European officials back HPV shots for all girls

A new European directive on HPV vaccination offers good news for Merck and GlaxoSmithKline--but some bad news as well. The European Centre for Disease Prevention and Control (ECDC) now says all girls should be vaccinated against human papillomavirus, and it advises EU governments to push the shots. But the ECDC says vaccinating boys is "unlikely to be cost-effective."

As Reuters reports, HPV vaccination rates in the EU are pretty woeful. Though 19 of 29 countries have HPV vaccination programs, rates of actual use are as low as 17%. Only the U.K. and Portugal had managed to top 80% coverage in girls 10 to 14 years by 2010, the agency said.

So, this presents an opportunity for Merck ($MRK) and GSK ($GSK). The ECDC is pressing government health authorities to get more girls on the vaccination rolls. It's to their advantage, not only from a public health perspective. Broad HPV vaccination now could save lots of money on cancer treatment later. Governments may also be able to save on screening; a recent study showed that GSK's Cervarix was so effective that screening could be ratcheted down in countries where coverage is high, Reuters notes.

Boosting vaccination rates among girls and young women could certainly amp up sales for Merck's Gardasil and GSK's Cervarix. Gardasil came out of the gate with $1.5 billion in sales for its first full year on the market back in 2007. But revenues dropped off in 2010 to about $1 billion. Last year sales grew to $1.2 billion, but that's still lower than folks had anticipated when the shot was first approved.

Merck has been fighting to boost Gardasil sales by broadening its approved uses, which brings us to the ECDC's decision on vaccinating boys. Merck won FDA approval to market the shot for boys, and U.S. vaccination officials recommended last year that all boys should be routinely vaccinated, despite some worries about the cost. So far, at least, the Europeans don't agree.

- read the Reuters news