Healthy Skepticism Library item: 14665
Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.
Publication type: news
Merck Plans Big In The Indian Vaccine Market
TradingMarkets.com 2008 Nov 17
http://www.tradingmarkets.com/.site/news/Stock%20News/2027748/
Full text:
US pharma major Merck & Co is aiming to become the largest pharmaceutical company in the Indian vaccine market by 2013. The company, which already sells two vaccines in India, plans to expand its product range in the country. The company also plans to intensify its sales and marketing activities in India by recruiting 1,500 people in the next two years.
Merck is not the only leading multinational operating in the Indian vaccine market. British pharma giant GlaxoSmithKline Plc. has established its presence with about 10 vaccines in the market. US-based Wyeth and French company Sanofi-Aventis SA have also ventured into the country. GlaxoSmithKline and Sanofi-Aventis have also set up manufacturing facilities within India.
Opportunity For Foreign Pharma Companies
Existence of life threatening diseases, mass public health programs undertaken by the government and rising awareness levels have made India an attractive market for vaccines.
India, with population exceeding 1 billion, is the second most populous country in the world. As per the 2001 Indian Census data, a considerable 35% of the population falls in the age group of below 14 years (16% below six years). This creates huge scope in the pediatric immunization segment. Prevalence of chronic diseases such as polio, diphtheria and hepatitis has necessitated government intervention in the area of children’s vaccination. The huge success of the nationwide drive to eradicate polio and educate the masses has expanded the market for vaccines in the country.
Besides, rising education levels and increased exposure to the developed world has raised awareness among the middle class of the country. This section of the society is increasingly investing in preventive healthcare treatments, thus creating an opportunity for adult vaccine manufacturers also.
Low Price And Good Quality ‘ The Real Challenge
Government is the largest procurer of vaccines in India. Considering the widespread reach of its primary healthcare centers, manufacturers of vaccines cannot ignore supplying to the Government. Partnering with NGOs and international organizations such as WHO also become imperative to reach out to the rural population. Therefore price plays an important role in ensuring success in India.
Low cost of research and clinical trials reduces the overall cost of production of vaccines in India. At the same time, skilled human resource and state of art facilities ensures that quality is not compromised. This has significantly driven the demand for Indian vaccines in the export market. The ‘Global Vaccine Market Forecast to 2012’, a study conducted by research firm RNCOS, states that exports account for around 65% of the country’s vaccine market. India is also a major supplier to organizations such as the UNICEF. Hence given that the Indian industry is fairly mature, the real challenge faced by foreign companies is to supply superior quality vaccines at competitive prices.
However international players are bound to face tough competition from the well established domestic companies. Serum Institute of India, Panacea Biotech, Shanta Biotech and Bharat Biotech are some of the industry leaders who possess cutting edge research capabilities and manufacturing facilities in the country. On the other hand, GlaxoSmithKline and Sanofi-Aventis are the only foreign players which manufacture vaccines in India. With plants located in other countries, international pharma companies like Merck will find it difficult to maintain low price levels.
Manufacturing In India Holds The Key
If Merck & Co aims to become a market leader in vaccines in India, merely launching new products or increasing distribution network will not be sufficient. According to Amita Samant, analyst at ValueNotes, the company must either set up a plant on the Indian coast or form a joint venture with a domestic counterpart. The pharma giant must also partner with government agencies and NGOs to understand the nature of diseases prevailing in emerging and underdeveloped countries and develop specific vaccines for them. Going forward the company must also consider making India the hub for its vaccine exports.
