Asia–vac­cine man­u­fac­tur­ing hub

Slowly, yet steadily Asia’s vac­cine in­dus­try is grow­ing. Huge de­mand, novel vac­cines to tackle rare and emerg­ing diseases, im­mu­niza­tion pro­grammes, aware­ness of diseases preven­tion, in­creas­ing in­ter­est and in­vest­ments from ma­jor phar­ma­ceu­ti­cal com­pa­nies a

BioSpectrum (Asia) - - Bio Content - Aish­warya Venkatesh aish­warya.venkatesh@mmac­tiv.com

Home to over 60 per cent of the world’s pop­u­la­tion, Asia rep­re­sents a sig­nif­i­cant op­por­tu­nity for vac­cines pro­duc­ers. Asia is one of the largest mar­kets for vac­cine man­u­fac­tur­ers and the re­gion is also slowly emerg­ing as a vac­cine man­u­fac­tur­ing hub. Vac­cines al­lay the threat of pre­ventable deaths and this makes vac­cines on of the most im­por­tant as­pect of pub­lic health.

The present emer­gency with the Ebola and Zika vac­cine pro­vides us an ex­cel­lent ex­am­ple where a vac­cine was fea­si­ble sev­eral years ago, but the global health com­mu­nity waited for a hu­man­i­tar­ian dis­as­ter to di­rect ef­forts and re­sources to de­velop this vac­cine. Emer­gence and re-emer­gence of new and long-for­got­ten diseases have in­sti­gated en­hanced novel vac­cine re­search and de­vel­op­ment. Ac­cord­ing to a trans­parency mar­ket re­search re­port, the global vac­cines mar­ket was val­ued at around $ 28.0 bil­lion in 2016 and is ex­pected to post CAGR of over 6.0 per cent from 2017 to 2025 to reach value of around $ 48.0 bil­lion by 2025. The ris­ing de­mand for bet­ter health­care in­fra­struc­ture and high aware­ness lev­els of the ben­e­fits of im­mu­niza­tion are the ma­jor fac­tors boost­ing the vac­cine mar­ket growth. About 80 per cent of global vac­cine sales come from large multi­na­tional cor­po­ra­tions (MNC) that were the prod­uct of var­i­ous merg­ers and ac­qui­si­tions of phar­ma­ceu­ti­cal com­pa­nies over the past decades. Th­ese in­clude GSK, Pfizer, Ab­bott Lab­o­ra­to­ries, Bax­ter In­ter­na­tional Inc, Cadila Phar­ma­ceu­ti­cals, GE Health­care, John­son & John­son, Merck & Co., No­var­tis, Sanofi Pas­teur. De­spite huge de­mand, bar­ring a few play­ers in In­dia, China, Ja­pan; the num­ber of vac­cine man­u­fac­tur­ers in Asia is rel­a­tively low and the con­ti­nent is de­pen­dent on im­ports to ful­fil their de­mand for im­mu­niza­tion.

A re­port by World Health Or­ga­ni­za­tion (WHO), high­lights that there are more than 120 new prod­ucts in the de­vel­op­ment pipeline out of which 60 are of im­por­tance for de­vel­op­ing coun­tries. In­creas­ing af­ford­abil­ity, ris­ing health­care ac­cess in In­dia and China, and sub­si­dized im­mu­niza­tion for the el­derly in Aus­tralia, Ja­pan and South Korea has in­creased the de­mand for qual­ity vac­cines mul­ti­fold. In a bid to pro­mote good health­care and re­duce the in­ci­dences of pan­demics, Asian gov­ern­ments are striv­ing to en­sure that ev­ery stra­tum of the so­ci­ety, ir­re­spec­tive of so­cial and eco­nomic sta­tus is granted ac­cess to im­mu­niza­tion. In May 2012, the WHO launched the ‘Global Vac­cine Ac­tion Plan (GVAP)’ that was au­tho­rized by 194 mem­ber states of the World Health Assem­bly. The grow­ing economies of Asia and the in­creas­ing ur­ban mid­dle class with speed­ing ca­pac­ity are en­abling ex­panded ac­cess to health­care, in­clud­ing vac­cines. More­over, Asia is home to more than 60 per cent of the world’s pop­u­la­tion and the grow­ing mid­dle­class with aware­ness of heath and preven­tion is fur­ther spurring the growth of this in­dus­try.

Shar­ing his in­sights on Asian vac­cine in­dus­try, Si­no­vac spokesper­son says, “Asia ac­count­ing for the largest pop­u­la­tion and birth co­hort com­pared to any other con­ti­nent in the world thus has the high­est po­ten­tial for vac­cines. Bet­ter ac­cess, im­prove­ment in cover­age, in­clu­sion of new es­sen­tial vac­cines into EPI would en­sure that the growth is con­sis­tent.”

Another ma­jor fac­tor driv­ing the growth of the vac­cines mar­ket is the ris­ing bur­den of in­fec­tious diseases across the globe. The preva­lence of in­fec­tious diseases such as in­fluenza, malaria, pneu­mo­nia, measles, meningo­coc­cal menin­gi­tis, dengue, HIV, hep­ati­tis, and diph­the­ria is quite high. Ac­cord­ing to the WHO,

3 to 5 mil­lion cases of in­fluenza are

re­ported each year world­wide and an es­ti­mated 290,000 to 650,000 deaths oc­cur due to the dis­ease. In 2015, 325 mil­lion peo­ple were liv­ing with chronic hep­ati­tis in­fec­tions and an es­ti­mated 1.34 mil­lion deaths were re­ported due to it glob­ally. Pneu­mo­coc­cal dis­ease kills over half a mil­lion chil­dren be­low the age of five years glob­ally ev­ery year. Most of th­ese deaths oc­cur pre­dom­i­nantly in de­vel­op­ing coun­tries. Nearly 215,000 chil­dren deaths un­der the age of 5 years are re­ported each year world­wide due to vac­cine-pre­ventable ro­tavirus in­fec­tions. The ris­ing cases of th­ese diseases is ex­pected to boost the de­mand for vac­cines used for the preven­tion of th­ese in­fec­tious diseases which in turn is ex­pected to boost the growth of the mar­ket dur­ing the fore­cast pe­riod. Gov­ern­ment ini­tia­tives for ex­pand­ing vac­ci­na­tion cover­age is likely to boost the de­mand for vac­cines glob­ally.

Re­cently the vac­cine in­dus­try has in­tro­duced many new vac­cines cov­er­ing a large spec­trum of diseases and this is push­ing the mar­ket to­wards sig­nif­i­cant growth. Mar­ket re­search re­ports sug­gest that the vac­cines for can­cer are ex­pected to have a phe­nom­e­nal growth due to in­creased dis­ease in­ci­dence in the ar­eas of cer­vi­cal, pros­trate and lung can­cer. Though the pe­di­atric vac­cines were dom­i­nat­ing the vac­cine mar­ket in the past, a change in this trend is ex­pected due to a high de­mand fore­casted for the adult vac­cines.

In Asia, Ja­pan, In­dia and China re­gions are the hotspots for vac­cine man­u­fac­tur­ing. Ja­pan has been very suc­cess­ful and cur­rently leads the Asian vac­cine in­dus­try. In­dia un­de­ni­ably re­mains the

vac­cine epi­cen­ter of the world, be­ing home to highly suc­cess­ful vac­cine giants who have helped the coun­try emerge as a global vac­cine man­u­fac­tur­ing hub. De­spite safety show­downs, China’s vac­cine in­dus­try is grow­ing too. The first vac­cine pro­duced in China to ob­tain the UN’s pre­qual­i­fi­ca­tion was Ja­panese en­cephali­tis vac­cine in Oc­to­ber 2013. Since then the in­dus­try has seen sig­nif­i­cant growth. Some of the ma­jor play­ers in this in­dus­try in­clude Chengdu In­sti­tute of Bi­o­log­i­cal Prod­ucts, Hualan Bi­ol­gi­cal Bac­terin, Jilin Brother Biotech, Wuhan In­sti­tute of Bi­o­log­i­cal Prod­ucts, Lanzhouz In­sti­tute of Bi­o­log­i­cal Prod­ucts.

The vac­cine in­dus­try in East Asia, typ­i­cally in Ja­pan, Korea and Tai­wan, has wit­nessed a good growth over the past ten years. As part of its 2020 strat­egy, the Viet­namese Gov­ern­ment in­tends to meet 80 per cent of its do­mes­tic phar­ma­ceu­ti­cal de­mand through lo­cal drug man­u­fac­tur­ers. The pol­icy is hav­ing a ma­jor im­pact on the vac­cine mar­ket, with the coun­try now able to pro­duce 11 of the 12 vac­cines in­cluded in the na­tional ex­panded im­mu­niza­tion pro­gramme. In­done­sia is also push­ing to ex­pand its do­mes­tic vac­cine man­u­fac­tur­ing, so that the mar­ket is cov­ered with vac­cines in the coun­try’s reg­u­lar im­mu­niza­tion sched­ule. The state-owned phar­ma­ceu­ti­cal com­pany Bio Farma is at the cen­ter of th­ese ef­forts, and has been ex­pand­ing ex­ports so that 60 per cent of its pro­duc­tion is now ex­ported to 133 coun­tries, UNICEF and WHO.

The gov­ern­ment of Korea has set am­bi­tious tar­gets for the growth of its vac­cine in­dus­try by the end of the decade. It tar­gets a ten­fold in­crease in the value of ex­ports and an in­creas­ing pres­ence in its do­mes­tic mar­ket from 30 to 80 per cent. In Tai­wan, too there are bud­ding man­u­fac­tur­ers join­ing the mar­ket with in­no­va­tive port­fo­lio such as new in­fluenza vac­cines and can­cer vac­cines.

NEARLY 215,000 CHIL­DREN DEATHS UN­DER THE AGE OF

5 YEARS ARE RE­PORTED EACH YEAR WORLD­WIDE DUE TO VAC­CINE-PRE­VENTABLE RO­TAVIRUS IN­FEC­TIONS. THE RIS­ING CASES OF IN­FEC­TIOUS DISEASES IS EX­PECTED TO BOOST THE DE­MAND FOR VAC­CINES USED FOR THE PREVEN­TION OF TH­ESE IN­FEC­TIOUS DISEASES WHICH IN TURN IS EX­PECTED TO BOOST THE GROWTH OF THE MAR­KET DUR­ING THE FORE­CAST PE­RIOD. GOV­ERN­MENT INI­TIA­TIVES FOR EX­PAND­ING VAC­CI­NA­TION COVER­AGE

IS LIKELY TO BOOST THE DE­MAND FOR VAC­CINES GLOB­ALLY.

DE­SPITE SIG­NIF­I­CANT GROWTH OP­POR­TU­NITY & HUGE DE­MAND, BAR­RING A FEW MA­JOR COM­PA­NIES, ASIA’S

VAC­CINE IN­DUS­TRY HAS NOT GROWN SUB­STAN­TIALLY. IN THE LAST 25 YEARS, MANY VAC­CINE PLAY­ERS IN ASIA WERE EI­THER CLOSED OR SOLD TO OTHER FIRMS. VAC­CINE MAN­U­FAC­TUR­ERS IN IN­DIA AND CHINA SUF­FER FROM LOW FUND­ING AND DO NOT HAVE TECH­NOLO­GIES TO TRULY COM­PETE GLOB­ALLY IN NOVEL VAC­CINE R&D. THE VAC­CINE R&D IN ASIA IS STILL IN ITS IN­FANCY.

Sup­ply and de­mand sce­nario

The rev­enue growth op­por­tu­nity in vac­cines looks far more promis­ing when com­pared to the over­all mar­ket for phar­ma­ceu­ti­cals. Rev­enues earned by vac­cines man­u­fac­tur­ers world­wide reached $27.6 bil­lion in 2015 ac­cord­ing to Kalo­rama In­for­ma­tion, up 11 per cent from $24.7 bil­lion in 2014, as sales in all seg­ments ex­panded. This is, by Kalo­rama’s es­ti­mate, at least five to ten times the rev­enue growth rate of the over­all phar­ma­ceu­ti­cal mar­ket in re­cent years. Vac­cines, in the past, have been viewed as com­modi­ties with low re­wards, but Hep­ati­tis B vac­cine and anti-can­cer im­munother­a­peu­tics have changed the whole vac­cine mar­ket anal­y­sis. The ini­tial mar­ket price for Hep­ati­tis B vac­cine was $ 200 for three doses.

But de­spite sig­nif­i­cant growth op­por­tu­nity and huge de­mand, bar­ring a few ma­jor com­pa­nies, Asia’s vac­cine in­dus­try has not grown sub­stan­tially. In the last 25 years, many vac­cine play­ers in Asia were ei­ther closed or sold to other vac­cine man­u­fac­tur­ers. Vac­cine man­u­fac­tur­ers in In­dia and China suf­fer from low fund­ing and do not have tech­nolo­gies to truly com­pete glob­ally in novel vac­cine re­search and de­vel­op­ment. The vac­cine R&D in Asia is still in its in­fancy. Also, the vac­cine mar­kets are com­plex, there are in­di­vid­ual mar­kets for in­di­vid­ual vac­cines based on diseases preva­lent in that re­gion, and this adds to the chal­lenge. Ma­jor in­dus­trial con­straints, such as com­plex­ity of the vac­cine de­vel­op­ment and clin­i­cal tri­als; high R&D in­vest­ment and pro­duc­tion costs; large in­vest­ments in up­grad­ing and build­ing new man­u­fac­tur­ing fa­cil­i­ties had pre­vented small and mid­dle-size vac­cine com­pa­nies to com­pete with big in­ter­na­tional phar­ma­ceu­ti­cal com­pa­nies. The longterm in­vest­ment and high risk of poor re­turn keep most ven­ture cap­i­tal­ists at bay.

Though the main vac­cine mar­kets in terms of value are lo­cated in de­vel­oped coun­tries, the big­gest de­mand for vac­cines come from the rest of world. Though slow, Asia’s vac­cine in­dus­try is on an up­ward graph. There are many indige­nous Asian play­ers in their early phase of mat­u­ra­tion and it will not be long be­fore their prod­ucts take on mar­ket shares start­ing from South East Asia re­gion and Africa re­gion. In or­der to make Asia’s vac­cine in­dus­try a suc­cess it is im­por­tant that more col­lab­o­ra­tive pub­lic pri­vate part­ner­ship (PPP) mod­els are es­tab­lished be­tween the academia, gov­ern­ment and in­dus­try. If Asian na­tions build strong vac­cine in­dus­try, then con­ti­nent will have a huge eco­nomic growth en­gine through man­u­fac­tur­ing valu­able bi­o­log­i­cal prod­ucts.

“Asia would emerge as the strong­est hub for vac­cine man­u­fac­tur­ing, led by a tier 1 set of coun­tries com­pris­ing of In­dia-China-South Korea-In­done­sia. This tier 1 set would chal­lenge the du­op­oly sta­tus of big pharma on the con­tem­po­rary vac­cines such as Pneumo Con­ju­gate, Men­ing Con­ju­gate, HPV etc. A tier 2 set of Asian coun­tries would tran­si­tion into se­ri­ous vac­cine man­u­fac­tur­ing in as­so­ci­a­tion with tier 1 coun­tries such as Malaysia, Philip­pines, Viet­nam, Pak­istan, Bangladesh, Saudi Ara­bia and Tur­key. Asia will de­velop its own indige­nous vac­cines es­pe­cially for diseases en­demic in the re­gion like the way it’s al­ready hap­pen­ing for EV71, HEV etc,” Si­no­vac spokesper­son con­cludes.

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