Indian Vaccine Industry - more vibrant in coming years Dr K V BALASUBRAMANIAM, Former Managing Director - Indian Immunologicals Ltd and Strategic Management and Life Sciences Consultant
With a + 7 per cent economic growth, India now leads the world ranking on a major economic indicator viz. economic growth. However, India has to still emerge out of debilitating poverty which affects a large number of its people and also significantly improve the quality of life of most of its people. Pulling the vast number of Indians out of poverty calls not just for higher economic growth with equity and equality, but also access to good healthcare, improved sanitation and better quality of the environment. On the healthcare side, India accounts for a major portion of the world population suffering from communicable and non-communicable diseases. Much of modern health care is neither accessible nor affordable by most Indians. Even where available, there are several health delivery issues to be dealt with. The Indian vaccine industry works in this setting, which makes affordability and accessibility paramount for preventive health care. The Indian Vaccine Industry The importance of the Indian vaccine industry can be gauged by the fact that it supports a massive Universal immunization programme of the Government of India and preventive health care programmes of State Governments, by supplying about 1 billion doses of 12 important human vaccines. In addition, thanks to its ability to make high quality vaccines at affordable prices, the Industry exports over 0.7 billion doses of human vaccines largely to the Global Alliance for Vaccines and Immunization (GAVI) supported United Nations Childrens' Education Fund (UNICEF)'s Global immunization programme in the developing and least developing countries. A number of other vaccines are sold in the private trade, which though do not add up in terms of volumes, account for significant value of Rs 2000 crore. With sales revenues from institutions pegged at Rs 800 crore, the domestic human vaccine industry generates revenues of about Rs 2800 crore. Not to be left behind, the animal vaccine segment of this industry also supports large livestock vaccination programmes of the State Governments, by supplying about 0.5 billion doses of 7 important animal vaccines. India is home to a large livestock population and its significant agrarian economy is still dependent on livestock for much of stable, rural income. The animal vaccine segment generates sales revenues of about Rs 800 crore. Thus collectively, the Indian vaccine industry supplies about 1.5 billion doses, of both human and animal vaccines, of value Rs 3600 crore to the domestic market. Adding exports of Rs 3100 crore, the industry generates sales revenues of Rs 6700 crore. It is also growing at a healthy rate of 10 per cent p.a. This is no small achievement considering that manufacture of vaccines requires the highest level of life science technologies to be deployed, an extensive range of testing for safety and efficacy; and achieving low costs through high scales of operations. Several Indian vaccine companies are World Health Organization (WHO) pre-qualified for their manufacturing sites. They are also partnering with international agencies in the development of new vaccines for diseases affecting the developing and least developed countries. No wonder that Indian vaccine industry stands counted as a prominent group in the global vaccine industry with its Unique Selling Proposition (USP) of quality, affordability and reliability. Immunization in India However, ironically India has still a long way to go to achieve total immunization of its children and in protecting them against major diseases. Polio has only recently been eradicated in India and among the last few countries to do so. Some recent field incidents concerning polio did cause some scare but fortunately, a good surveillance mechanism and pre-emptive action addressed the issue. Notwithstanding this, India still has several adverse field events, not so much due to the quality of the vaccines, but due to poor immunization practices by an over-burdened immunization workforce dependent on an ageing and weak health infrastructure for immunization. The present immunization coverage rate in India stands at 89 per cent, however with a wide disparity in coverage since 37 per cent of the districts have immunization less than 8o%. This is much lower when compared to other developing countries such as Srilanka or Thailand which have 99 per cent coverage. The number of diseases covered in primary immunization in India was until a few years ago only 7 (for BCG, Polio, DTP, Hep B and Hib) and this has now increased to 10 (Japanese Encephalitis, Rotavirus and Rubella added) thanks to the Indradhanush initiative of the Government. Compared to over 14 diseases (plus Influenza, Varicella, Rubella, Pneumonia) covered by the developed countries for immunization of their children, means that disease coverage in India has to still improve. Therefore, while it may feel good to have a vibrant vaccine industry earning laurels at the global level, the vibrancy must be matched by serious concern about the state of immunization and must result in positive efforts by the Government to improve both immunization and disease coverage. Challenges The Indian vaccine industry is faced with several macro and micro level challenges, which are briefly described below. India suffers from inadequatedata on disease burden in order to take prudent decisions about diseases to be covered in its immunization programmes. As a result, the Government is often criticized that decisions on vaccines to be included in the immunization programmes are dictated by the industry and are not considered decisions by immunization experts. For example, why would Hib take priority over rubella in the immunization programme considering that rubella is a serious disease particularly causing congenital rubella syndrome (CRS) in infants and is considered more important than Hib to be addressed? Immunization coverage in India is also lower among developing countries due to low public awareness on the value of vaccination and lack of wholehearted involvement of people in immunization drives undertaken by the Government. Low appreciation of the value of vaccines is particularly acute in the animal vaccines market. To compound this, periodic adverse events affects trust that people repose in vaccines. Effective communication to overcome this, both by the industry and the Government, is inadequate. In India's federal structure the States carry out immunization, while funding of immunization programmes is largely met by the Central Govt. For a developing country like India with a multitude of demands on Government for health interventions, this imposes limitations on the budgets for immunization. This also directly affects uptake of vaccines and in achieving effectiveness of immunization. Vaccines must be stored and transported at low temperatures. In a tropical country like India, with poor transport networks in some major regions, this is a serious challenge. It is only of late that much emphasis is being placed on creating a proper transport network and vaccine storage infrastructure in the country. It will be a while before this significantly improves. Till then, the cost of logistics in the vaccine business will continue to be challenging. Development of new vaccines is largely left to the private sector. The steps taken by the various government agencies to fund new vaccine development have not had much material effect in terms of bringing to the market new vaccines relevant to our country. Sustained efforts in the development of vaccines even for diseases like Japanese encephalitis, Chikungunya or Swine fever, which periodically plague some parts of the country, are not high priority for the private sector as they do not pay off commercially. Besides, the eco system in biotechnology is not mature to support new basic research which is direly needed for new vaccine development. For vaccines not covered by the Government, spending is by private savings of citizens. However, the vaccines sold in the private market (for Rabies, Typhoid, Influenza, Pneumonia, Hepatitis A, Chicken pox, HPV and combination vaccines) are largely from the stable of multi-national companies. They are expensive and only serve the more affluent people in the metros and major non-metro cities. It is ironical that although the vaccines sold by multinational companies are solely to the private market and not to the government programmes, they yet account for nearly 5o% of the sales revenues in the domestic market. Therefore, there is need to pursue the objective of making vaccines affordable to the larger population. The regulatory environment in India for biopharmaceuticals in general and vaccines in particular, has seen significant changes in the recent past. This makes regulatory approvals for vaccines arduous, time consuming and costly. As a result, interest of the private sector for development of vaccines for orphan diseases remains very muted since there is no commensurate commercial payoff. This is also a challenge to keep the present cost competitiveness alive in the face of higher regulatory demands. Opportunities It is said that when the going gets tough, the tough get going! The Indian vaccine industry has, thanks to its international exposure, technology development partnerships and access to a large domestic market, been able to progressively develop capabilities in applied research and vaccine development. As a result, it is now well placed to harness new opportunities in the emerging vaccine space. In the following paragraphs, a few important challenges are described. It is expected that a large private market will emerge for vaccines in India. The Rs 2000 crore private domestic human vaccines market today accounts for only 7 per cent of the market by volume but 70 per cent of the market by value. Both on account of the growth in the economy and due to targeted Government programmes to reduce rural poverty and improve standard of living, it is expected that the vaccine industry will benefit in good measure. The opportunity will be for vaccines which are not in the Universal Immunization Programme (UIP) basket, viz. Rabies, Typhoid, Influenza, Pneumonia, Hepatitis A, Chicken pox, Human papilloma virus and combination vaccines, and sold in the private market. More indigenous market offerings by domestic players can be expected. However, it must be stated that keeping these vaccines affordable can help improve market penetration. The opportunities for exports will continue, especially to the GAVI/UNICEF procurement programmes for immunization in the least developed countries. More Indian players are expected to meet the stringent WHO Pre-qualification requirements for even more number of vaccines. This would help increase the revenues and profitability of the industry. On the technology side, since newer vaccines are based more on recombinant DNA technologies, it can be expected that companies will focus more on building such technology capabilities. This can have spin offs in terms of development of other bio-therapeutic products. This will be a logical extension to the human therapeutic market for the Indian vaccine industry. Summary In summary, it can be stated that while the Indian vaccine industry is beset with numerous challenges-often faced by growing industries, there are significant opportunities for growth with more depth in the domestic market, more breadth in product offerings and from progressively higher technology capabilities. The industry can thus be expected to be even more vibrant in the coming years.