NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, January 27, 2015

Asia’s biggest vaccine maker is working on a string of new low-priced offerings that threaten to undercut brands from the world’s biggest pharmaceutical companies.

Serum Institute of India Ltd., which makes vaccines injected in 65 percent of the world’s children, is targeting newer vaccines, including one for the human papillomavirus that could be available in late 2018 and sell at a third of the price of Merck & Co.’s blockbuster Gardasil. Also in development are vaccines for types of severe diarrhea and pneumonia.

The version of the HPV vaccine will initially be launched in developing countries and Serum aims to later secure approval for the product in Europe, Suresh Jadhav, executive director of the Indian company, said in an interview. Gardasil is the world’s second-best selling vaccine.

Fueled by the invention of advanced new products that command ever higher prices in western markets and a push to increase immunization for polio and measles in developing nations, vaccine sales are growing at double the rate of other pharmaceuticals, according to the World Health Organization.

The Ebola epidemic in West Africa has also lent urgency to the need for affordable versions of new vaccines for poor countries. The global market for vaccines has more than tripled to $25.5 billion from $7.4 billion in 2005, estimates Kalorama Information, a publisher of market research.

Global Trade

The world’s biggest drugmakers — including Merck, GlaxoSmithKline Plc (GSK), Sanofi and Pfizer Inc. — dominate the market because of the heavy investments needed to develop vaccines and the high failure rate of potential candidates. Unicef procures their vaccines cheaply for the governments of the world’s poorest countries, some on behalf of the Geneva-based GAVI Alliance, a charity that is the biggest provider of money for vaccines sent to developing countries.