another flu vaccine myth

Another flu vaccine myth – Big Pharma profits

There is a more general article – about the myth of Big Pharma vaccine profits – which has recently been updated and republished. 

The 2015-16 flu season is upon us, and that means it’s flu vaccine time again. And flu vaccine myth time. There is another flu vaccine myth – Big Pharma profits – that needs to be debunked.

Despite the availability of several flu vaccines, many people think that the flu is a painless, harmless disease, a belief belied by evidence. Wrong.

To put flu in perspective, in the USA, depending on the severity of the flu season, from 3,000 (which happened 25 years ago, and hasn’t been that low since) to 49,000 people die every year. Worldwide, about 250,000 to 500,000 people die from the flu every year. A flu pandemic, like the one in 1918, killed 50-100 million humans, much more scary than Ebola.

Of course, a fairly large group of people, including some who are pro-science (read, pro-vaccine), will fall into the arms of their favorite flu vaccine myth, and then refuse to get the flu vaccine. Given the dangers of the flu, and given the loss in productivity, income, and lives, you’d think that the flu vaccine would be near the top of health care needs for the average person.

My fellow blogger, Tara Haelle, spent numerous hours putting together the Top Myths about the flu vaccine. She debunks these myths completely out of the water. But antivaccination myths are never static, there’s always a new variant.

Flu-Myths-vs-Facts-GSK

Another flu vaccine myth – profits

 

Today’s myth is that the flu vaccine is being pushed because of money–that the flu vaccine somehow fills the coffers of the pharmaceutical industry.

Before I get to the actual numbers, I’m going to draw a line in the sand. Actually two lines. First, I think pharmaceutical companies have the right to make a profit, because they take on all the risk. We forget that pharmaceutical companies invest in a lot of products that fail to get through clinical trials (because clinical trials are the gold standard of determining safety and effectiveness). They invest in manufacturing. They invest in people who do the research and development. For the non-business person, there’s an odd assumption that the risk capital to make those investments somehow comes free of charge. A well-run corporation needs to generate profits to pay for the next best thing, whether it’s a new lifesaving cardiovascular drug or a new cancer therapy. Or a new vaccine.

The second line in the figurative sand is that just because a pharmaceutical company makes profits does not make them unethical or immoral. That’s a logical fallacy of the highest order. Maybe some who make this particular accusation about real human beings can themselves be bought by dollars, so they apply their own moral failings to others. Yes, some Big Pharma companies are annoyingly corrupt at many levels (I look at you Glaxo SmithKline). But many instill a credo of concern for the patient and health care workers above everything else. Why? Because it is well understood that doing the right ethical thing usually brings higher profits in the medical products industry.

 

Then, what are the facts about flu vaccine profits?

Flu Vaccine Sales

 

Worldwide sales of flu vaccines in 2013 was around $3.1 billion, according to estimates of a healthcare market research firm. Yes, that may appear to be large, may drive strategic interests of the main companies that manufacture influenza vaccines: Sanofi Pasteur, Glaxo SmithKline and Novartis.

But let’s put this in context of the worldwide sales of all pharmaceutical products in 2013–nearly US$1 trillion. In other words, various flu vaccines make up less than 0.3% of worldwide sales of Big Pharma, so from a strategic point of view, it’s not that interesting. Just for context, cholesterol lowering drugs, like statins, sold more than $33 billion two years ago. If I were a Big Pharma executive, I’d be telling my R&D and Marketing divisions to invest in new statins, because the potential return on investment could be 10X higher.

Leaving the meta level review of flu vaccine sales, let’s examine those sales in context of the individual Big 3 companies in this particular vaccine sector:

  • Sanofi Pasteur (division of Sanofi). Total sales $41.6 billion. Flu vaccine sales $1.3 billion. In other words, flu vaccine makes up around 3% of their sales
  • Glaxo SmithKline. Total sales $32.3 billion. Flu vaccine sales $420 million, or 1.3% of their total sales.
  • Novartis. Total sales $57.9 billion. Flu vaccine sales $215 million, or 0.4% of their sales.

Note: the remaining $1.1 billion in flu vaccine sales is spread over 15 other manufacturers, none of whom have a major market share.

Flu Vaccine Profits

 

One of the errors made by this who use sales as their standard of analyzing the importance of a product over other statistical factors. For example, as a corporate executive, sales was not as important as other factors, such as net profit. Technically a product that has lower sales, but a much higher net profit percentage is a much better investment for a corporation.

As I reviewed previously, vaccines in general have a lower net profit percent, around 43.8%, than other pharmaceuticals, which have a net profit of around 46.3%. There are many reasons for the lower profit for vaccines, but it’s mostly due to shipping and spoilage loss.

For flu vaccines, it’s actually much worse. Flu vaccines are only useful for one flu season, so anything unsold at the end of the flu season is destroyed. There are often shortages of flu vaccine when demand is higher than expected, like during pandemics. In addition, flu vaccine manufacturers could have a higher cost of goods (which is the cash cost of manufacturing, distribution and returns) than the average 32% for other vaccines–possibly closer to 34%.

Thus, if you look at flu vaccine as a profit center for Big Pharma, there really are better strategic and tactical choices for pharmaceutical companies.

Better Strategic Choice

 

I’ve written about this before–if Big Pharma were run solely for profits over all other considerations, then they would stop making vaccines. If pharmaceutical companies stopped selling flu vaccines in the USA, out of a population of 320 million people, it is estimated that vaccines prevent around 78,000 hospitalizations in the USA. In addition, the estimated annual deaths from flu would probably be 6,000 to 100,000 individuals.

Setting aside the costs of lost productivity and deaths from the flu, both of which are estimated to be very high, hospitalizations alone would cost around $4,000 per individual, or a total of nearly $300 million. Furthermore, millions of individuals, in a full blown flu outbreak, will visit their physicians and emergency rooms, adding another $1 billion or more in health care costs. And that’s just the USA. It’s probably 3-5X these costs if we looked at the whole planet.

And Big Pharma would capture about 30-40% of those healthcare costs, for consumable supplies, drugs, treatments for secondary infections, and other products. And these products have a much higher gross profit than vaccines.

In other words, if we assume that pharmaceutical company decisions are strictly driven by cold blooded profit, it might make more sense to stop selling the flu vaccine, and sell supplies to the hospitals and physician offices. Ebola would be nothing compared to a full blown flu pandemic in profits for Big Pharma–and to be completely ruthless about this disease, but Big Mortuary would be dancing in the streets.

Some probably would say “take vaccines from drug companies and let governments manufacture and distribute it.” Really? The US government, and from what I can tell most governments, are barely capable of repairing streets, let alone manufacturing flu vaccines.

The investment in manufacturing vaccines is huge, something outside of the budget of most governments. And I’m not sure I would trust the FDA to self regulate development and manufacturing of vaccines. At least the FDA is mostly antagonistic to Big Pharma (despite what is believed without evidence), rejecting nearly 90% of drug applications in most sectors. I’m pretty sure it wouldn’t work that well with the government doing it. Who knows what a new US President would do, someone who is opposed to vaccines for example.

The flu vaccine is not perfect. Every year, major health care agencies in countries all across the world attempt to guess what variants of the flu will be most prevalent. Sometimes they get it right. Sometimes, they don’t. But it is safe, and it’s much more effective in preventing the flu than anything else. Period. Unless you lock yourself in a sealed room every flu season, and sterilize all foods and other stuff that enter your room.

In fact, the myths about flu vaccines are myths simply because they are unsupported by real scientific evidence. They are myths because they are easily debunked by real scientific evidence.

TL;DR version

 

  • Flu vaccine sales are small portion of worldwide pharmaceutical company revenues, less than 0.3%.
  • The Big Three flu vaccine manufacturers make less than 4.5% of their total corporate revenues with the vaccine.
  • Other pharmaceutical products have up to 10% greater gross profits than vaccines. The better strategic choice for Big Pharma companies is in other drugs.
  • If Big Pharma stopped making vaccines, they would probably make more money at a higher profit percentage.

Basically, this particular flu vaccine myth has little merit. It’s a strawman argument which does not have any material impact on the reasons to get or not get the flu vaccine. There are really no logical excuses for not getting the flu vaccine–unless you enjoy getting really sick and putting yourself and others at risk of going to the hospital and dying. The choice really is easy.

Editor’s note: This article was originally published in October 2014. It has been revised to fix broken links, update format, correct some grammatical and spelling errors, and to include more current information.

Key citations:

 

The Original Skeptical Raptor
Chief Executive Officer at SkepticalRaptor
Lifetime lover of science, especially biomedical research. Spent years in academics, business development, research, and traveling the world shilling for Big Pharma. I love sports, mostly college basketball and football, hockey, and baseball. I enjoy great food and intelligent conversation. And a delicious morning coffee!
  • disciple1776

    To those who have read the article: I have two things for you to keep in mind. The “money” numbers cited are irrelevant. The only thing that those numbers reflect are revenue (and if anyone out there things that 3% of $40+ billion doesn’t effect the bottom line of a company… you’re nuts!). plus these are GROSS revenue numbers which basically tell us… nothing about how they impact the corporation AT ALL!

    I call your attention to two completely MISSED details.

    Profit. That’s number one. If you sell $10B worth of stuff but it cost you $30B to sell it… It doesn’t matter how cool your gross revenues are because you’re are $20B in the hole. Flu vaccines are VERY VERY Profitable. So if the margins on the flu shots are amazing (lets say 40% as opposed to a standard 10-20%)… I would say that is money worth chasing! This individual who wrote this article I must respectfully say as an accountant and entrepreneur has no clue what they are talking about when it comes to money and business. Disregard their insight.

    Marketing. Easy money is easy money. No sane person is going to leave easy money on the table and with so many corporations (which includes hospitals btw) and governments pushing and pushing and pushing the flu vaccine on people… that’s easy money for the big-pharm and they love the easy money. Think about it so sales rep costs, no advertising costs (because they are picked up by the intermediary not the pharm co.) That’s just more and more profit for them.

    Don’t buy this BS that money has nothing to do with it or that the big pharm companies (along with your corporations and governments) have no self interest at heart when they make these moves. ITS ALL ABOUT MONEY, POWER, and SELF-INTEREST! Everything is. Why do you think this individual is writing this article? There’s no self-interest there? They’re just a philanthropic blog writer who hopes to gain NOTHING from this blog? Self-interest runs your life and it runs mine and if you were CEO of a big pharm company you would do exactly what they’ve done with the flu vaccine. Which, by the way, I have no problem with what the pharm companies are doing as long as freedom to choose still exists (and that’s fading rapidly… just ask your local nurse.) But, in any case, I feel like they have the freedom to make their moves! But, I’m free to make mine and they can keep their vaccine and cram it.

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  • Tom Jones

    If I may, I will dispute your your figure of 49,000 deaths from flu every year in the US. http://www.cdc.gov/nchs/data/nvsr/nvsr63/nvsr63_09.pdf See the 3rd table 10 here. To get 49,000 the CDC always adds pnuemonia deaths to the flu deaths to sell more flu shots. Flu deaths alone is about 1000 but add it too pneumonia you get 49,000. I know people with the flu can get pneumonia and die of the complications, so lets exaggerate and say 2000 people die of flu every year, still a long ways from 49,000. The flu shot does not work for Pneumonia.

    Also per the CDC, 90% of those deaths are over 65, so why would I bother getting a flu shot with its potential side effects if I am under 65, for the slight chance I may get the flu. Also Per the CDC the flu shot is only 60% effective in a good year. http://www.cdc.gov/flu/about/qa/vaccineeffect.htm
    The first paragraph here says in a bad year the flu shot is 0% effective and then goto near bottom at Heading “What do recent Vaccine effectiveness studies show” says “flu shot 50-60% effective in a good year”. This is the CDC in 2014.

    http://cid.oxfordjournals.org/content/early/2014/09/29/cid.ciu680.short This link shows that taking the flu shot every year can make you more susceptible to the flu. I could show several more studies that say this.
    Another point, yes I agree Pharma can make a honest profit. I think the flu shots are pushed because it is money for others too, not just Pharma. The doctors get to bill for a easy patient visit to give the flu shot. Also it’s the corporations that want you to take the flu shot so you don’t get sick and miss work, they do not care if you get disabled by a flu shot, they then hire someone else. I am not anti-vaccine, just anti flu shot and the latest 3 or 4 vaccines added to schedule.

  • beulah

    effective flu vaccines really work out. it may be helpful if it really works. flu vaccine might be showing an effect atleast now. it is really a profit to mankind. thanks for sharing. regards, beulah (healthcareadmin.org)

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  • Lori Alayne Weber Miller

    That would be to imply that drug companies would make more money not making flu vaccines. but that is only if the flu vaccines are effective , which they are not. In fact the sale of antivirals is actually better since they started offering the flu vaccine. Also that would imply that morbidity and mortality from the flu had improved since flu vaccines became available and they have not.

  • sptmal

    hello, I have been looking for some solid information on the flu vaccine, and your article has helped debunk a key myth. Thank you for this.
    I recently found this link on an anti-flu vaccine site, and it seems to be the one they go to usually. I thought I would ask for your scientific opinion on it: http://www.ncbi.nlm.nih.gov/pubmedhealth/PMH0010949/
    It is a cochrane review on the topic of flu efficacy. Thanks for your time.

    • AutismDad

      In other words, according to this accepted study, is that the flu vac barely helps anyone, except shareholders.

      • Accepted by whom? You mean, an article written by a paid shill of the antivaccination cult?

        I know you’re a close-minded, uneducated, ignorant fool, but if ONE article goes against the scientific consensus, based on evidence, you try to find out why. And follow the money, he’s a third rate researcher who decided to take money from antivaccine people to publish papers.

        Wakefield Junior. 🙂

        • AutismDad

          Try and keep up Jethro. The link provided is what my comment eluded to. I’ll try to slow it done for you from now on.

        • Tom Jones

          Wow that’s pretty strong. I though the cochrane group were top researchers. It is actually not one article either, there are other studies showing flu shot barely works. http://www.bmj.com/content/346/bmj.f3037 -http://www.ncbi.nlm.nih.gov/pubmed/25821227
          You say the article goes against scientific consensus. Sorry I don’t buy that. That reminds me of the old saying if you repeat a lie often enough it becomes truth. http://www.forbes.com/sites/erikakelton/2013/07/29/is-big-pharma-addicted-to-fraud/

          -http://www.pharmamyths.net/files/JLME_ARTICLE_2013.pdf Remember your science is completely corrupt, right down to falsifying drug tests all the time.

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  • vforba

    What I would like to know is if the author has ever read the MSDS fact sheet about the thimerosal

  • Frank Harrison

    Actually vaccines are for profit. Just not in one-dimensional thinking. Let’s open this up a little bit. CDC doctor comes into the light, blows the whistle. Vaccines do more harm than good. Why? Various long term after effects. Please notice every time on e of these debunking lists come up, the data involved is only for a 6 month period. But you get a flu vaccine every year right? sometimes 2X a year. What are the effects of getting that shot on the body after 5 years. No data. 10 years, no data. 1 year, no data. Six months, no side effects, no harmful repercussions. Come to think of it, six months is the term test for GMO foods, pest repellents, weed killing sprays, etc. etc. How come there are no five year studies, or when there are 5 year studies, the AMA/Surgeon General come out so quick to debunk them and label the data as quack science? Because there’s money to be made in long-term effects. But don’t take my word for it, look at your own health. .

    • Sara Lucy

      It’s even spookier when you look at the data 50-100 years out. It really starts to look like vaccines aren’t doing anything but delaying the inevitable, and all for profit.

      ETA* — this is sarcasm.

      • Don’t invent stats that don’t exist. Fewer people today (meaning nearly 0) from diphtheria, smallpox, chickenpox, measles, polio, flu, typhoid, etc. etc. because of….wait for it…VACCINES.

        The only reason why there might be some “inevitable” return of diseases is because…wait for it….vaccine denying.

        • Sara Lucy

          Bad joke. I was being hasty and dismissive.

          Most of the cohort being vaccinated today will die naturally at some point within the next 50-75 years. That’s what I meant by delaying the inevitable… we can either die today from flu/diptheria/measles/etc, or get the vaccine and die maybe 50 years from now because we survived today.

          There has to be some rational cutoff point, in terms of years or other variables, for the “long-term studies” of outcomes that Frank Harrison demands. Otherwise it all blurs into the inevitable decay and death that is a consequence of life.

          Sometimes the cutoff point is determined by economics. Maybe it always is. In the meantime, while people complain about profits, millions of lives are being saved (improved, prolonged) by vaccines.

        • AutismDad

          You can’t actually prove that. Its pure assumption

          • Actually, I can and I have. But you’re too ignorant and close-minded to understand and accept it.

            You use the word “assumption.” An assumption is not something a scientist does. Real science depends on evidence, and I have it.

            But then again, you’re ignorant and close-minded.

          • AutismDad

            Prove it to me big man. or are you too busy shooting your mouth off?

      • Guest

        “It really starts to look like vaccines aren’t doing anything but delaying the inevitable, and all for profit.”

        Isn’t that what all of medicine is? Delaying the inevitable? What a strange thing to think: It won’t make me eternal, so it’s not worth it.

        • Sara Lucy

          I should’ve noted it was sarcasm, because if you avoid the flu shot and die from flu this year, so much for worrying over those “various long term after effects.”

          Long term data will be increasingly vulnerable to confounders, and at some point we all die anyway.

    • What whistle blower? You mean the one that’s been discredited? And his pals Wakefield and Hooker that was retracted for, I don’t know, maybe lying? What evidence do you have that vaccines are dangerous? Dumpster diving in the VAERS database which is so unscientific that it’s laughable?

      What AMA/Surgeon General? They’re not the same thing in the first place. And in the second place, huh?

      I do love your logical fallacies:

      1. Cherry picking
      2. Appeal to ignorance (and damn you’re ignorant)
      3. Appeal to conspiracy
      4. Nirvana fallacy

      Probably more. Do you know why people like you use logical fallacies? Because your arguments lack evidence, so you need to confuse the debate. I’m too smart for that. You are simply not.

      • AutismDad

        Sure troll and everything you say is without merit.

        • Ad hominem. Good for you. Since I own this website and blog, basically, it’s impossible for me to troll myself. On the other hand, you, the ignorant and close-minded one. Well, that’s up for debate.

          • AutismDad

            You’re trolling the topic, and ad nothing but stooge like answers.

      • Tom Jones

        Skeptical Raptor Using VAERS data base is unscientific?? Wow. If the CDC can us it, so can we. See herehttp://www.cdc.gov/vaccinesafety/Vaccine_Monitoring/Index.html You will see then CDC uses it all the time. Yes the data there is not proved cause and effect, BUT you can not ignore the data, a doctor would not put in a report unless he thought it was vaccine related. There is also over 90% under reporting so multiply any event by 10 times. The CDC uses it, so can we.
        Cheery picking? Don’t we all.

    • AutismDad

      Paul Offit himself made 46 million on one vaccine he had a patent for.

      • His vaccine saves 250,000 lives a year. He’s being underpaid.

        By the way troll, how many lives have you saved? LOL

        • AutismDad

          Prove his vaccines save exactly 250,000 lives a year. LOL

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  • Ya know, that’s actually my favorite of the anti-vaccine myths: That vaccines are solely for profit. Unfortunately for me, that one seems to be dying down (for now), and the “Vaccine inserts,” and “vaccine ingredients” are the ones I’m encountering more of.

    Then again, with the inserts one, I love pointing out that if you look closely at the insert for Cialis it says “May cause you to walk into walls.” The reason for that is I was involved with a pharmakinetics study for it, and after dosing, I was talking on the phone and walked into a wall. When one of the study nurses saw the red mark on my forehead, they asked what happened. It was entered into my AE report. lol

    • AutismDad

      Explains the goofiness

      • Don’t be so hard on yourself.

        • AutismDad

          aren’t you clever….thats right, you aren’t

  • lilady R.N.

    FYI…The current price list for every vaccine on the Recommended Childhood Vaccine Schedule and the Recommended Adult Vaccine Schedule…with costs per dose of all 2014-2015 seasonal influenza vaccines for children and for adults:

    http://www.cdc.gov/vaccines/programs/vfc/awardees/vaccine-management/price-list/

    • AutismDad

      Is that supposed to prove no profit? How many millions of doses are sold each year of each one? When you start multiplying $16.00 by a couple of hundred millions its hardly peanuts.

      • They’d make much more money by following your policy of letting children get sick and die from vaccine preventable diseases.

        BTW, your lack of knowledge of business finance is laughable.

        • AutismDad

          do you always respond with brainfarts? Or am I catching you on a GOOD day?

  • Lawrence McNamara

    Pharmaceutical companies would rather get another Viagra on the market than another vaccine……just the amount of money spent on the “Little Blue Pill” dwarfs the profits that are made via vaccines.

    • Yes. And remember Viagra was discovered accidentally, not by a research strategy. Pfizer was in early clinical trials with a drug to treat pulmonary hypotension (a deadly disease), when they noticed a certain “adverse effect” for those who took the drug.

      It’s hard (pun intended) not to laugh about this story.

      The rumors through the medical world was that Pfizer scientists were sneaking pill home. I’m not saying, but I’m saying.

      Interestingly, Viagra is still used as an important drug in treating pulmonary hypotension (it’s know as Revatio, and is generic, so pretty cheap).

      But you’re point is completely correct. They would actually rather accidentally discover a new ED drug, or pattern baldness drug, or new statin than a vaccine.

  • Ben Fairbanks

    Hey, I don’t mean to be your editor, but some of the sales numbers don’t all add up. For GSK, 420 million is closer to 1.3% of 32 billion and for Novartis, 215 million is less than half a percent of 58 billion. These numbers would mean that flu vaccine sales are even less relevant to the bottom line of those profiteering pharma companies.
    Good post, by the way. You make the point, but I’d like to reiterate, that profit is not necessarily the result of unethical intent or action. Moreover, everyone who who collects a paycheck is motivated by profit. As A. Smith said (paraphrasing), it’s not from the benevolence of the butcher, the baker and the brewer that we obtain our dinner but by each man’s individual pursuit of his own interests.
    Vaccines are a small margin product for pharma. They earn their producers relatively little money considering the volume produced. Statins and chemotherapeutic agents may have a much higher margin, but just because these products generate income for the industry, it doesn’t mean that they don’t save lives. And such products would not exist were it not for robust incentives to generate them.

    • Sara Lucy

      Yes, the numbers were throwing me off, too.

    • Stupidly, I had the right numbers, but wrong percentage calculation. Corrected. Thanks.