Vaccination rates show missed opportunity for Merck's Zostavax

Analyst estimates of peak sales of Merck's ($MRK) shingles vaccine Zostavax have always varied wildly. When the vaccine was approved in 2006, Sanford C. Bernstein analysts tipped it to peak at $300 million a year. During a renewed push last year, others speculated sales could top $1 billion.

Merck passed the Sanford C. Bernstein prediction in 2011, yet even so Zostavax has fallen short of its potential. Supply problems dogged Zostavax almost from approval onward, and vaccination rates have stayed low. Yet it is increasingly clear that the product is working for those who have been vaccinated. An analysis of more than 750,000 Medicare beneficiaries aged 65 and over showed that the incidence of shingles fell almost 50% among those who received the vaccine from 2007 to 2009.

In those years, though, very few people received the vaccine. The Medicare analysis published in PLoS Medicine found that 3.9% of the study population was vaccinated. Among black people the rate dropped to 0.6% and was lower still for those of low income. The vaccination rate findings add to Centers for Disease Control and Prevention analysis of data from the National Health Interview Survey. In 2007 just 1.9% of those polled over 60 had taken the vaccine. By 2012 the figure was up to 15.8%. The dramatic rise was underpinned by the resumption of full Zostavax supply by Merck.

While the vaccination rate is increasing, it is far short of the government target of 30% of those over 60 by 2020. Hitting that target would be a boon for Merck. Last year sales jumped to $651 million. The vaccination rate needs to double to hit the government goal, so the $1 billion analyst sales predictions look feasible. GlaxoSmithKline ($GSK) might steal market share, though, if its shingles vaccine succeeds in ongoing late-phase trials. Either way, a rising vaccination rate should mean fewer people suffering from the debilitating pain of shingles.

- here's the PLoS paper

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