Who’s who in the vaccine market? A look at low- and middle-income countries

With Covid-19 becoming a big part of all our lives this past year, the vaccine market is more relevant than ever. But vaccine development is a completely different game compared with drug development; both in pathways and in players. Vaccines are one of the most cost effective and successful public health interventions, saving two to three million lives annually. In the following post, we share our experience of a few key facts bringing you up to speed on the basics of the vaccine market in low- and middle-income countries.

In 2018, the WHO estimated the global demand for vaccines to 3.5 billion annual doses excluding vaccines for oral polio vaccine, seasonal influenza vaccine, travel vaccine and military markets. This corresponds to a global market value of $26 billion. Sounds like a rather straight forward market with major needs, but it’s anything but simple due to a strong divide between high income countries and low- to middle-income countries. About 80% of global vaccine sales counted in value comes from high-income countries, primarily due to the preference of more expensive and complex vaccines. By volume sold, the high-income countries market corresponds to just about 20%. This unveils the important disparity that steers all key players on the vaccine market.

Game-setters: The buyers and regulators

You may be familiar with the pharma industry where the buyers of established drugs are hospitals and clinics, financial players, doctors or even patients themselves. In the vaccine market, it is instead large organizations such as UNICEF and PAHO that usually procure and distribute vaccines developed by a vaccine developer. It is the WHO, the national immunization technical advisory and regulatory authorities that have significant influence in determining the global vaccine demand by setting the agenda, immunization policies and programs, especially in low- and middle-income countries.

Regulatory and advisory bodies such as the US FDA, EMA and WHO have the important role of overseeing vaccine quality and safety. NGOs such as UNICEF and PAHO (Pan American Health Organization) function as pooled procurement organizations and are highly involved in a centralized vaccine procurement process. UNICEF procure vaccines for approximately 100 countries and PAHO procures for about 40 countries. Governments and private sector actors are involved to a varying extent as well. As an actor looking to sell vaccines, you should be aware that an estimated 5 to 10% of the total vaccine sales in developing countries are through the private sector. Thus, the private sector is very small in developing countries in general, however, some countries with rapid economic growth have a demand for new vaccines, as well as vaccines that are not included in the WHO standard vaccination program. These new and extended vaccines (the HPV vaccine being one example) would primarily be bought through the private sector.

A as a vaccine developer, you need to keep in mind that low- and middle-income countries together with their donors have a major influence on these discussions since 80% of the vaccine volume is purchased by these countries.

The producers

International quality standards are set by the WHO and all vaccine producers need to comply with these standards, which only a few does. As a consequence, about 80% of the global vaccine sales come from five Big Pharma companies. These Big Pharma tend to focus their in-house production on avcanced multivalent vaccines high income countries. For low- and middle-income they often go for a strategy where they do a technology transfer to local players for production and sales, since the products differ both in content (lower valencies) and in packaging. Thus, producers focused on low- and middle-income countries have a significant role in production of monovalent and certain combination vaccines and in terms of volume of doses, they supply roughly 50% of UNICEFs procured doses. Through this, the vaccine market landscape in low- and middle-income countries have changed by increased competition and increased supplier capabilities resulting in reduced vaccine prices; benefitting people across the globe.

The donors 

Donors are an essential part of the vaccine market for low- and middle-income countries as they make it possible for large organizations to run their agenda. Large donors include organizations like the Bill & Melinda Gates Foundation, but also many high income countries.

Implications for vaccine developers

High-income countries have different demands of vaccines compared with low- and middle-income countries countries in terms of desired formulations, in terms of valency and vaccine type, as well as packaging. This gives the vaccine producers a chance to change pricing for the different products and to avoid unprofitable parallel trade between countries. However, since this might increase the frequency of technology transfer to producers that target low- and middle-income countries as mentioned above, the price may decrease due to the increased manufacturing capabilities this offers. As a vaccine developer, it is essential to know who you’re targeting and make adjustments in manufacturing accordingly.

As mentioned above, high income countries have historically purchased more complex and expansive vaccines, e.g. with higher valencies and vaccines that are not included in the standard vaccination program. However, newer vaccines such as the rotavirus, pneumococcal and HPV vaccines that are being implemented with the help of donors, are being implemented at approximately the same pace. This is a game-changer for vaccine developers, since some advanced vaccines can be assumed to be implemented in a higher pace than generally assumed in previous years.

Since the vaccine market consists of few players (especially producers), there is a need for continuous discussions and balancing of demand and supply between different actors. And as a vaccine developer, you need to keep in mind that low- and middle-income countries together with their donors have a major influence on these discussions since 80% of the vaccine volume is purchased by these countries.