A Shot of India: The Vaccine Market
This might prove detrimental to Indian companies. There is a likelihood of an increase in regulatory scrutiny of vaccines from India after this disqualification, says Anantharaman Kavassery Viswanathan, market research company Datamonitor’s lead healthcare analyst in India. This, along with the increasing manpower cost in India, might work to the advantage of Chinese vaccine manufacturers for getting their vaccines pre-qualified, he cautions. Chinese products are exerting pricing pressure in the domestic market as well. “While Indian companies can’t sell a single vial in China, Chinese vaccines are sold here without any quality control,” says Krishna M. Ella, chairman and managing director of Bharat Biotech, another Hyderabad-based company that is speculated to be a buyout candidate every now and then. But Ella, a scientist-turned-entrepreneur, says he’s aggressively pursuing new technologies and “cashing out” at this stage is out of the question. 
Between 2008 and 2010, primarily driven by new product launches, Bharat Biotech’s revenue grew more than threefold to Rs. 272 crore (according to the latest BioSpectrum-ABLE industry report). A good show, but Ella thinks the current “cannibalisation” among Indian companies, as they all go after the same set of vaccines, is killing value. To address that, he recently set up the National Vaccine Manufacturers Association and serves as its founding president. He is trying to persuade the three public sector units — Pasteur Institute in Coonoor in Tamil Nadu, Indian Immunologicals in Hyderabad, and the Central Research Institute in Kasauli, Himachal Pradesh — to join the association, but they are reluctant.
Ella is exasperated: “Don’t public sector units need to make money, invest in R&D and drive new products?”
Primitive Policies
If China is supporting its local manufacturers by promoting their products in the national immunisation programmes, the South Korean government is going to the extent of financing equipment and providing leased land for facilities. Perhaps as a fall-out of the recent pandemic flu scares, good-quality vaccine-manufacturing facilities are seen as a health security. “There’s a new-found nationalism around it,” says Ella, who is exploring marketing opportunities in South Korea. In late 2009, Swiss pharma company Novartis opened a new flu vaccine facility in North Carolina, US, that will go into full commercial production in 2013 and is supported by the US health and services department. In India, says Ella, private companies don’t want any financial help, only strategic support through policy.
That sounds pragmatic for an industry that recorded Rs. 2,180 crore in sales in 2010 but has potential for much more, as India limps behind countries like Pakistan and Bangladesh in vaccine penetration. On that account, says Rajesh Jain, joint managing director of Panacea Biotec, the Indian vaccine policy is nothing short of “primitive”. Even as the rest of the world, including organisations like the UNICEF and WHO, follows a two to three year procurement cycle, the Indian Ministry of Health and Family Welfare doesn’t even have an annual cycle. There’s no co-ordination between demand forecasting and procurement.
“The new financial year has begun but no manufacturer has been informed about the likely demand; there’s no tender allotment yet,” says Poonawalla. Since vaccines take six to eight months to produce, short procurement notices create artificial shortages in the market. A pertinent example, says Ella, is the recent shortage of typhoid vaccine that the health department brought to public notice. “Bharat Biotech is the largest producer of typhoid vaccine in the world. Do you think we can’t serve the local market? But our health authorities don’t even know what their own companies can produce,” he says.
Former health secretary K. Sujatha Rao wanted to develop a two-year procurement cycle but before she could implement anything, her term got over, says K.V. Balasubramaniam, managing director of Indian Immunologicals, a subsidiary of the National Dairy Development Board. Due to national commitment, his company can’t export even a single dose if there’s any shortage in the country. And the skewed procurement policy makes sure that there’s perennial shortage.
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Either Mr Balasubramaniam is ill informed or doesn't want to face the fact that there are 2 IPV brands available in India which can easily be included in d national immunization program replacing OPV, provided d government agrees.
