‘GOVERNMENT REFORMS WILL HELP GROWTH OF INDIAN VACCINE SECTOR’
As the world’s largest vaccine manufacturer, Serum Institute of India now supplies to 170 countries having strengthened its reach and capability after the acquisition of a Netherlands firm. Continuing regulatory reforms will help promote growth among vaccine manufacturers, says the company’s Executive Director Dr. Suresh Jadhav in an exclusive interview to Bio Spectrum
What are the latest developments at Serum Institute in terms of new product development and launches in the offing?
We will be launching at least three – four products. Just about a month back we got the marketing authorisation and licences for manufacturing of Vero Cell Rabies Vaccine and Rabies Monoclonal antibody. The rabies monoclonal antibody will be launched for the first time in the world. We had received this technology almost 7-8 years back from MBL- Massachusetts Biological Laboratory, Boston. We developed it and they have the right to sell the product in the US and we can sell it in the rest of the world. Very shortly, we expect to get our licence. We have already got the marketing authorisation for the rotavirus vaccine. This vaccine will be a game-changer as far as the introduction in tropics is concerned. This is an extremely stable vaccine and can stay at room temperature without any cold chain.
That will be a great boon especially for countries in Africa and some of the countries in southeast Asia where we have power disruptions.
These are the three major launches in the offing. The others will follow but they are at various stages of clinical trials. We are working on pneumococcal vaccine which is completing phase two studies. Once we submit that data to DCGI, we will expect permission to start phase-3. We have also got permission to start our phase-1 clinical trial for human papillomavirus (HPV) vacine. Recently we got permission to start phase-1 studies for diphtheria-tetanus-acellular pertussis (DTAP). Things are moving.
How is Serum Institute placed today in terms of the global vaccine market?
Globally we are supplying to 170 countries today. Till last year or two years back, it was 150 countries because we were supplying products only from Serum Institute in Pune. But after we took over a facility in Netherlands (Bilthoven Biologicals) which manufactures only two products - polio and BCG for the treatment of bladder cancer, the number went up to over 170 countries as they also supply to about 20 countries. So as the Cyrus Poonawalla group, we supply to over 170 countries now. In that our major buyers are the UN agencies- UNICEF in Copenhagen and PAHO (Pan American Health Organisation) in Washington. PAHO is a purchasing agency for vaccines for South America and South Pacific rim countries. We are supplying almost 95 per cent of the requirement there for some of our vaccines such as measles containing vaccine. There is no other manufacturer who is qualified so far for supplying MMR vaccines.
I would attribute this global presence of Serum Institute to research, development, circumstances and luck. But majorly because of the vision of Dr. Cyrus Poonawalla.
One great thing about Serum Institute is the low price and affordability of the product. This is appreciated by many in the healthcare sector.
That is our USP. Dr Poonawalla always felt that if you have to make products affordable, you have to have certain volumes. And only when you achieve those volumes can you give lower prices and maintain them. Like for example, when we got licence for measles, we qualified, and started supplying to UN agencies in 1994, I think we were supplying to them at a price of $1.10. That means 11 cents a dose. We maintained that price - 11 or 11.5 cents for 10 years. We did not change the price till 2004. That was possible because every year the demand was increasing and we could produce additional quantities from the same facility which could take care of inflation. It was only in 2004 when the demand really increased or we got such an indication that we constructed a new facility. So when a new facility is constructed like the current GMP (good manufacturing practice), then of course that investment has to be factored in the price at which you are selling. So we increased the price by another 10 per cent at that time. You don’t get kudos for maintaining price for 10 years but you get flak for increasing it
by 10 per cent!
How does Serum Institute view its position in the domestic market?
We are the largest supplier in the private market, there is no doubt about that. Except for the last two years when the pentavalent vaccine tender went to another company because of the Government of India’s policy of allotting everything to the lowest bidder. It’s not like in UN agencies, where even if there are 3 or 4 suppliers, they give orders of some small quantity to everybody to take care of the vaccine’s security. Because if something happens to the major supplier, then they have to depend on somebody else. Here if you don’t give to another supplier, he can’t keep things ready and maintain stocks . If the product is not used within its shelf life, it has to be destroyed.
What kind of government support would be required for Indian manufacturers to retain their position in the world?
About four years ago we had a situation when some PILs were launched by the anti-vaccine lobby and the government panicked. There were so many constraints. The government changed the rules and regulations. They added so many new licences, making them mandatory. For every licence there used to be so many different committees. Every time the members of the committees felt that if they don’t give you a suggestion, their membership on the committee is useless. So they gave suggestions irrespective of whether they were valid or invalid. That has delayed things substantially- specially for clinical trials companies were forced to go out of the country, to Africa, Malaysia, and other nations in Southeast Asia, but not in India. I think the government realised that and they are amending things slowly. Slowly, reforms are being put in place and in a short time, things will become better. I will not say easy because they are not compromising on quality, the process or the regulatory part, but some additional stringent measure which were unnecessarily delaying production and research in the country will be removed. I’m quite confident. We had some discussion with the DCGI and even the health secretary and they are quite supportive to help us on this.
Any expectations as a vaccine manufacturer from the forthcoming budget?
Certainly. I must say that after Prime Minister Narendra Modi took oath in 2014, in his very first speech from the Red Fort, he announced that he wanted to introduce four vaccines. I think that came as a shock to everybody, including the Health ministry because even they were not taken into confidence that he was going to make such an announcement. So that was the starting point. Slowly we see that they have introduced Rotavirus vaccine, they have planned to introduce pneumococcal vaccine programme and have already taken a decision to change over from the current measles to measles and rubella, a combined vaccination which will be introduced from the first quarter of 2017. We see these as excellent steps which were not happening in the past.
This will help improve the health profile of the country. In reality, India represents one-fifth of the world with a population of 1.3 billion-plus out of 6.7 or 6.8 billion global population. This has to be considered in any policy of the government or of UN agencies whether it is WHO or UNICEF; Gates Foundation, etc. They cannot ignore India in any plan they have for the health sector.
How is China placed in this scenario? When it comes to manufacturing, there is always this talk of China and the dominant position that it has. How do you look at China in the vaccine market and the vaccine space?
In the past we were extremely worried about China only because of what they did in the bulk drug sector. They have a large number of small-scale and largescale industries . They distinctly manufacture different qualities― one manufacturer complies with the US requirement, one complies for general market, one with some little sector in between and that’s why they could play with pricing. They have played havoc by supplying globally at a very low price. The industry was getting complete support from their government. The government was encouraging the industry to export and making good their losses. Such support has not come from the Indian government.
On the vaccine front, they have two distinct sectors― the public sector and the private sector. In the public sector they have state units which are located in 6-7 states but now they fall under one government entity― China National Biotech Corporation. China has got two distinct markets- one is Category A type of vaccine- the basic immunisation type of vaccine and other vaccines. The basic immunisation vaccines are supplied by government organisations . They buy it from the industry and give it to their population free of cost. There are 38 private vaccine manufacturers in China. There is no price restriction for all these players. When I went to China and discussed with their FDA, local people and companies, what I found was that they were selling their products at a price which was if not equal, more than the price in the US. How does
this translate? With 38 manufacturers, how do they manage to survive? They make just about 5 million doses in the entire year but even if they make just 5 million and sell it for $100 a dose, their turnover is $500 million which is almost equivalent to Serum Institute’s turnover where we supply almost more than 1.3 billion doses. There is no comparison. These manufacturers have no incentive to increase their production and come and supply to UN agencies. UN agencies require vaccines at lower price. The Chinese manufacturers are not interested. Instead of supplying at that price, they prefer to supply within China and make profits. But the fear from the government sector still exists. The Chinese government can take a strategic decision to ask their industry to supply to the UN agencies and then provide compensation. Is there an opportunity for Serum Institute to expand the market in China?
Yes and no. I will say no directly because it is a very difficult route. Any manufacturer and supplier of vaccines or products, even if you have supplied billions of doses, if you want to go to China you have to have a local partner. And your drug will be treated as a new drug. If you’re selling the product in China, you have to start from basic toxicity studies, the animal studies, then phase-1, then phase-2, and then phase-3. That process in China takes almost 7 to 8 years. Other countries don’t have the same procedure. Ideally if you are a UN supplier, they should waive these conditions, but they have not. Actually this is an artificial barrier so that others don’t challenge their dominance. The Indian government should apply the same rules for Chinese suppliers― whether it is bulk drugs, finished products or vaccines. If they apply the same rules then that will be a reciprocation and will help the domestic manufacturers.
Are you expecting any new measures from the government?
Honestly, when H1N1 struck globally in 2010 we were also scared. There were many deaths in Pune also. Four manufacturers came forward, interacted with WHO and made the vaccines. Initially there was a commitmentthe government encouraged three companies by giving a small token amount of about Rs. 10 crores each for expediting the process. Then they said they will sort of make good by buying the vaccines. However, the government did not buy a single dose from the Indian market and now they are asking for that money back as they did not buy. There is a legal dispute that is going on and this is disappointing.
Ideally, there should be a stockpile policy for pandemics as is the case with WHO and almost all European countries. Every European country has entered into a contract with a local manufacturer to supply vaccines even when there is no pandemic. Because when a pandemic strikes, the government should get priority and get a certain number of doses quickly- say, about 50 million doses. The government pays them 50 cents per dose, which means $25 million to just keep the facility up and running. If a pandemic comes they are assured that their 50 million doses will be supplied. But such proactive measures have not been taken in India as yet.
What is the update on the dengue vaccine?
With regards to dengue vaccine, the formulation is going on. We have still not started the human trials. It’s under development. We have got the technology from Mahidol University, Thailand who are the pioneers and we have also got the technology from NIH; so we are pursuing both arms. Whichever gives us best results in the initial studies that will be pursued. It will take at least 4 to 5 years.