Prevention is better than doctor." It seems that this phrase has replaced the traditional one - "Prevention is better than cure." And when it comes to impede any ailment, vaccination is the first thing that strikes in our mind.
The biggest factor driving the vaccine market is its potential to prevent deaths due to diseases. Vaccines have eradicated many life threatening diseases. Also, several vaccines are in the pipeline, which may serve as future life saviours (particularly those for several types of cancers, which are expected to be launched around 2008).
Vaccine market is growing at the rate of 16.52 per cent and global vaccine market is expected to reach US $21.05 billion by 2010. Cancer vaccines will grow rapidly through 2010. Currently, paediatric vaccines occupy a higher market share but in future, this segment will lose its share to the adult, therapeutic and influenza vaccine segments. Flu vaccines have huge demand at present and all major vaccine manufacturers are investing in this segment. The global vaccine market, with its desire to reduce costs and time to market, is likely to drive the global drug discovery clinical research organisation (CRO) market.
According to industry sources, the vaccines market in India will earn revenues of around $10 billion in 2012. The human vaccines segment is the fastest growing segment in this sector and prominent players include Serum Institute of India, Panacea Biotech, Indian Immunologicals, Aventis Pharma, GlaxoSmithKline, Shantha Biotechnics and others. Vaccine manufacturers like Serum Institute of India and Indian Immunologicals have very strong global presence. Serum exports its vaccines to more that 140 different countries worldwide, whereas Indian Immunologicals is the largest supplier for food and mouth disease.
In India, vaccines and recombinant therapeutics are the leading sectors driving the growth of biotechnology industry. A major share of revenue is generated through exports (accounting for almost 53 per cent), while domestic market generate the rest 47 per cent share of revenue.
With Indian companies increasingly consolidating their manufacturing and marketing capabilities, India has already achieved leadership position in the global vaccines market and is all set to grab the market opportunity in the global recombinant therapeutics market.
Why India lags behind?
The main reason is that Indian manufacturers restrict themselves to the low-end segments of the market. For instance, largest Indian vaccine player, Serum International, which manufactures about 675 million doses a year and GSK, which manufactures about 780 million doses, restricted themselves to the low-end segments of the market. Serum's turnover (including biogenerics) is a mere $110 million compared to GSK's vaccine turnover of $2 billion. In domestic market, the market share of Indian firms is insignificant compared to that of multinationals. Apart, Indian manufacturers failed to break into the lucrative markets in the developed world. They have no products in the categories that drive growth in these markets, like flu and travel vaccines, or a product similar to the enhanced paediatric vaccine of Wyeth Lederle's Prevanar, which sells at about $140 a dose. Also, no Indian vaccine manufacturer operates in the $3.5 billion US vaccines market.
Challenges for Indian players
Vaccines market in India is witnessing a lot of activity. But vaccines are not an easy market to tap. Challenges are aplenty. Some of the major challenges include:
● There is falling realisations for mass vaccines like Hepatitis B in the domestic market by vaccine manufacturers. This leaves the organisation with minimal funds to plough back in research for newer vaccines
● Funding becomes a big problem when it comes to new enterprises. However, today there are quite a few VC funds in the country, which are open to invest in this sector though it was not the case a few years back. Even after the initial funding, companies find it difficult to generate and utilise funds for expansion. Indian companies have performed exceptionally well in the domestic and the lesser regulated markets. However, funding opportunities for drug discovery plans is important to rise up the value chain
● Vaccines need high maintenance. They require complex infrastructure in place so that stockists and chemists in rural areas can store the products at the required temperature, which generally ranges between 2 and 8°C. Vaccine R&D too requires high payoffs making it a complicated field to enter. Also, vaccines can only be launched after a huge human trial, which is expensive. Hence, the vaccine market can be taken as a 'spend more earn less' project
● Though regulatory approval process has improved a lot, further speeding it up is the need of the hour. This can be possible only if the single window clearance system is implemented
● The domestic Indian companies depend on government procurement to push volumes. This has its own timelines and guidelines. Thus, fallout of this is the immunisation programme that is undertaken by governments all over the world
Making the right move
Vaccines are a volume game with profits in numbers, i.e., where there are lesser margins there is volumes. So, all the vaccine manufacturers aim to get their vaccine listed as part of the immunisationplan to leverage the volume play.
Next favourite choice of vaccine makers is the export market. Export is significant for vaccine manufacturers, as they ensure a steady flow of revenue which can be reinvested in other efforts. Even domestic vaccine market is attractive in terms of growth. It is more than double the pharmaceutical industry growth rate. Moreover, tremendous opportunities exist for launch of newer vaccines like rotavirus, IPV and DTP.
Vaccine business is attractive as the domestic biopharmaceutical segment contributes to 75 per cent of the total biotechnology market, wherein, vaccines alone contribute 47 per cent of it.
India enjoys the advantages of early initial successes in vaccine R&D and indigenous production in the public sector. But the stark reality is that the country is unable to cope with the growing gap in the demand and supply of universal immunisationprogramme (UIP) vaccines. Therefore, India must evolve its own national strategies to meet its vaccination needs within its budgetary constraints. Four key actions are required for this. They are:
● There should be decisive intervention of the Indian government to meet the shortfall in the UIP vaccines. This may be done either by strengthening the public sector wherever possible, or by taking suitable measures to encourage the indigenous private sector on a case-by-case basis to make safe and effective vaccines at affordable prices. The suitability of foreign vaccines to deal with Indian pathogenic strains also needs to be conclusively established if necessary. With a strong will and a small amount of planning, the current situation in India can be reversed. This will enable India to play a major role in meeting the global shortfall in the vaccines procured by UNICEF
● India needs to strengthen epidemiology and revive the collapsing disease surveillance system. This would help to decide between universal and selective immunisation based on unequivocal scientific evidence, as well as to respond to the changing disease prevalence scenario, which may call for a move from universal to selective immunisation or vice versa
● There is a need for high quality in-house R&D in order to ensure that our production technologies are coping with the times and to negotiate strategic partnerships with outside scientists or institutions and companies
● The Indian government should actively encourage independent policy research, cost-benefit studies and wider national consultations on various aspects of vaccination and public health. So that it can take more informed decisions on such matters
Partnering trend
The new trend is that vaccine makers are partnering for drug discovery and co-development of newer vaccines.
Bharat Biotech International: It has partnered with US-based Novavax to develop avian influenza vaccine for India and other developing countries in South East Asia. This ascendancy is in close association with the Department of Biotechnology (DBT) and will therefore be a significant step in the public-private partnership development in public interest.
Serum Institute of India: The company supplies vaccines to over 140 countries across the world and has been partnering with Chiron for development of a meningitis vaccine. It also has tied-up with Gates Foundation and PATH for accessing testing technology at international level for developing pneumococcal vaccine.
Shantha Biotechnics. The company is developing cholera and typhoid vaccines in co-operation with International Vaccine Institute of Korea, and rotavirus in conjunction with NIH. Shantha is also planning vaccines for rotavirus and varicella zoster. They are working on measles and its combinations, meningiococcal vaccines, rotavirus, IPV, HPV, rabies and Japanese encephalitis.
The Bill and Melinda Gates Foundation: It has pledged financial assistance and support for development of vaccines for diseases like malaria, HPV, Hepatitis B and pneumococcus. ICMR in India is already supporting development of two types of vaccines for HIV/AIDS, one undergoing clinical trials in Chennai and another one at NARI, Pune.
Apart, numerous new generation vaccines are under development in close co-operation with premier research institutes like the National Institute of Cholera and Enteric Diseases, Kolkata, National Institute of Immunology, Jawaharlal Nehru University and All India Institute of Medical Sciences (all in New Delhi), Central Drug Research Institute, Lucknow, Institute of Microbial Technology, Chandigarh, Indian Institute of Science Bangalore, Center for DNA Fingerprinting and Diagnostics, Hyderabad and National AIDS Research Institute and National Institute of Virology, Pune.
Future window
The vaccines market will witness a boom in the coming years with support from government agencies and a number of funding opportunities. For instance, the Technology Development Board (TDB) is the first organisation to encourage commercial enterprises to take up technology driven projects. It offers soft loans to enterprises for commercialising innovative indigenous technologies and adapting imported technologies to Indian conditions. Production of recombinant Hepatitis C viral antigens by the Hyderabad-based Sudarshan Biotech and pentavalent vaccine (DPT + Hib + Hep B) by Shantha Biotech are two projects to exemplify.
Though vaccines represent a crowded market, there is a way ahead in terms of new generation combination vaccines. Combination vaccines hold prodigious opportunity for Indian manufacturers, as they possess inherent advantages in terms of low delivery cost and single dose administration. Also vaccines for illness, which are common in our part of the world like flu, dengue, rotavirus, cholera and Japanese encephalitis, make way for an opportunity. There is also scope in improving commonly available vaccines like acellular pertussis instead of whole cell pertussis in DTP and injectible polio virus instead of OPV.
(The author is with Accure Labs Pvt. Ltd, Noida)