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
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.