It’s a text message from a home healthcare company. A direct-to-consumer sell no doubt, but also indicative of the fact that seasonal flu shots, for long a practice in the developed world against influenza, have arrived in India. Even if that means paying out of pocket, unlike many other countries where payers reimburse seasonal flu shots. The French drugmaker Sanofi Pasteur, which has been selling influenza vaccines in India for a decade, says the acceptance has increased in the last few years, leading to the doubling of vaccination numbers. Sanofi and others sold two million doses last year. People are now open to vaccination because sporadic flu outbreaks throw life out of gear. Like the one Tamil Nadu is currently facing and where flu vaccine stocks are being rushed creating artificial shortages in cities like Bengaluru.
Did the Indian vaccine makers, which supply 60% of the global paediatric vaccines, dump their pandemic flu plans too soon?
For all the three manufacturers, the H1N1 contract was meant to propel them into flu vaccines eventually. It turned out to be a ‘jam’. “We thought pandemic preparedness would run into billions of doses and would give us revenue to get into seasonal flu, chest infection, and similar other vaccines. But we got demotivated when the orders were arbitrarily cancelled,” says Rajesh Jain, joint managing director of Panacea.
Missed opportunity, messier experience
In April 2009, the first case of influenza A H1N1 was detected in Mexico and by year-end, 214 countries were affected by the pandemic. (Flu viruses are of three broad categories—influenza A, B or C. Of this, influenza A is the most common type. H1N1 is a variety of influenza A and has many different strains.) By May 2010, while the WHO declared the pandemic to be over, India took it seriously and made some “unprecedented and innovative interventions”. One of which was to get into an agreement with Indian vaccine makers to procure 6.25 lakh doses from each of the three manufacturers at Rs 250 per dose. It handed out some advance payments, too. Bharat Biotech, Serum and Panacea laid out a delivery plan, between October and December 2011. In spite of that, a delivery date was announced unilaterally, some ready doses were taken and the rest cancelled.
All the three companies had to book losses upwards of Rs 15 crore each. They couldn’t immunise themselves against the ‘innovative’ intervention of the health ministry. But they eventually challenged the government decision. Pandemic preparedness of a country is about guaranteed procurement, outbreak or no outbreak. Five years later, the arbitration between the two parties is yet to conclude.
Apart from the one-time loss, that event dealt a severe blow to the flu vaccine programmes of Indian companies—Bharat Biotech and Panacea left their plants idling. Serum Institute, the largest Indian vaccine manufacturer with FY16 revenue of Rs 4652 crore, moved on to develop an injectable vaccine for seasonal flu. In 2011, when the government backed out, Serum did sell some doses of its H1N1 vaccine, which was an intranasal spray, in the retail market. “But once the [pandemic] panic factor subsided, there was hardly any sale,” says Prasad Kulkarni, medical director of Serum Institute in Pune. In 2014, Serum launched its flu vaccine, Nasovac-S, but the company admits its sale has been “far below its expectation”.
Not just childhood jabs
More than any drug, vaccines, which are grown in eggs or cell culture, are beholden to scale to drive down unit costs. Which is why Indian companies remain unmatched in their price competitiveness to global bulk vaccine buyers like Global Alliance for Vaccines and Immunisation (GAVI), which ensures the affordable access of essential paediatric vaccines to more than 70 countries. So far, Indian companies have accounted for a change.
The global demand for vaccines is estimated to reach $59.2 billion in 2020, up from $32.2 billion in 2014. And a lot of this growth is going to come from the rapidly growing private vaccine market, which calls for a new product strategy by vaccine companies. Indian vaccine producers get nearly 95% of their revenue from supplying to global or national immunisation programmes, which requires little marketing or distribution network. But the private or adult vaccine market does.
Sanofi started its corporate ‘influenza prevention’ programme in India in 2013 when it vaccinated about 17,000 employees from 50 companies. In three years, the programme grew to over 60,000 employees from 220 companies, says Jean-Pierre Baylet, country head of Sanofi Pasteur South Asia.