Business Today

The immunity bug bites

India becomes a hot market for optional vaccines.

E. Kumar Sharma | Print Edition: August 22, 2010

The paediatrician shrugged: "It's your choice, if you don't want the chicken pox vaccine for your daughter. But remember, one day she will get married and if she has the pox when she is carrying, the child could be born with brain damage." And what about the son, the father voiced his and his wife's concern? "Well, you know what competition is like today...what if he has pox before a major exam?"

Choices, choices. The parents knew a bout of chicken pox built more immunity in a child than any vaccine. But, a damaged brain? They plumped for the optional vaccine. Multiply that decision 26 million times - that's the number of newborns in India every year - and it is easy to see why Big Pharma is making a beeline for India with new age vaccines. The latest has been the July launch of Prevnar 13 by Pfizer Inc's subsidiary Wyeth.

It is a three-in-one optional vaccine against bacteria that can cause pneumonia, meningitis and sepsis in infants and children. Prevnar 13 joined the 20-odd-and-growing category of optional vaccines available in India. The good news for parents is that more diseases can be covered today, some with one jab. The bad news - at least for most of them - is that the new vaccines cost a bomb, are not part of the government's immunisation programme, and the optional label leaves most of them confused.

For Pfizer-Wyeth, which wants a piece of the $120 million (Rs 560 crore) Indian market for vaccines made by the private sector, Prevnar 13 marks its entry into the domestic vaccines business. The vaccine's predecessor, Prevnar, was Wyeth Inc.'s bestseller - with global sales of some $2.4 billion in 2007, the latest year for which the vaccine's sales data has been made public - and one of its two big drugs that attracted Pfizer's US parent.

Pneumonia-busting Prevnar 13 is a so-called pneumococcal conjugate vaccine as, according to Kewal Handa, Managing Director of Pfizer and Wyeth in India, it covers 13 strains of the pneumococcal bacteria compared to the seven by Prevnar. The pneumococcal bacteria has a total of 90 strains, which makes it the most prevalent disease-causing agent in children.

Some scary facts to put that in perspective: The mortality rate in India for children under five years of age is 69 per 1,000 births, and 410,000 of them die of pneumonia alone each year. Then there is diarrhoea, which claims around 400,000 children typically under the age of five each year. In other words, just these two diseases claim 2,220 children a day.

But the government hands out just six vaccines as part of its regular vaccine protocol. These are BCG (for tuberculosis), DPT (for diphtheria, pertussis or whooping cough, and tetanus), polio, measles and, in some states hepatitis B and MMR (measles, mumps and rubella). Optional vaccines are not on the must-have list of paediatricians and their costs make their use prohibitive. The Prevnar 13 course of three shots plus a booster retails at Rs 16,000. Against this, the six vaccines in the government programme cost just Rs 200 in the open market.

Take diarrhoea, next. A fourth, or 100,000, of the total deaths are caused by the wheel-shaped rotavirus (the norovirus and bacteria are responsible for the rest). There is a vaccine for this virus: Rotarix, made by GlaxoSmithKline or GSK. But this is priced at Rs 1,000 per dose for the course of two doses. GSK India says the vaccine costs $50 (Rs 2,500) per dose in its home market and it is subsidising the price in India.

The optional vaccines are not restricted to infants: GSK's Cervarix prevents cervical cancer, and is aimed at teenagers. It costs Rs 9,000 for the full course of three doses. GSK alone has launched four optional vaccines between 2007 and 2009, including Cervarix and Rotarix. Next year, it plans to bring one for pneumonia.

Andrew Witty, GSK's global CEO, has watched emerging markets closely and is keen on making medicines affordable. For him, the Indian market is crucial: vaccine sales account for close to 12 per cent of GSK's total business in the country, against six per cent four years ago, when it began the flurry of launches. GSK and Pfizer are not alone: multinationals Merck, Novartis and sanofi-aventis/ Shantha, and local companies Bharat Biotech, Serum Institute of India, Biological E and Panacea Biotec have big stakes.

Pfizer, like the other pharma majors, relies on the government for its data on child deaths. And the government does not have ready and easily accessible comprehensive data giving the break-up by socioeconomic category. What is known is that the basic immunisation programme covers only two-thirds of the population, and India has 9.4 million children who have never been immunised.

With the paediatric segment accounting for 60 per cent of the market and a growing middle class that can afford vaccines in the private market, the potential is clear. Ask Sravanthi Reddy, Director of International Operations and Franchise at Shantha Biotechnics, a home-grown vaccines pioneer that was acquired by France's sanofi-aventis Group in July 2009. "The market was $665 million in 2007-08 and is growing at over 20 per cent. It is primarily driven by exports, which were worth more than $360 million. The domestic market for vaccines is $300 million, with the private sector accounting for $120 million," she says. But, while optional vaccines offer protection against more and more diseases, the boom has thrown up two issues: price and an assurance on the efficacy and the need for the new breed.

Pricing Ploys
Some, like M.K. Bhan, Secretary to the Department of Biotechnology under the Ministry of Science and Technology, are confident that prices will come down with competition. Says Bhan, who is also a member of the National Technical Advisory Group on Immunisation: "The government is already supporting innovative research and has extended R&D cost support to several companies like Shantha for cholera, Bharat Biotech for rotavirus and malaria and Panacea for influenza."

He says at least three Indian companies are working on a rotavirus vaccine and should be able to provide an affordable one in two to three years, and even export it. Indian companies, he says, tend to take a little longer than multinationals because they operate on shoe-string budgets. But a vaccine can be developed in India for $40-50 million, or Rs 184-230 crore, including the cost of trials, while multinationals abroad have to invest $600-700 million.

Companies in India are pursuing new vaccines aggressively. Sanofi-aventis/ Shantha is working on Japanese encephalitis, dengue and rotavirus. In December 2009, Shantha launched Shanchol, India's first oral vaccine for cholera. Shantha's Reddy points out that the company's strategy in India has always been based on a low-cost platform, which allows it to provide low-price, big volume vaccines targeted at government-funded markets.

"With sanofi's broad technology base we aim to provide resources for continued innovation and investments. And thanks to sanofi's market reach we hope to make these quality vaccines accessible to more people who are least able to afford vaccines, in both low and middle-income countries," says Reddy, who is also the daughter of K.I. Varaprasad Reddy, the founder and current Managing Director of Shantha.

Serum Institute, according to its Executive Director S.S. Jadhav, hopes to be out with its rotavirus vaccine by late 2012 or early 2013 at a "very competitive" price. It has a vaccine in the trial stage similar to the one launched by Wyeth, and is working on one for the seasonal flu and a meningococcal pentavalent vaccine for another strain of meningitis. Bharat Biotech is more specific.

Chairman and Managing Director Krishna M. Ella says: "We hope to be out with the rotavirus vaccine in the next 24 months at one-tenth the existing market price today." Apart from this, the company is working on dengue, chikungunya, malaria, typhoid and the staphylococcus aureus bacteria, which is a prime cause of infections picked up in hospitals. "We are also looking at specialised vaccine segments like rabies and Japanese encephalitis," says Ella.

"It has taken Bharat Biotech 10 years to reach its first billion doses. We hope to touch the second billion doses in less than five years," says Ella, who plans to invest Rs 250 crore over the next two years to take innovative vaccines and therapeutics into clinical research. The Hyderabad-based company, which reported a turnover of Rs 260 crore in 2009-10, will also invest Rs 75 crore in new plants.

Multinationals say the vaccines will be cheaper if these are included in the volume-led government programme. In Brazil, for example, GSK supplies its rotavirus vaccine to the mass immunisation programme at prices much lower than those in the retail market.

Whose 0ption? What Option?
With optional vaccines, the issue is not just about prices. Is it all a marketing ploy to push overall sales? For Dr Rakesh Lodha, Assistant Professor at the Department of Paediatrics of the All India Institute of Medical Sciences in Delhi, watching the vaccine space is almost part of his job. "We are increasingly finding a new and disturbing form of entanglement being employed as a marketing strategy by vaccine manufacturers in India," he says in a study.

"This strategy involves the promotion and sale to doctors of newer vaccines - including polyvalent vaccines that are not part of the national immunisation programme - at a highly discounted price in relation to the MRP." In the study, published in the Indian Journal of Medical Ethics in January this year, he says: "In addition to the private communications to physicians, companies have now started advertising the price of their vaccines to doctors in medical journals. One company, for instance, placed advertisements in paediatrics journals quoting the price of its pentavalent vaccine as Rs 275 to the doctor while the MRP is Rs 585."

Also, Lodha points out that, unlike other goods, in the case of medicines, patients are unable to make an informed choice and have to rely on the judgement of the practitioner. One way to deal with this could be greater government involvement. Biotechnology secretary Bhan says India needs to focus on a couple of things if it wants to scale up vaccine delivery.

One, it must lay out a predictable policy. Two, he says, it will have to build the human resource capacity. At present, only eight per cent of those who need typhoid vaccines actually get it. The good thing is that the government is acting on another important front: that of deciding the efficacy, applicability and usefulness of such optional vaccines in the Indian context.

As this edition of BT was closing, the Department of Health Research created last year was to convene a meeting of the committee of four secretaries (including Bhan) to explore how the department and other ministries can work together on everything related to technology in health, including policy on technology per se, and public-private partnership. Most importantly, the meeting will also discuss public communication on the existing evidence on the efficacy and applicability of vaccines in India by creating the evidence base for policy formulation on technology. It may all be worth it if the exercise helps choosing the right vaccine any easier.

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