Considerations of public health and commercialism in the Cuban biotech sector and vaccine industry.

Lecture by Jens Plahte, cand. philol., Research Fellow, Centre for Technology, Innovation and Culture University of Oslo Visiting Researcher, Centre for Health and Welfare Studies University of Havana First Annual Latin America Research Conference: Contributing to a better future? The role of Norway based Latin America research Oslo, 12 –13 November 2009 [email protected]

Centre for Technology, Innovation and Culture

Outline of presentation

• Doctoral dissertation • The Cuban biotech sector and vaccine industry • Two paradoxes Centre for Technology, Innovation and Culture

Ph.D. dissertation

• “Vaccine innovation for public health or profits – The Cuban vaccine industry in a national and global context ” • Funded by the Research Council of Norway • Papers: – A decision centered vaccine innovation model (with Lisbeth Meyer Næss, NIPH) – Tiered prices of vaccines: not a subsidy, but a win-win-

win

situation (Lancet Inf Dis 5(1), 2005) – The pneumococcal vaccine Advance Market Commitment may create a market, but seems to fail as ‘market-pull’ – Strategic evaluations and techno-economic networks. Vaccine innovation in the Cuban biotech sector: for public health – or profits?

– Development, organization and management of techno-economic networks: the Cuban biotech sector and vaccine industry Centre for Technology, Innovation and Culture

The Cuban biotech sector

• An industrial district of western Havana • ≈ 20 000 workers • ≈ 10 research and production centres • Biopharmaceuticals are the second most important foreign currency earner of Cuba • Diagnostics, therapeutics, vaccines • Massive investments since 1981 • Long term focus on science, education and health since 1959 Centre for Technology, Innovation and Culture

The Cuban vaccine industry

• Main centres – Centro de Ingeniería Genética y Biotechnología – Centro de Inmunología Molecular – Instituto Finlay • Main products – Meningococcal group B vaccine – Hepatitis B vaccine (hepB) – Haemophilus B vaccine (HiB), synthetic – Pentavalent DTP-HiB-hepB • Vaccines are important in the total biotech product portfolio Centre for Technology, Innovation and Culture

Two paradoxes

High priorities of the Castro The initial rationale of the biotech initiative was to target ’modern’ diseases Government are public health, medical diplomacy, (cancer, cardiov. and cong. dis.) as well as export revenues generation Why?

… but … … but … … vaccines target ’traditional’ infectious diseases … Cuban vaccines are not sold on the global public sector markets Centre for Technology, Innovation and Culture

Strategic and techno-economic evaluations

Health transition required ’modern’ measures (products) Centre for Technology, Innovation and Culture Adapted from Callon (1992)

Economic revenues as rationale: Two sides of the same coin

Use domestic supplies to legitimate creating an export oriented sector Centre for Technology, Innovation and Culture Finance domestic supply by commercial exports

Late 1970s: Morbidity and mortality transition

Patterns: Traditional – Infectious diseases – Malnutrition – Neonatal and maternal mortality Interventions: – Immunization – Sanitation – Primary health care – Essential drugs Modern – Cardiovascular conditions – Congenital disorders – Cancer – Secondary and tertiary health care – Prenatal diagnosis – Advanced biopharmaceuticals D epletion of traditional measures  Centre for Technology, Innovation and Culture Need for modern measures

The meningococcal epidemic 1976-91

• National emergency • No vaccine available • Domestic vaccine innovation project 1983  • Group B meningococal disease eliminated in 1991 • Finlay Institute founded in 1991 – Vaccine innovation capabilities – Based on traditional bacteria fermentation technologies Centre for Technology, Innovation and Culture

Endemic hepatitis B

• Recombinant vaccine developed by Merck in 1986 • Creation of a platform technology: Yeast based expression system • CIGB founded in 1986 – Vaccine innovation capabilities – Based on single cell organism recombinant technologies • Cuban recombinant hepatitis B vaccine licensed in 1992 Centre for Technology, Innovation and Culture

Altered strategic evaluations

Vaccine innovation capabilities were developed – National meningococcal epidemic – Endemic hepatitis B – Platform technology development, technological window of opportunity  Vaccine innovation became important because capabilities had been developed Centre for Technology, Innovation and Culture

Strategic and techno-economic evaluations

Centre for Technology, Innovation and Culture Adapted from Callon (1992)

Two paradoxes

The initial rationale of the biotech initiative was to target ’modern’ diseases (cancer, cardiov. and cong. dis.) … but … … vaccines target ’traditional’ infectious diseases Centre for Technology, Innovation and Culture The Castro Government has public health and medical diplomacy as a high priority, as well as a commercial motivation … but … … Cuban vaccines are not sold on the global public sector markets

Markets for Cuban vaccines

Middle income countries: Argentina, Venezuela, China, Russia, South Africa, South Korea

Global public sector markets

• Least developed countries in Africa, Asia and Latin America • Procurement services by UNICEF and PAHO Centre for Technology, Innovation and Culture

Price discrimination

Plahte 2005, Lancet Inf. Dis., Vol. 5, No. 1: Tiered prices of vaccines: not a subsidy, but a win-win-

win

situation Single market Centre for Technology, Innovation and Culture Low price market High price market

The Cuban health system

• Top national priority (with education and science) • Medical diplomacy: Medicine as an instrument of foreign policies • Foreign currency generation by exportation – of medical services – of biopharmaceuticals Centre for Technology, Innovation and Culture

Possible explanations

• The Cubans are unaware of the price discrimination mechanism????

• Political considerations????

• Lack of commercial motivation?????

• Cost ????

– Embargo raises production costs

Explanation: Philanthropy sometimes requires a competitive edge!

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Conclusions

1) Despite the transition towards ’modern’ public health challenges, ’traditional’ products became important.

One important reason is that vaccine innovation capabilities were established because – a national emergency had to be countered – of the need and opportunity for technology platform creation Once established, these capabilities opened windows of opportunity for further vaccine innovation Centre for Technology, Innovation and Culture

Conclusions

2) Despite it being profitable to do so, … and despite its focus on public health and medical diplomacy, … and despite being a self declared socialist state, … Cuba does not sells vaccines on the global public sector markets Most probable reason: Uncompetitive production costs Centre for Technology, Innovation and Culture