Vaccines can play a larger role in the overall growth strategy of Indian drug makers across the globe, if the Indian firms are encouraged to give more thrust on R & D activities with government support and with more investments flowing in from overseas.
If medicinal drugs are for curing the already existing diseases, vaccines are the preventive biologics that impacts the human immune system and gives it the strength to defend the body against ailments. Already India is manufacturing a variety of drugs, vaccines and diagnostic tests. Despite the global economic recession and stringent regulatory reforms in various nations across the world, India’s stature as an affordable quality vaccine manufacturer is growing day by day. Today India is known as the world’s largest manufacturer of affordable vaccines.
India currently produces about 60 per cent of the global health vaccines. The country had already earned revenue of $ 665 million in this space in 2011 and is expected to reach $900 million in the coming years. Indian vaccine units are known for world-class manufacturing and have earned one of the surest seals of quality for any health product: the WHO "pre-qualified" tag for production.
Of late India has also emerged as a key bulk vaccine manufacturer and is know as major supplier of affordable quality vaccines. In fact one in every three doses of vaccines used in the world is produced in India. Majority of Indian firms supply different kinds of vaccines to the UN agencies. Besides mass-manufacture of vaccines, Indian vaccine makers have also succeeded in creating a whole new range of vaccines indigenously.
The major factors that are responsible for the growth of vaccine industry can be attributed to the growing fear and increasing burden of diseases caused by avian influenza, bio-terrorism organisms. The new emerging infections like SARS and the introduction of cancer and rotavirus vaccines have also led to phenomenal growth in the last few years.
In fact vaccines are important to the world today because these are the only preventive measure for children from diseases whether the child is rich, poor, rural or urban. There are 24 million children born every year in India. It is important that state and central governments should make it compulsory to deliver vaccines to ease the burden of diseases and healthcare costs in the future.
The endeavour of central and state governments’ huge vaccination campaigns to eradicate polio during the past one decade and have proved successful. The public and private have played a crucial role in providing vaccines to the large- scale state run public healthcare schemes.
Of the total domestic market, the private sector’s share is set at $120 million which accounts to 40 per cent. Top vaccine manufacturers have a reasonably diverse product portfolio which has led to reduced competition in the Indian market. The Indian market includes foreign majors like GSK, Sanofi, Eli Lily, and Merck to name a few.
Venturing into vaccines production, many entrepreneurs in the country have already invested huge capital and have established state of art manufacturing facilities in Hyderabad, Chennai, Bangalore, Ahmedabad and other parts of the country. India’s vaccine R&D capacity is growing and is now poised to make major contributions to the development of needed new vaccines.
Initially the Indian vaccine industry had begun as a network of state-owned manufacturers supplying basic childhood vaccines to the national immunization programme. In recent decades, a number of privately -owned firms have grown rapidly, developed the capacity to produce more sophisticated vaccines, and become important suppliers to other low and middle-income countries, in particular through UNICEF (United Nations International Children's Emergency Fund) and the Pan American Health Organization. Total revenues of India’s vaccine companies have reached about $500 million in the year 2009-2010 and were projected to grow at more than 20 per cent per year.
Though India has optimistic growth potentials in vaccine segment, its pace of growth is slow due to limited domestic markets and small players when compared to western players in the US and Europe. The vaccine manufactures in these countries are not only big but also enjoy larger markets which give them scope for faster growth. For instance GlaxoSmithKline, the largest international vaccine manufacturer in the world alone earned more than $ six billion from its vaccines business in the year 2010.
Today India produces most affordable and quality vaccines and most of it is being exported to unregulated markets. Exports account for more than 40 per cent of the Indian vaccine industry’s sales. Unlike the drug manufacturing firms in the country, vaccine manufacturing companies have not yet gained access to the US and European markets and remain largely focused on public-sector and UN (United Nations) markets in low- and middle-income countries.
“Unlike the bulk drugs the vaccine industry is totally a different ball game and it is more capital- intensive segment with no immediate returns. Except a few big firms, not many are keen to invest in the R & D because they are apprehensive as they fear the expected returns many not come due to longer gestation period. To develop a vaccine it takes more than 5-7 years and some times it may also take more than 10 years. Nobody is willing to wait for such a long time as the interest on their investment goes up and the returns may not be as expected due to heavy competition,” said Krishna M. Ella, CMD Bharat Biotech when asked about scope for new investments in vaccine segment in India.
For India to grow rapidly, Ella suggested that the state and central government should come forward and encourage the small and medium scale entrepreneurs to take up research. If government supports by way of giving loans and subsidies to SME segment to do research in vaccines, then India will definitely become the global hub for vaccine manufacturing in the world, he added.
Though vaccine development is an arduous and lengthy process, speedy development has been a hallmark of the new vaccine industry in India. Recently , the response to a crisis for Japanese Encephalitis and H1N1 flu - with an Indian firm taking just a couple of years to develop it is a significant achievement. This has also encouraged the firm to speed up the process of developing vaccines which otherwise takes years.
Even against all odds, leading firms have shown considerable growth in R&D. They have moved from process development and incremental innovation in combinations and formulations to the development of new vaccines and have developed expertise in recombinant technology. Across the industry, many new vaccines against rotavirus, Japanese encephalitis, typhoid fever, malaria, rabies, and influenza are in clinical development stage.
On the whole the Indian vaccine market is estimated beyond $900 million in the coming years with a growth rate of around 23 per cent. In the next five years, the industry is expected to cross $ 4.6 billion with a CAGR of 10-13 per cent. With a number of important vaccines in the pipeline, the market is expected to explode globally. Vaccines are expected to grow faster than any other therapies.
Recognizing India as a model for the global vaccine market, the Biotechnology Industry Organization (BIO) had organized an international programme to highlight India's achievement in this field. Last year an international conference BIO was held in India to discuss the opportunities and challenges in this sector.
As India had already achieved success in manufacturing affordable and cost effective vaccines, the events like BIO have given a platform for the Indian entrepreneurs to explore more opportunities and overcome challenges by forming business ventures and MoUs with the western companies and learn from them with mutual cooperation.
“Events like BIO India have really given an opportunity to the world to understand India’s intellectual caliber as it has highlighted the growth story of India vaccine makers and their ability to make high-quality vaccines available at affordable prices and present opportunities for Western companies seeking to do business within India’s borders,” said Alan Eisenberg, Executive Vice President of Emerging Companies and Business Development at BIO.
Dr. Cyrus Poonawalla, Founder, Chairman, and Managing Director, Serum Institute of India Ltd gave insights and discussed vaccine development in India. He said India had become the role model for the world in the development of affordable vaccines. According to him, one out of every two children immunized worldwide receives a vaccine produced by the Serum Institute.
The BIO Conference in India was aimed at helping the vaccine industry to flourish not only in India but also help patients and citizens benefit from the promise of biotech. International events like BIO had really brought in years of experience and expertise in biotechnology and pharmaceutical partnering. Currently BIO represents more than 1,100 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations.