.
Other pharma groups with vaccine businesses are also suffering, though this is often not the only reason their shares may have fallen. For example, Merck, which makes vaccines including Gardasil for HPV, is down 17 per cent so far this year. But investors are also worried that its cancer blockbuster Keytruda will start to lose patent protections in the next few years.
Linden Thomson, a healthcare investor at asset manager Candriam, said that when the administration came in, investors were more “nervous” about vaccines and the “headline risk” around them, than any other area of healthcare.
She added that since the end of the pandemic, “Investors don’t need . . . to be invested in vaccine pipelines, so the reality is they are not.”
Gareth Powell, a healthcare investor at another assent manager Polar Capital, said the firing and replacement of the advisory committee had taken the uncertainty to “another level”.
He noted that vaccine businesses had previously been seen as valuable parts of larger pharma groups such as Sanofi and GSK as they did not have the same problems when patent protection expires. This is because vaccines are hard to manufacture and need to be made at scale, so do not tend to attract competition from generic drugmakers.
“They were high quality businesses,” he said, “but now investors are nervous.”
Rasmussen believes the new committee could reconsider recommendations on existing vaccines, as well as giving restrictive advice on new ones. One of those could be Gardasil, Merck’s HPV vaccine, she said.
Two of the new members of the committee, Martin Kulldorff and Robert Malone, were hired as expert witnesses to testify against Merck in two trials. One of these focused on Gardasil, which Rasmussen said had become a target in anti-vaccine circles. Merck said it remains “assured of the safety and efficacy profile of our HPV vaccines and the continued positive impact they have on reducing the risk of certain HPV-related cancers and diseases”.
Kulldorff and Malone did not respond to a request for comment.
Rasmussen worries that the committee will go after the big targets of the anti-vax campaigners, starting by trying to restrict the use of Covid-19 vaccines — the Trump administration has already narrowed the recommendations on who should get them — then the HPV vaccine, and then move on to MMR (measles, mumps, and rubella) and polio.
“They’re doing this in a really incremental way so that it’s more accepted by people. That’s why they’re not rushing right in to [restrict] MMR or the polio vaccine. Because if they did that, like right now, everybody would freak out,” she said.
Kennedy has also said he wants placebo-controlled trials for all new vaccines. Rasmussen said this would mean testing new vaccines for diseases like polio against an inactive placebo rather than an active older version of the vaccine, putting “thousands of children” at risk of disease.
Kennedy said the new committee includes “highly credentialed scientists, leading public-health experts, and some of America’s most accomplished physicians” and its members are “committed to demanding definitive safety and efficacy data before making any new vaccine recommendations”.
Companies are still keen to stress the positives. Moderna, which develops mRNA vaccines that have been a particular target of anti-vax groups, said it had received two FDA approvals for vaccines in the past month and has conviction in the “long term scientific and commercial potential of our platform”. It has lost a government contract to fund the development of an avian flu vaccine, but said it is pursuing alternative funding options.
One person close to GSK said the US already spends $9bn a year on the medical costs of diseases that vaccines can prevent, 79 per cent of which is because of disease in unvaccinated adults. “Vaccination has a central role to play in protecting the health of millions of Americans,” they said, adding that the company would “fully engage in scientific dialogue on our vaccines with the appropriate US government bodies”.
Novavax said it “continues to engage productively with the FDA, and we believe that vaccines are the single most effective tool to prevent vaccine preventable diseases. We have appreciated opportunities to interact with our US agencies . . . and provided feedback on how to support the industry.”
The US is by far the biggest market for pharmaceuticals, so if sales drop there, pharma groups will have less of an incentive to keep manufacturing existing vaccines or to develop new ones.
Powell hopes the industry will continue to invest in vaccine development. He thinks early stage trials will continue as these vaccines may not come to market for many years, but added that companies may now pause before embarking on expensive wider trials.
Rasmussen compared the vaccine makers to universities under attack by the Trump administration. “Companies are going to be forced into a position where they have to take some kind of action. You’re going to probably have some . . . that capitulate. And you’re going to have some Harvards who fight back,” she said.
