India, the world’s largest vaccine producer, is heading for an unusual problem of plenty with Covid-19 vaccines. At least 20 different Covid-19 vaccines are in various stages of development in the country while vaccine manufacturers have built a massive annual capacity exceeding 3 billion doses. Top industry officials predict that the prices of the vaccines are likely to crash in the next few months.
“Post June, the Covid-19 vaccine market is going to be like a sanitiser market. There will be too many vaccines available, and nobody would need to wait in a queue. It is going to be a problem of plenty,” says Dr Hemanth Nandigala, managing director of Virchow Biotech, a vaccine maker.
G.S. Reddy, a Hyderabad-based expert on vaccines, agrees. He cites how the first-ever Hepatitis-B vaccine was priced high by a multinational company more than a decade ago. “They charged nearly ₹1,400 per dose, unaffordable for many households in the country. Then an Indian company, Shantha Biotechnics, developed novel processes and began selling the vaccine at ₹400-₹500 per dose. Soon after, several other companies such as Bharat Biotech [International Ltd or BBIL], Serum [Institute of India], Panacea Biotec, Biological E., and Indian Immunologicals joined the bandwagon. The price came down crashing to as low as ₹2.50 per dose.”
Reddy predicts a similar trend in the prices of Covid-19 vaccines. “Prices are going to crash. It is likely to drop to ₹5-₹10 per dose and the vaccine manufacturers will still make a profit from it since their production cost is lower,” he says.
Even in the case of manufacturing capacity, a similar scramble was visible. “In 2008-09, Hepatitis-B vaccine capacity was built six-seven times the national requirement. A huge capacity, running into around 500 million-600 million doses, was built then. Most of these capacities were converted/reconfigured later to manufacture other vaccines,” says Reddy.
Aldon Fernandes, vice president, R&D Biologicals, Bharat Serums and Vaccines Ltd (BSVL), says the Covid-19 vaccine prices have already fallen to $5. “Expensive vaccines such as Moderna’s will face uncertainty as less expensive peers flood the market,” he says.
Serum is selling Covishield to the Indian government at a special price of ₹200 per dose. This is for the first 100 million doses, after which prices would be higher, according to the company. Its initial plan is to sell it on the private market at ₹1,000 per dose. Covishield is priced much lower than the two international vaccines. Moderna’s vaccine is sold at $32-$37 per dose while Pfizer’s is around $20.
On January 11, the Indian government signed a purchase agreement with BBIL for 3.85 million doses at ₹295 per dose (excluding tax). BBIL committed another 1.65 million for free, bringing down the cost of the vaccine to ₹206 per dose, according to the health ministry. BBIL is also believed to have committed to supply an additional 4.5 million doses, for an undisclosed price.
There are many vaccine candidates vying for approvals at this stage. The rush will slowly dissipate as the prices drop. “The fact is that clinical trials involving participants up to 40,000 may lead to a capital expenditure of ₹15 crore-₹20 crore. There are several other expenses too. So, it’s unlikely that many more vaccine candidates will come into the market,” says Fernandes.
The two big players in Indian market, Serum and BBIL, are furiously expanding their capacities to cater to the entire world. They both have invested heavily to ramp up their capacities in Hyderabad, Pune, and Bengaluru.
Serum, the world’s largest vaccine manufacturer by volume, is manufacturing Covishield while developing four more vaccines. Of the five vaccines, three are in alliance with international pharma companies, while the remaining two are being developed indigenously.
It is in the process of more than doubling its production capacity in Pune at breakneck speed. It will scale up its annual capacity to 2.4 billion doses with a second facility going on stream by March, from 1.5 billion doses available today. The company which predicts a further spike in demand is now looking to enhance capacity further with a third facility. At present, more than half of the capacity is utilised for producing Covishield while the remaining is dedicated to the manufacture of several other vaccines.
BBIL, which has already rolled out the indigenously-developed Covaxin for emergency use, is developing three more vaccines. The first one is an intranasal vaccine being developed by University of Wisconsin-Madison. The company has begun the development and testing of the vaccine called CoroFlu in association with U.S.-based vaccine major FluGen. The second vaccine candidate is being developed in association with Thomas Jefferson University of Philadelphia. Under the licence agreement, BBIL gains exclusive rights to develop, market, and deliver Jefferson’s vaccine across the world, excluding the U.S., Europe and Japan, where Jefferson continues to seek partners. The third vaccine is being developed under a licensing agreement with Washington University School of Medicine in St. Louis. BBIL has kept the development of these vaccines under wraps.
On the flip side, BBIL is on a capacity expansion spree. The annual capacity for Covaxin is expected to reach 700 million doses annually by June-July, up from 200 million now. Three more BSL-3 (Biosafety level 3) facilities are being readied, of which one 100-million facility is coming up near the existing facility in Hyderabad’s Genome Valley. The other two are coming up at Bengaluru and Ankleshwar (in Gujarat).
Virchow Biotech is one of the three-four Indian companies the Russian Direct Investment Fund (RDIF), a sovereign wealth fund that funded the development of Sputnik V, has signed a deal with to contract-manufacture the vaccine. RDIF hopes to source at least 300 million doses annually from India and has signed up a few vaccine makers, including Virchow and Hetero Biopharma, both from Hyderabad.
Apart from Dr Reddy’s Laboratories (DRL), which is conducting clinical trials for Sputnik V in India, several other pharma/vaccine companies such as Wockhardt, Zydus Cadila, Panacea Biotec, Indian Immunologicals, Mynvax, and Biological E. have joined the vaccine race.
Interestingly, all idling capacity across India is being roped in for vaccine production. The mad rush for the Covid-19 vaccine has turned out to be a lifeline for some fund-starved pharma companies.
The frenzy over Covid-19 vaccines has helped immunisation programmes in India to gain strength, with more people willing to come forward for vaccination. “Vaccines will be widely accepted by people. The market for other vaccines for dengue, HPV, and influenza will grow faster with more people now open to inoculating themselves,” says Fernandes.
“We have seen the vaccine market evolve. It’s a complete transition today far from the traditional way of vaccine making. Earlier, we used to make vaccines by killing, mutating or partly damaging bacteria and viruses. Then came the purified vaccine, or what is called a sub-unit vaccine. Now the new concept of vector vaccine has arrived, thanks to the development of adenovirus vector vaccine for Covid-19. This vector vaccine concept can be replicated for other vaccines to develop much more effective vaccines that are easier to manufacture and store,” says Fernandes.
Virchow Biotech is another company that is developing a vaccine indigenously. Being developed in association with the Biotechnology Industry Research Assistance Council (BIRAC) under the World Bank-funded National Biopharma Mission (NBM), the vaccine is at a pre-clinical trial stage.
What if Covid-19 becomes extinct soon? Experts do not rule out such a possibility. “In my opinion, the Coronavirus may disappear by 2022. And the government may have to suspend the immunisation programme in the next 12 months,” adds Reddy.
The next few months will be crucial for Covid-19 vaccine makers. They will have to strike while the iron is hot.