Dy­namic vac­cine mar­ket at­tracts more MNC in­vest­ment

BioSpectrum (Asia) - - Bio Contents - Source: BMI Re­search

The out­look for the Asia Pa­cific vac­cine mar­ket is favourable. In­deed, gov­ern­ments con­tinue to in­vest in im­mu­ni­sa­tion pro­grammes as vac­ci­na­tion cam­paigns rep­re­sent a cost-ef­fec­tive tool to im­prove pub­lic health. The ac­tive in­volve­ment of non-gov­ern­men­tal or­gan­i­sa­tions, such as GAVI, fur­ther fa­cil­i­tates ac­cess to vac­cines by mit­i­gat­ing some fi­nan­cial bar­ri­ers through co-fund­ing schemes. How­ever, rising com­pe­ti­tion from do­mes­tic vac­cine pro­duc­ers and a het­ero­ge­neous reg­u­la­tory en­vi­ron­ment that de­mands a coun­try spe­cific ap­proach do pose some chal­lenges to multi­na­tional drug­mak­ers.

The dy­namic Asia Pa­cific (APAC) vac­cine mar­ket holds sig­nif­i­cant com­mer­cial op­por­tu­ni­ties for phar­ma­ceu­ti­cal firms. Based on UN Com­trade data, Ja­pan im­ported the largest value of hu­man vac­cines for do­mes­tic use in 2015, amount­ing to USD36 9mn. This was fol­lowed by In­dia (USD30 3mn), Aus­tralia (USD28 7mn) and South Korea

(USD26 2mn).

As trade val­ues are re­ported in US dol­lar terms, we note that y-o-y cur­rency fluc­tu­a­tions are an im­por­tant fac­tor shap­ing the value im­ported.

Multi­na­tional drug­mak­ers are highly ac­tive in the APAC re­gion. For ex­am­ple, Glaxo Smith Kline (GSK) op­er­ates a global vac­cines pro­duc­tion fa­cil­ity in Sin­ga­pore and Merck & Co a phar­ma­ceu­ti­cal man­u­fac­tur­ing fa­cil­ity in Hang zhou, China, both of which sup­ply medicines and vac­cines to other coun­tries.

Sup­port for pub­lic health to be key

A fo­cus on im­mu­ni­sa­tion among the APAC re­gion’s gov­ern­ments will be a fun­da­men­tal fac­tor driv­ing the sale of vac­cines and re­flects a grow­ing ap­pre­ci­a­tion of the ben­e­fits of a strong pub­lic health pol­icy. We high­light that the strength­en­ing of na­tional im­mu­ni­sa­tion pro­grammes is not ex­clu­sive to de­vel­oped coun­tries such as Ja­pan, which has a rou­tine vac­ci­na­tion sched­ule, or in Sin­ga­pore, where there is a well-estab­lished Na­tional Child­hood Im­mu­ni­sa­tion pro­gramme. The Philip­pines, for ex­am­ple, has steadily in­creased the bud­get al­lo­cated for its Na­tional Im­mu­ni­sa­tion Pro­gramme (re­named from the Ex­panded Pro­gramme On Im­mu­ni­sa­tion in 20 16), rais­ing it from PHP316mn (USD6mn) in 2006 to PHP3,34 2mn (USD6 6mn) by 2015. In­deed, such pro­grammes are in­te­gral

to the com­mer­cial strate­gies of multi­na­tional drug mak­ers, par­tic­u­larly in APAC’s emerg ing mar­kets where the low pur­chas­ing power cre­ates fi­nan­cial bar­ri­ers.

Beyond the role of gov­ern­ments in APAC re­gion, in­ter­na­tional or­gan­i­sa­tions such as the WHO and UNICEF are also im­por­tant stake­hold­ers in the re­gion’s vac­cine mar­ket. In 2014, UNICEF helped to pro­cure im­mu­ni­sa­tion sup­plies on be­half of sev­eral As ian coun­tries such as In­dia (par­tial sched­ule) and Myan­mar (full sched­ule). Sim­i­larly, the Global Al­liance for Vac­cines and Im­mu­ni­sa­tion (Gavi) has pro­vided fund­ing that has sig­nif­i­cantly im­proved ac­cess to vac­cines in the re­gion. Ac­cord­ing to Gavi, its funds have helped im­mu­nise ap­prox­i­mately 50mn chil­dren in APAC with the pen­tava­lent vac­cine from 2001 to 2013. This rep­re­sents an op­por­tu­nity for multi­na­tional drug mak­ers to part­ner with such or­gan­i­sa­tions to help ex­pand the avail­abil­ity of vac­cines in the re­gion.

Vac­cine cost ef­fec­tive­ness key

We ex­pect vac­cines to be ac­tively em­ployed by both health of­fi­cials and non-gov­ern­men­tal or­gan­i­sa­tions go­ing for­ward due to their cost ef­fec­tive­ness in al­le­vi­at­ing the dis­ease bur­den. Re­searchers in a cost-ben­e­fit study of GSK’s Ro­tarix (ro­tavirus vac­cine) in Viet­nam noted that the treat­ment should be clas­si­fied as very cost-ef­fec­tive as it al­lowed the health­care sys­tem to re­duce one dis abil­ity-ad­justed life year (DALY) lost for ev­ery USD540 spent. A more re­cent study analysing the cost ef­fec­tive­ness of a uni­ver­sal in­fant ro­tavirus vac­ci­na­tion strat­egy in China drew sim­i­lar con­clu­sions. Based on the anal­y­sis, pa­tients in the ro­tavirus vac­ci­na­tion and Merck & Co’s Ro­tateq (ro­tavirus vac­cine, live, oral pen­tavalaent) groups had to pay CNY3,760 (USD540) and CNY7,578 (USD1,090), re­spec­tively to avert one DALY. This was an amount re­searchers noted was highly cost-ef­fec­tive when com­pared to the non­va­c­ci­nated group.

Asia-based firms present com­pet­i­tive threat

Given the de­mand for vac­cines in the APAC re­gion and the cor­re­spond­ing com­mer­cial re­wards, do­mes­tic phar­ma­ceu­ti­cal firms will be in­cen­tivised to com­pete for mar­ket share. Crit­i­cally, the com­pet­i­tive land­scape can of­ten be skewed in favour of lo­cal firms as gov­ern­ments seek to de­velop their phar­ma­ceu­ti­cal sec­tor and es­tab­lish greater self-suf­fi­ciency. In Viet­nam, the coun­try’s 2020 strat­egy is to have lo­cal pro­duc­tion sup­ply 100 per cent of do­mes­tic de­mand. This has prompted the Viet­namese gov­ern­ment to ac­tively in­clude lo­cally pro­duced vac­cines into its Ex­panded Pro­gramme on Im­mu­ni­sa­tion, the lat­est to be in­tro­duced be­ing a measles -rubella vac­cine pro­duced by the Min­istry of Health’s Cen­tre for Re­search and Pro­duc­tion of Vac­cines (POLYVAC).

reg­u­la­tory land­scape to con­tinue to evolve

MNCs will also have to nav­i­gate a highly di­verse reg­u­la­tory en­vi­ron­ment in APAC. The drug ap­proval process, for ex­am­ple, varies greatly across the re­gion’s mar­kets both in terms of the path­ways avail­able and the time­frame. Ex­em­pli­fy­ing this, while Hong Kong has two main drug ap­proval path­ways, In­done­sia has six drug cat­e­gories. Sanofi’s ex­pe­ri­ence seek­ing reg­u­la­tory ap­proval for Deng­vaxia (dengue vac­cine) in South East Asia is in­struc­tive in the chal­lenges that vac­cine pro­duc­ers face in their pur­suit of reg­u­la­tory ap­proval. While the Philip­pines was the first to ap­prove the vac­cine in De­cem­ber 2015, the firm has yet to re­ceive ap­proval in Malaysia as of De­cem­ber 2016, with Min­is­ter of Health S. Subra­ma­niam cit­ing a lack of in­for­ma­tion on its ef­fec­tive­ness in pa­tients aged 18 and older. The level of in­tel­lec­tual prop­erty pro­tec­tion, while im­prov­ing in sev­eral APAC mar­kets, re­mains low, par­tic­u­larly in mar­kets such as In­dia. In March 2016, Médecins Sans Fron­tières (MSF) was able to file a pre-grant op­po­si­tion to pre­vent Pfizer from patent­ing Preve­nar 13 (pneu­mo­coc­cal con­jug ate vac­cines).

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