Potential Mandatory Vaccination May Prove Healthy For Merck, GlaxoSmithKline

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Includes: GSK, MRK
by: Saul Sterman

An article appearing in the L.A. Times reports on the growing controversy over the proposed mandatory vaccination of all teenage girls against cervical cancer. The two manufacturers of the vaccine are Merck (NYSE:MRK) and GlaxoSmithKline (NYSE:GSK). At a cost of over $300 per recipient (3 x 100/120), should mandatory vaccination take hold in the U.S. and elsewhere, the two could realize revenue in excess of $250M a year each, until others develop competitive products.

HPV research was funded in part by a grant from the Bill and Melinda Gates Foundation. I am not sure that Bill Gates had mandatory immunization in mind. Since we are talking about an item that is perceived by some to promote sexual promiscuity amongst teenage girls, objection is plentiful. The ‘not my daughter’ blocs’ objections resonate the all too familiar opposition theme used when introducing condoms into high schools. We all know how that one ended.

This time around it may not be so simple to push this one through. Though the LA Unified School District already offers the vaccine at its clinics and will be providing 45,000 additional doses this month, it will take at least two decades before there is undisputed scientific evidence to confirm the vaccination’s effectiveness in reducing mortality rates. Don’t expect MRK and GSK to wait twenty years. They both have too much riding on this one.

MRK/GLX 1-yr comparison chart
MRK GSK