GlaxoSmithKline (GSK), which is not a manufacturer of a Covid vaccine and thus did not benefit from Covid vaccine sales, recently announced second quarter 2022 results that surpassed expectations. This has enabled an upward adjustment in the profit forecast for the full year 2022. The Telegraph reported that GSK shares are up 44% from last spring.
Sales of GSK’s shingles vaccine, Shingrix, was the main driver of growth. Shingrix sales more than doubled in the second quarter, being April to June 2022, pushing up total GSK sales by 13%.
Shingrix is a relatively new shingles vaccine that my doctor tells me is considered an improvement on Zostervax, the traditional shingles vaccine. However, Shingrix is not cheap. A two dose course in Hong Kong costs £600, in the U.K. £440 and in the U.S. around $300. Allowing for distributor and retail margins, I estimate that GSK’s income would be about one third of the retail price. Let’s assume therefore that GSK earns £150 per two dose course on a worldwide average basis.
According to GSK, sales of Shingrix doubled to £731M, an increase of £366M in one fiscal quarter. At £150 per course, this equates to an unexpected increase in sales and thus vaccine recipients in one fiscal quarter of 2.4 million from the expected quarterly run rate.
When asked the reason for this surprising jump in Shingrix sales, GSK’s CEO stated: “It comes after countries started to shift their focus away from Covid towards other jab campaigns.”
Nobody seems to have questioned this statement. In the period in question, April to June 2022, Covid vaccine programmes were still highly active and indeed many programmes across the world were on to their third or fourth booster.
Though extremely painful, shingles is not life threatening and generally affects people over 50. It affects persons who have previously had chickenpox, often in their childhood, and is triggered mainly by overwork, lack of sleep or similar stress-related reasons. Shingles attacks the nervous system, especially nerve endings, and hence is often intensely painful.
Vaccination against shingles is not routinely given to all over-50s in most countries. Despite this, according to GSK, in the middle of a continuing Covid campaign, countries opted to shift their focus to vaccinating against shingles?
Is this likely? If indeed there was a shift to more usual vaccination programmes, would vaccination against shingles have been prioritised? Additionally, given the cost of this vaccine, and weighing up the public benefit, would most countries or patients really switch to Shingrix from the much cheaper Zostervax?
All of this seems unlikely. So what has driven a 50% increase in sales of a very expensive vaccine not part of the usual standard vaccination programme?
Further, taking the USA as an example, the ratio of Shingrix to Zostervax sales is 50-50. In most other countries, Shingrix has less than 50% of the market. If 2.4 million people in one quarter had the Shingrix vaccine, how many more had Zostervax? It is not inconceivable that some 5 million more people than usual were vaccinated against shingles in one quarter.