The End of a Swine Flu Era

With cheers from children and those who act like them when needles are involved, a Food and Drug Administration advisory panel recommended yesterday that next year's seasonal flu vaccine contain the vaccine for the H1N1 virus, aka the swine flu. The decision follows a similar proclamation from the World Health Organization last week.

One shot instead of two should have all our arms feeling a little better, but it makes you wonder if it will instead create more pain for vaccine makers. They all had a nice bump last year from the extra orders of swine flu vaccines.

Source: Company press releases.

Sure, the swine flu didn't send revenue skyrocketing, but it was some nice extra bacon that far exceeded what most companies would have gotten for just the seasonal flu. For instance, AstraZeneca's pandemic sales were more than 2.5 times that of its seasonal FluMist vaccine; Glaxo quadrupled the revenue seen for its seasonal vaccines Fluarix and FluLaval.

Now that the vaccines are to be combined, will the drugmakers be able to charge more for the seasonal flu to try to sustain the momentum? My guess is probably not by much.

That's the main disadvantage of producing vaccines (whether it's for influenza or another virus like Pfizer's (NYSE:PFE) Prevnar or Merck's (NYSE:MRK) Gardasil): Companies are at the whim of government recommendations. Getting on a recommended vaccination list can mean a difference of hundreds of millions of dollars in sales.

Of course the flu vaccine is already recommended for a wide variety of people, many of whom probably don't get vaccinated. Whether the swine flu scare will encourage them to get their vaccination next year remains to be seen.

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