Chairman & CEO
Sathguru Management Consultants Pvt. Ltd.,
Indian enterprises have excelled in pediatric vaccines globally over the last two decades, largely funded by global immunization initiatives such as GAVI, Gates Foundation, and CEPI. Dual supply approach to WHO affiliated entities and India’s national immunization program, helped companies such as Serum reach global scale and secure economic returns with dual pricing strategy. Bharat, too, accomplished scale in rotavirus due to dual supply advantage.
How did we address Covid vaccine development by Indian companies?
Globally, 20 companies seriously embarked on a vaccine development effort as early as March 2020, when gene sequence for SARS-CoV-2 virus was released. Five Indian companies initiated action early on, with Bharat, Cadila and Gennova developing an indigenous vaccine and two others licensing international products. Bharat secured approval for emergency release on February 21. Cadila and Bharat have fully invested internal funds, without any support from the government or any international agency. This feat has no parallel in the world as global companies have leveraged external funding to de-risk the complex process of developing and delivering a viral vaccine.
Serum took the licensing route to secure technology from AstraZeneca and others. Ability of Serum to supply large-scale volumes triggered GAVI’s interest to contract large doses and provide advance purchase payments and guaranteed price of around $ 10 a dose. Globally, Pfizer and Moderna raced through time to release two RNA vaccines duly leveraging Billon dollar + funding from US and European Governments. Moderna and Pfizer’s German partner BioNTech are both early-stage ventures that received significant funding despite no prior record of delivering a vaccine.
Indian entities make investments in infrastructure:
BE and Aurobindo took efforts to acquire technology by licensing candidates. Aurobindo invested several million Dollars from their internal sources to create a multi-dose production facility for viral vaccines to produce 300 million doses. The facility is in near readiness to commence production. BE has committed investment to ramp up Covid vaccines’ capacity. However, these two companies took time to commence their clinical validation as they were dependent on their global licensors to generate immunogenicity data, an essential requirement for Indian regulators to let the companies pursue Phase II/III clinical trials in India.
Indian companies have also licensed three technologies indigenously developed by Indian public institutions ( CSIR/IISC et al.), but due to lack of funding support, companies never advanced these prospects seriously.
Delayed/denied investment by GOI in vaccine development and delivery:
While five private entities struggled on their own to advance products, the missing element in India as compared to the Western world is significant quantum of de-risking government funding. To produce 300 million Doses of viral vaccine, depending on the company’s platform technology, capital investment of 30 million to 40 million is needed in the Indian context. Advance purchase support from GOI would have enabled these companies to accelerate production scale-up for Indian supply as early as the last quarter of calendar 2020 with production bulking of five months before release. Government’s attention intensified when the Prime Minister visited three of the vaccine makers and highlighted potential for Indian companies to provide national and global supplies.
Indian government has two suppliers, one with limited capacity to produce vaccines with internal funding constraint and the other with larger capacity but lower inclination to commit larger doses at a price offered by GOI. The price range of Rs. 150 is a deterrent for Indian companies to supply large volumes to GOI unless they can cross-leverage supplies at a higher price of Rs. 400 to 500 in Indian private markets and upwards of $10 per dose in exports. In the absence of these two opportunities, Indian companies will be choked for financing large-scale volumes to drive Indian immunization in the next three to four months. Current price offered by GOI will be a deterrent for securing Sputnik’s supplies. While Aurobindo and BE can produce large quantities, they will be constrained by time needed to secure product approval. Indian immunization requirement for Covid is in the range of 1.3 Billion doses to cover the most vulnerable population. We will require supplies/ procurement to be enhanced to 120 to 140 million doses a month to immunize vulnerable populations over next eight months, a factor of ten-fold increase in supplies, not considering any surplus for exports. With Cadila, Aurobindo, BE, Reddys, Hetero, and Gennova, there is potential to produce 150 million doses a month over the next six months and potentially 200 million doses months after that. Such supplies are possible if all these entities invest accelerated funding to the tune of about $ 200 million in the next four months to conclude capacity expansion, while securing product approval. These entities are currently funding this capacity creation primarily from internal resources, but that is precisely the hiatus in accelerating this effort.
Current producers will significantly ramp up their supplies if they can distribute ~ 30% of their products in private market at a more competitive price, duly providing 70% supplies for government procurement. More than half of the Indian population can afford the vaccine at market prices twice of government procurement price. Such a strategy will financially help them ramp up production. Alternatively, GOI will have to step in to enhance the procurement price to make supplies competitive. The irony is that by the end of the current financial year, India will have half of the world capacity to produce Covid vaccine. However, most of the world that can afford the vaccine would have been immunized, denying Indian companies participation in the world market.
Are we immunizing the most vulnerable at a pace needed?
Indian government has adopted an approach of immunizing the population based on age classification and co-morbidities. This model is indeed adopted in US and elsewhere, but with substantial qualification. In USA, priority under Phase 1B has been given to:
Frontline essential workers such as firefighters, police officers, corrections officers, food and agricultural workers, United States Postal Service workers, manufacturing workers, grocery store workers, public transit workers, and those who work in the educational sector (teachers, support staff, and daycare workers.), almost on par with the age group of 75 plus.
US Phase 1B’s key focus is immunizing key wage earners and those contributing to vital economic output such as workforce in manufacturing entities, service providers most exposed such as retail workforce, teaching professionals, public transport workers. Unfortunately, our priority was based only on age classification (due to administrative simplicity based on Aadhar card), rather than vulnerability of exposed communities. We have seen heavy load of Covid in industrialized belts such as Pune, Thane, and Gujarat Industrial belts due to the workforce (generally in the age group of 25 to 45) working in groups and getting exposed to the virus.
If manufacturing industry can procure even 20% of the vaccine producers’ supplies, they will cover their exposed human resources, the vital asset to be operative for the economy not to falter.
India is at cross roads – we boast of largest vaccine manufacturing capacity in the world but our population is grossly underserved with less than 6% coverage. We need to act soon to ensure we immunize our population and don’t deny our enterprises the global opportunity – Dual pricing strategy and funding support to companies to ramp up capacity is urgently needed to turn the tide over next few months.
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