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

Thursday, December 17, 2015

When the cow is in the news mostly for the wrong reasons, an Indian company based in Hyderabad gives us a reason to smile. Ind­ian Immunologicals Ltd (IIL) turns out to be a subsidiary of the National Dairy Development Board. The latter of course was started by the “milkman of India” Verghese Kurien. As Operation Flood, with the aim of turning India into a milk surplus nation, stunned all with its success, the NDDB realised it was spending a fortune on cattle vaccines. In the ’80s, one dose of vaccine cost Rs 14 (equivalent to about Rs 350 today). The NDDB decided to set up IIL, its own vaccine manufacturing subsidiary, in 1982.

Having obtained technology from the UK, IIL started making vaccines to tackle foot-and-mouth disease in cattle. Thirty-four years on, it offers a single dose of vaccine for Rs 7.60, half the price at which the vaccine was sold by MNCs in 1982. As IIL’s deputy managing director Dr K. Anand Kumar explains, “If you want quality milk, you need healthy cows. It is this motto that soon led IIL to become the world’s largest producer of this vaccine—with an annual capac­ity for 360 million doses. “The central government does not give us any preferential treatment. We compete with other private manufacturers but our high technology processes and the economics of scale make us winners,” explains Dr Kumar.

Then, in 1998, an enth­used government asked IIL if it could develop an anti-rabies vaccine for hum­ans and the scientists jumped at the chance. They started a plant in Ooty in 1999 and today, IIL has garnered 60 per cent of the rabies vaccine market, which was earlier dominated by multinationals.

If a vaccine of foreign make is sold for Rs 300, IIL’s is in the Rs 200 range. IIL also makes vaccines for DPT, hepatitis-B and tetanus. For these too, the price difference seems almost too good to be true. “A DPT vaccine manufactured by IIL costs Rs 4.50 a dose, while one from a leading MNC costs Rs 1,000,” says Dr Anand Kumar. Scientists priva­tely agree that if it were not for IIL, vaccine prices would have shot up sharply. With a turnover of Rs 485 crore in the last financial year, IIL only makes a marginal profit  of 10 per cent. “We are not greedy for profits, they are a byproduct of efficiency,” is the mantra all IIL employees chant.