SEOUL - One month after South Korea's Ministry for Health, Welfare and Family Affairs failed to select a company to provide A/H1N1 vaccines at what it considered a "reasonable price," the ministry reopened talks with Baxter International, GlaxoSmithKline, Novartis, CSL of Australia and Sanofi-Aventis to calm mounting public pressure to secure the vaccines.

"We have reopened talks with the five multinational companies, and we expect to sign a formal deal with one of them soon," Kim Chang-Hoon, deputy director of Vaccine Preventable Disease Control and the National Immunization Program division of Korea's Center for Disease Control and Prevention, told PharmAsia News. "All the multinational companies - except Baxter - have provided vaccines to South Korea in the past."

Kim added that the ministry is trying to secure the vaccines from an international outfit for 1.3 million South Koreans while also aiming to secure the same amount from South Korean firm Green Cross.

"We have asked for the vaccines at KRW7,000 [$5.62] per dose, but the cpompanies including the big three flu vaccine suppliers GSK, Novartis, Sanofi-Aventis want to offer the vaccine at more than KRW10,000 [$8.00]," Kim said. "And, we asked for an exact timetable for the vaccine supply, but they couldn't provide an exact schedule."

Along with the price gap, the five companies also demanded exemption from responsibility from the potential occurrence of allergic reactions to their vaccines, Kim said.

"While we pursue the current negotiations with the five companies now, we will also be talking with other multinational companies interested in supplying flu vaccines to us," Kim said.

Companies Mum On Negotiations, Except Baxter?

Officials at the Korean offices of GSK and Novartis confirmed their ongoing talks with the Korean government, but were short of signaling any imminent deal.

"Price difference was a minor issue for us in the bidding [on July 15]," GSK Korea Communications Director Myung Hae-Kyung told PharmAsia News. "There were things we were unhappy with." Myung refused to specify the company's complaints.

A Novartis official said the company is talking with the Korean government, but "nothing has been finalized."

While other drug firms did not voice optimism about talks with Korean government officials, Baxter said "progress is being made."

"Nothing has been finalized, but talks with the Korean government are going well without any big disagreements," Baxter said.

Baxter said Aug. 5 it completed its first commercial batches of H1N1 vaccine in late July and is discussing distribution plans with national health authorities. The swine flu vaccine, to be sold under the brand name Celvapan , is made using Vero cell culture technology, which it says is designed to be faster than traditional vaccine production methods.

Baxter has supply contracts with five countries, including the U.K., Ireland and New Zealand.

Local Vaccine Discount

Some industry sources said the health ministry will eventually buy Green Cross vaccines at around KRW7,000 while it ends up buying MNC products at around KRW13,000.

Green Cross started test production of its own A/H1N1 flu vaccine after receiving a virus strain from the UK's National Institution for Biological Standards and the U.S. Centers for Disease Control and Prevention (Also see "South Korea's Green Cross Begins "Test Production" of Flu Vaccine" - Scrip, 8 July, 2009.). After completing clinical trials, the company plans to market the vaccine in the Korean market beginning in 2010 - at the latest - after acquiring Korea FDA's approval.

With the talks with MNCs idle, the government is now calling on Green Cross to start production of the vaccines especially for pregnant women, soldiers and policemen, possibly beginning in November.

The Green Cross production plant opened in early July as part of government efforts - initiated in 2005 - to better fight various strains of flu by fostering domestic vaccine plants instead of relying on imported vaccines.

Alarmed over the deaths of two South Koreans infected with A/H1N1 virus and rising numbers of people infected, the government is moving to have the H1N1 test covered by the national health insurance system (Also see "Korea Moves To Cover A/H1N1 Test With National Health Insurance" - Scrip, 17 August, 2009.).

The government has stockpiled enough doses of Roche's Tamiflu (oseltamivir) and GSK's Relenza (zanamivir) for 5.3 million people, or 10 percent of the country's total population.

- Peter Chang (p.chang@elsevier.com)

South Korea Resumes A/H1N1 Vaccine Talks With GSK, Novartis, Sanofi-Aventis, Baxter, CSL

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