Vaccines Market Opportunity Assessment With focus on HBV & Influenza Vaccines Market Asia Pacific

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Presentation includes an overview of the current market scenario for vaccines and key trends across all countries. The presentation also includes a discussion on the influenza vaccine market.

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Vaccines Market Opportunity Assessment With focus on HBV & Influenza Vaccines Market Asia Pacific

  1. 1. Vaccines Market Opportunity Assessment With focus on HBV & Influenza Vaccines Market Asia Pacific
  2. 2. 02• Executive Summary Key Findings 2
  3. 3. Executive Summary: Key Findings The key Asia Pacific markets have an estimated vaccine market size of USD 2.3 billion in 2008 (50% of which is Japan), and this is forecast to grow to USD 3.0 billion by 2010. Approximately two thirds of this market consists primarily of prophylactic vaccines (mainly paediatric), which have some form of reimbursement or subsidy from most Governments Prevention programs are high on the agenda of all Governments, and neonatal vaccinations programs are either in place, or will soon be in place for major preventive diseases like Hepatitis B. This is expected to lead to a drop in incidence over the next 20 years. However, programs for vaccines like pneumonia are not in place, and depend on patient awareness (which is low) Markets like China, India and Japan are dominated by local players, while Hong Kong, Korea, Taiwan and Thailand are dominated by MNCs. Public-private partnerships are the trend in Asia, and is one of the factors for successful market penetration, especially in China and Japan. China, India and Japan have numerous local R&D based players that have strong pipelines with innovative vaccines, and these local production lines are expected to boost market supply of vaccines significantly by 2012 Physician choice vaccines is primarily driven by Government policies and relationship with Government/state, and this is a crucial factor to success. The public sector is the highest user of vaccines – the private market is relatively low (<30% of value) with the exception of Korea Pricing of vaccines purchased by the Government is very low at ~10% of the private market price (e.g. ~ USD 3-9 per course of HBV prophylactic vaccines, while cost in the private market is approximately USD 30-90 per course) 3
  4. 4. Vaccine Market Size Overview of trends by market segment Asia Pacific Vaccine Market Revenues (2007 - 2011) 14 0 0 2007 Japan : US$ 1.1 bn. 12 0 0 2011 CAGR: 9.9% South Korea : US$ 285.0 mn. Japan Revenues (USD) mn 10 0 0 2007: 1.1 billion CAGR: 12% China : US$ 643 mn. 2011: 1.5 billion CAGR: 15% Taiwan : 44.4 mn 800 India : US$ 70 mn. CAGR: 10% CAGR: 4 % Hong Kong : 15.0 mn 600 CAGR: 9% Thailand : US$ 48.0 400 mn. CAGR: 12 % 200 0 S out h C hi na T a i wa n H o ng I ndi a Tha i l a nd K or e a K o ng •Japan remains the largest vaccine market with revenues of ~USD 1.1 billion in 2007. China is the 2nd largest and fastest growing market, and is expected to be worth between 1.4 to 1.7 billion USD by 2011, and could potentially be Asia’s largest market. • India’s market revenue is difficult to estimate, as the bulk of local manufacturing is exported. Local prices are very low, and it is estimated at US$70million in 2007. • China and India are rapidly developing as vaccine production hubs in order to cope with the strong local demand and capitalize on increasing market potential. Local players play a key role in these markets, producing vaccines at lower costs and creating stiff competition for leading multinationals for key disease indications. •South Korea also has a booming vaccines market comprising of a reimbursed market for major vaccines, and a strong private market. Market growth has averaged 12 percent annually and there is a strong private market and population with sufficient purchasing power for newer adult and therapeutic vaccines which show promise to grow over time. • Thailand’s vaccine market is currently valued at approximately USD 48 million and is heavily subsidized by the government, with Sanofi Pasteur and GSK being the major market participants. • Approximately 90% of volume use in Asia is through public programs. However, in terms of value, it represents ~70% of the market. Sources: China – Frost & Sullivan, India – IMS, South Korea-Korea Medical Device Association, Japan-Ministry of Health Labour and Welfare (MHLW), Taiwan – Import 4 statistics, Thailand – Frost & Sullivan., Frost & Sullivan primary research
  5. 5. Country/Sector attractiveness For further discussion This cluster of countries mainly import vaccines, but have some limited local production. Post 2009, Import based market Korea, Thailand and Taiwan all plan to increase HONG local production capacity to decrease reliance on vs predominantly KONG imported products. Korea and Taiwan – key local manufacturing, vaccines are all reimbursed. Strong private market strong MNC for new vaccines with proven effects, e.g. HPV. competition Thailand and Hong Kong have smaller local markets KOREA – reluctance of patients to pay for vaccines THAILAND Competitive Intensity TAIWAN JAPAN Protective market – CHINA 98% dominated by local production. Use of older, less innovative products. Potential plans to make foreign products more easily available through simplification of regulations INDIA China & India have >30 local manufacturers, Strong local of which 5-6 are dominant market players production and with >50% market share. High pipeline for manufacturing capacity and R&D local competition Optimally specified Market need vs gaps Underspecified products Size of bubble products (Low gap) (High gap/unmet need) represents market potential/size Sources: Secondary research, stakeholder interviews, Frost & Sullivan team analysis 5
  6. 6. Market attractiveness & clusters identified (2007-2011) • Governments in Asia have vaccines and prevention of diseases as priority areas in the next 5 years • Relationships PEST growth • Increasing spending power of middle class, and availability of private insurance with Government Drivers • Slow increasing awareness of the necessary of vaccinations, specifically and policy makers amongst urban areas is crucial to enable • Strong local R&D to produce innovative vaccines, and increase local production strong market penetration and • Limited change in countries that have had vaccination programs in place for reach to more than 10 years (e.g. Korea and Taiwan) physicians in key Regulatory • Increase in coverage of mandatory vaccines to expand to additional vaccine Asian countries Changes & types (e.g. China – up to 12 vaccines on national list). Strong grounding of neonatal vaccination programs in all countries. • Products need to Requirements • Preference to public-private partnerships (China, Japan) be in line with • More transparent regulations to enable foreign players international Value (‘000) CAGR (‘07-08) Key Players guideline Segment recommendations GSK Sanofi Pasteur Market & HBV 450 HBV MSD •Subsequent to Competitive Wyeth that, market Influenza 300 Influenza Landscape* Berna Biotech potential & growth Shanta Biotech HPV 150 HPV China state will be dependant 0 200 400 600 on creating 0% 10% 20% 30% awareness Gap Value Proposition amongst potential • Combination vaccines • Ability to produce single dose or Discontinuities users/consumers • Compliance of multiple dose vaccines combination vaccines for non-mandatory (Gaps) & • Efficacy of current vaccines • 100% efficacy vaccines vaccines Opportunities • Public awareness on need for • Short lead time on manufacturing vaccination to enable easy supply & storage *Numbers to be confirmed 6
  7. 7. Market Capacity & Competition COUNTRY Current (2008) Future (2010 onwards) • 33 local manufacturers (including 6 local state- owned giants, and rest with <15 million revenues) able to produce 49 kinds of vaccines. • Low unmet market need • High local production capability (>1 billion doses) CHINA • Multinational players with public partnerships (e.g. • Continue to be Government Sanofi Pasteur partnership with Shenzhen state regulated market (control number of Govt) vaccines available, especially from • National vaccine program covers 12 vaccines (USD foreign players) 400 million allocated in funding) • High local production capacity • High local R&D • 25 local manufacturers, produce high quality vaccines for local and export markets (WHO) • Low patient awareness and INDIA • Local Government funding for local manufacturers willingness to pay for R&D • Local production meets 98% of market needs • Plan to regulate production of influenza • Low penetration of multinational players vaccine to prevent oversupply • Antiquated vaccination programs – low • R&D and production of pandemic vaccine is Government support a national project – funded by Government JAPAN • High number of liver cancer cases and mortality • Open to foreign players, but still primarily • Influenza: Produced 25 million doses in 06/07, local dominated market used 19 million 7
  8. 8. Market Capacity & Competition COUNTRY Current (2008) Future (2010 onwards) • Multinational player dominance (e.g. • No specific plan for vaccination of Engerix is market leader for Hep B) HBV carriers (Korea – plan for reimbursed booster dose to reduce TAIWAN carrier rate of HBV) • Low local manufacturing (only 1 major local manufacturer in each country) • Declining carrier market for Korea KOREA • Reimbursed/subsidised neonatal and Taiwan (impact of vaccination) vaccination programs in place (most • Hong Kong expanding influenza successful in Korea, followed by Taiwan) vaccination to children <12 years for HONG KONG free (budget of 100 mio HKD) • Korea: Private market with capacity to pay for products that have high awareness and unmet need (e.g. Gardasil success in • Local production for influenza in THAILAND Korea through patient campaigns) Korea, Taiwan and Thailand • Korea and Taiwan: Strong reimbursement • Potential influx of vaccines from China (into Hong Kong) programs 8
  9. 9. Strategic overview: Influenza profile How to compete Product Evaluation • Data proving efficacy • High patient awareness • Current profile seen as high potential for use • Public-private partnerships – but will have high dependance on patient • Reasonable cost (current at US$11 – 46 per dose – awareness, perceived need for use and cost considered high) • Need to be able to quickly expand manufacturing • Following are seen as high potential capacity to other lines advantages: • Short, quick production time (from a policy Risks maker perspective) • Non-needle delivery • Very low patient awareness and perceived need on • Non-refrigeration storage influenza vaccines – will take large scale patients awareness programs/campaigns and years to see • Non egg-based awareness growth (low penetration currently <3% of • Protection against seasonal strains population) • Seasonal – interrupted demand, unable to predict use • Areas of improvement needed to make it a (e.g. Korea had oversupply in ’07 with 15 million high potential use product: doses) • Long protection per dose (as compared to • Local manufacturing coming into play by 2009-2012 current annual dosing) of ~ 5 years in countries that don’t already have them (Korea, • Multiple strain coverage Taiwan, e.g. Thailand will be able to produce 2 million • Long shelf like (>9 months) doses annual in 5 years) • Efficacy (>80%) – trial results show efficacy • Strong local R&D & production in India and China only vs placebo (future requirement estimated at 65 million units, 25 million expected to be met by Sanofi Pasteur- Shenzhen JV plant. Capacity to produce 50 million doses by 2025) 9
  10. 10. Necessary evolvement to fit market needs 2012 2010 Stage 3 Stage 2 Structure: 2008 Product ready for distribution, structure in Stage 1 Technology: Product in place for POV, private line with market market needs/improvements/ policy in place (Post 2012 market is expected to be too Production planned crowded – need early People: (based on market mover advantage) Need to identify and assessment of establish local epidemiology, relationships with competition, uptake, Government and policy policy) makers VACCINE MARKETS IN ASIA HAVE WELL ESTABLISHED PLAYERS WHO HAVE PUT SOUND INVESTMENTS AND RELATIONSHIPS IN PLACE. IT WILL TAKE MORE THAN A GOOD PRODUCT TO PENETRATE THIS MARKET – REQUIRES LONG TERM COMMITMENT, PATIENT AWARENESS, FUNDING AND PEOPLE ON THE GROUND TO WORK WITH LOCAL GOVERNMENTS TO ENSURE UPTAKE AND ACCESS TO PRODUCTS 10
  11. 11. 03• Asia Pacific Vaccines Market Overview This section presents an overview of the current market scenario for vaccines and key trends across all countries 11
  12. 12. Vaccines Market Outlook Overview of trends by market segment • The vaccines market can be segmented into 3 major areas, pediatric, adult and therapeutic vaccines. However definitions within these categories differ by country. For example, in Japan all cancer related (e.g. Gardasil) and hepatitis vaccines are categorized as therapeutic, even though their mode of action is primarily prophylactic. •Pediatric vaccines are still the mainstay of the market in APAC and generally account for more than 60 percent of total market revenues. The primary drivers of this has been the implementation of national level immunization programs that cover the comprehensive range of pediatric vaccines until age 12. Across most countries these vaccinations are provided FOC or subsidized to increase compliance. • The influenza and combination vaccines vaccines market shows the most strong growth potential over the short term, due primarily heavy investments in influenza preparedness and increasing recommendations for annual flu vaccination driving up demand. • Therapeutic vaccines market is still in its infancy or non-existent in most countries. The use of therapeutic vaccines is expected to be more of long term prospect and targeted primarily at the private market. Asia Pacific Vaccines Market Breakdown by Key Segments (2007) US$ 1.1 bn. J a pa n USD 285 mn S out h Kor e a US$ 624 mn. Chi na US$ 44 T a i wa n bn. US$ 15 Hong K ong bn. US$ 70 mn. I ndi a US$ 48 Tha i l a nd mn. 0% 10 % 20% 30% 40% 50% 60% 70% 80% 90% 10 0 % Ped iat r ic V accines A d ult V acci nes T her ap eut ic V acci nes 12
  13. 13. Healthcare and Demographic Indicators Particulars Japan South China Taiwan Hong Kong India Thailand Korea Population 127.4 48.1 1,321.8 22.9 6.9 1,131.3 65.6 Birth rate (per 1000) 8.4 4.5 12.1 9.0 10.2 22.3 13.7 Population growth rate 0.5% 2.4% 5.3% 0.3% 0.1% 1.6% 0.7% Infant Mortality rate (per 1000) NA 4.5 19.0 6.5 5.8 34.6 18.0 Life expectancy (female) 85.5 80.9 73.3 80.7 85.4 65.3 70.2 Life expectancy (male) 78.5 73.9 69.6 74.7 79.3 67.2 75.0 Healthcare Infrastructure Public Hospitals 1,656 158 15,616 *24 41 166,993 1,871 Private Hospitals 7,370 1,331 3,575 **55 12 13,203 475 Health Clinics (government) 97,442 3,445 122,023 ***344 90 30,000 9,765 Private Clinics 98,609 26,119 156,844 18,667 NA NA 14,953 Healthcare Financing Total Healthcare Expenditure (USD) bn 406.6 41.8 152.9 23.8 10.2 59.8 9.3 Public Healthcare Expenditure (USD) 327.0 48.4 12.0 bn 21.7 14.9 4.3 3.6 Private Healthcare Expenditure (USD) 79.6 104.5 47.8 bn 20.1 8.9 5.9 5.6 Per Capita Healthcare Expenditure 2,918.0 1,318.0 116.0 981.2 1,857 54.0 141.3 (USD) Japan, South Korea, Taiwan and Hong Kong have the highest per incomes among the countries surveyed. As developed market, these countries have strong healthcare infrastructure and well established immunization guidelines and strong healthcare access. China, India and Thailand are more populous countries, with less well established infrastructure. However, strong population and economic growth has been coupled with strong investment in healthcare related expenditure, this coupled with growing privatization of healthcare services creates strong market potential in these countries. Legend: * Medical Centers, ** Regional Hospitals, *** District Hospitals Source : Frost & Sullivan (Base Year : 2007) 13
  14. 14. Market Segmentation & Snapshot TYPE C TYPE A TYPE B Universal Coverage, High Growth &Volume Potential for Penetration High Demand China, India & Thailand Japan South Korea, Taiwan & Hong Kong Large market size reflective of large Market Size, Revenues Large market size due to mature market Moderately sized market that are reaching population heterologously distributed and Demand status. maturity and are increasingly competitive. population with high birth rates. Market growth is anticipated to remain Market Growth over the Strong market growth anticipated Moderate growth <10% expected to between 10-12 percent annually, driven next 5 years throughout the forecast period > 15 percent. sustain over the forecast period. primarily by adult and therapeutic market growth. Current vaccination guidelines recommend Pediatric vaccines account for 65%or more Pediatric vaccine market represents > 70-80 the usage of out-dated vaccines. Market is of the market – combi-vaccines. However, Vaccine Usage Trends percent of market volume. Low penetration likely to see a shift to newer products if adult and therapeutic vaccines are begin to of adult & therapeutic vaccines. appropriate legislation is approved. penetrate the market. Pricing controls are in place for key The pricing structure of key vaccines is High price sensitivity with central vaccinations within the national vaccination determined by pricing controls put into Price Sensitivity government playing role in large quantity schedule. Out-of-pocket vaccination costs place by the local universal healthcare based tender purchases. are among the highest in Asia. system. Key vaccinations in the national schedule Universal healthcare coverage subsidizes Subsidization of key childhood vaccinations are fully subsidized However the number Reimbursement Status or reimburses a larger range of only. Adult vaccinations e.g. Influenza, Hep of disease indications covered under the (Current) national schedule are less than vaccinations, including those in then B may be subsidized for high risk groups. international standards. national schedule. Strong local production (except TH) for International manufacturers still dominate vaccines through private & gov. linked Market is dominated by local domestic Competitive Landscape the market with strong local production entities. Focus on high volume production producers. Foreign penetration is < 2%. only in SK. with low cost products. Combination vaccines, Influenza, Hep B Key Growth Segments Combination vaccines, Influenza HPV, Pneumococcal vaccines (China) 14
  15. 15. Drivers & Restraints of Type A Markets (China, India & Thailand) The high population demographic within the 0-6 years and < 12 years segment drives a high volume demand for pediatric vaccinations. Threat of pandemics (e.g influenza) drive investment in vaccine manufacturing self sustainability Government initiatives encourage local based production as well as research and DRIVERS development to meet local needs Private-public partnerships provide source of funds for immunization programs and initiatives IMPACT RESTRAINTS Lack of awareness of Lack of comprehensive healthcare immunization creates low infrastructure limits accessibility demand for vaccines and reach of immunization especially for non- programs mandatory/optional vaccinations Low purchasing power creates a high price sensitivity which drives down profit margins for vaccine manufacturers 15
  16. 16. Drivers & Restraints of Type B Markets Growing elderly population creates a demand for annual adult vaccinations Combination vaccinations are not widely available in the local market in spite of the demand and projected growth in the pediatric vaccines market. Increasing initiatives from the Ministry of Health Labour and Welfare (MHLW) DRIVERS to promote increased innovation in the local vaccine production industry through research and development IMPACT RESTRAINTS The current healthcare and reimbursement in Japan is focused primarily treatment based medicine. And Lack of alignment of local vaccination thus preventative treatments such as vaccinations guidelines to international standards have not been very well received. has created a lack of innovation in the local vaccine production industry and lack of penetration of new innovative vaccines to the market. 16
  17. 17. Drivers & Restraints of Type C Markets Universal healthcare coverage through social health insurance scheme which provides subsidization and reimbursement for basic scheduled vaccinations High per capita expenditure on healthcare and demand for private healthcare services Strong consumer awareness drives up demand for both DRIVERS therapeutic and combination Government initiatives vaccines focused on preventive healthcare drive investment in vaccination programs IMPACT RESTRAINTS Low public awareness hinders growth of non-mandatory/ scheduled vaccinations Highly competitive market due to large number of market participants 17
  18. 18. Disease and Immunization Trends Reported cases of key vaccine preventable diseases Disease Indication Japan South Korea China Taiwan Hong Kong Thailand Chicken Pox (Varicella) 264,915 20284 0 17,949 61861 Cholera 47 7 1,094,402 0 3 986 Hepatitis A 79,349 202 67 372 Hepatitis B 316 1,327,225 196 74 4088 HIV 225 7,803 1978 414 9300 HPV (cervical cancer) 638,390 4658 Influenza 62,067 0 1 17311 Japanese Encephalitis 899,339 7 4,660 37 2 44 Measles 194 114,002 7 88 3256 Meningococcus 519 4 1,288 21 2 Mumps 4,557 292,964 11 181 9246 Pertusis 200,345 14 2,829 41 31 27 Pneumococcus 1,504 14 2,829 139028 Rotavirus - 0 3,399 NA Rubella 2 35 589,864 53 38 305 Shingella N/A 131 49,920 246 67 NA Tetanus (neonatal) 509 131 371,598 0 4 Tetanus (total) 8 1,988 10 1 NA Yellow Fever (Dengue) N/A 97 0 0 0 25361 18
  19. 19. Disease and Immunization Trends Country specific trends CHINA JAPAN - China is also a potential hotspot for emerging infectious diseases with high incidence rate of mumps, varicella, rotavirus infections - 08 : Measles was re-designated as and shingella in 2008. a notifiable infectious disease. 2,648 cases between Jan-Mar 08 - Influenza remains a pandemic concern with China, increasing the alone demand for vaccinations which are provided free to high risk groups. - Strengthening of surveillance & increased vaccination ( with MR vaccine) INDIA - Outbreak of pertusis in 2007, over - India remains a hotspot for infectious 200 confirmed cases with a higher diseases with current immunization lacking percentage (31%) of adults the penetration and reach to achieve effective affected elimination due to disparate healthcare access - Over 1,0 million influenza cases of large proportion of the population. are reported annually through the - Measles, hepatitis B, polio, and tuberculosis sentinel system however less than are still areas for concern. 50% of the population over 65 are in compliance with annual -The threat of increased zooneses includihg vaccination under the Preventive influenza, leptospirosis, rabies and anthrax Vaccination Law. have occurred. - In 2008 alone, outbreaks of anthrax have occurred in 3 India states. HONG KONG TAIWAN - Influenza outbreaks remain a key - Measles, mumps, varicella SOUTH KOREA THAILAND area of concern with the latest occur in sporadic outbreaks - Outbreaks of measles, influenza outbreak occurring in early in Taiwan in spite of strong mumps and varicella are on - Influenza remains a key concern in the February 2008 – forcing even school vaccination coverage. the increase. Thailand market with approximately closures. ‘Importation” of the disease 150,000 to 600,000 cases annually in - Overall, immunization from neighboring China and 2007 - The annual Influenza Vaccination penetration is high but Japan has also occurred. Program was has successfully sporadic outbreaks have -AIDS and HBV continue to be areas of administered over 275,000 flu - Strong influenza occurred. concern, while outbreaks of measles vaccine doses to eligible, high risk surveillance and vaccinations and mumps do occur. target groups in year 2007 alone. has seen a decrease in number of reported cases - SARS which drew critical concern in between 2007 and 2008. year 2003, has no new reported incidence so far, but it is still the most threatening disease outbreak ever. 19
  20. 20. Disease and Immunization Trends Percentage of target population immunized against key diseases Percentage of Target Population Immunized (%) Japan’s immunization schedules and vaccine specifications differ from WHO and international standards. Lack of innovation has hampered innovative vaccine development. Lower coverage and the use of Japan outdated vaccines have led to a higher incidence of outbreaks of preventable diseases that would be expected in a developed country. South Korea has a strong immunization program and coverage – with immunizations with the NIP being subsidized by central and local South Korea governments. Immunization coverage in China high with national immunization schedule being effectively administered through China’s Center for China Disease Control (CDC) network. Pol3 MCV Taiwan has also achieved strong immunization coverage with all HepB3 scheduled vaccinations being subsidized through the NHI and provided through public hospitals and health centers. Taiwan DTP3 DTP1 Hong Kong has also achieved high immunization coverage. Vaccinations BCG for key diseases in the national immunization schedule are provided free-of-charge. A recent change in the recommended immunization Hong Kong schedule in 2006 to utilize more combination vaccines has been well received. Vaccination coverage in India has yet to achieve levels above 90 India percent. This is due to disparate healthcare access across states and also the lack comprehensive reporting and monitoring systems which hampers analysis of the effectiveness of the monitoring activities. Thailand Thailand has achieved very high levels of immunization coverage through extensive government funded immunization initiatives. The vaccine market is been heavily dependent on government funding, with the private market still in its infancy. The government introduced 30THB 50 60 70 80 90 100 universal healthcare scheme helped improve coverage from 76 percent to 96 percent since 2002. The Thai system has been so successful I t has Percentage of the population immunized (%) been recommended as role model for other low income countries. by key antigens Source : WHO (2006) F&S note: Immunization coverage figures presented here are sourced from WHO and UNICEF. Coverage representation is at a national level, however, reporting coverage may be incomplete due to lack of surveillance data. Immunization coverage is also mainly for pediatric vaccinations and does not cover 20 adult vaccinations.
  21. 21. Reimbursement & Pricing Scenario Disease Indication Japan South Korea China Taiwan Hong Kong India Thailand Reimburs BCG Reimbursed Subsidized Subsidized Reimbursed Reimbursed Subsidized ed Chicken Pox (Varicella) Self Paid Subsidized Self Paid Reimbursed Self Paid Self Paid Self Paid PEDIATRIC Reimburs Diphtheria Reimbursed Subsidized Subsidized Reimbursed Reimbursed Subsidized ed VACCINES Haem. Influ. Self Paid Subsidized Self Paid Self Paid Self Paid Self Paid Reimburs Type B ed Subsidized PEDIATRIC vaccines in the national immunization for schedules are generally reimbursed (BCG, DPT, Hepatitis A Self Paid Self Paid children Self Paid Self Paid Self Paid Self Paid MMR, HepB, OPV). Type C markets are generally shifting to higher usage of combination vaccines with the inclusion of these in national level Subsidized immunization programs with reimbursement. for Reimburs Meningococcal vaccinations are also increasingly Hepatitis B Self Paid Subsidized children Reimbursed Self Paid Self Paid ed being reimbursed. HPV (cervical cancer) NA Self Paid Self Paid Self Paid Self Paid Reimbursed Reimburs Influenza (>65 yrs) Self Paid Self Paid Self Paid Self Paid Self Paid ed ADULT VACCINES (Inactive (Inactive Japanese only) only) Encephalitis Reimbursed Subsidized Subsidized Subsidized Self Paid Self Paid Self Paid Reimburs Measles Reimbursed Subsidized Subsidized Reimbursed Reimbursed Subsidized ed Most adult vaccinations are not reimbursed with Meningococcal Self Paid Subsidized Subsidized Reimbursed Self Paid Self Paid Self Paid the exception of influenza vaccinations for the elderly and high risk groups which are increasingly Reimburs being reimbursed. Mumps Self Paid Subsidized Subsidized Reimbursed Reimbursed Self Paid ed Reimburse Reimburs Pertusis Reimbursed Subsidized Subsidized Reimbursed Reimbursed d ed THERAPEUTIC Pneumococcus Self Paid Self Paid Self Paid Self Paid Self Paid Self Paid Self Paid VACCINES Reimburs Poliomyelitis Reimbursed Subsidized Subsidized Reimbursed Reimbursed Subsidized ed Rabies Self Paid Self Paid Self Paid Self Paid Self Paid Self Paid Self Paid Rotavirus NA NA NA NA NA NA NA Currently, all therapeutic vaccines are self paid, although there have been moves by advocacy Reimburs groups to promote inclusion into national; level Rubella Reimbursed Subsidized Subsidized Reimbursed Reimbursed Subsidized ed immunization programs, the high cost per dose Tetanus Reimburs remains the key barrier. (neonatal) Reimbursed Subsidized Subsidized Reimbursed Reimbursed Subsidized ed 21
  22. 22. Reimbursement Scenario Self paid (out-of-pocket) vs reimbursement scenario COUNTRY Reimbursement Scenario Out-of-Pocket / Self Paid All scheduled vaccinations are fully reimbursed by the There are several vaccinations that are recommended but are government, however, vaccinations have to obtained within the not mandatory under the national schedule that are self paid. JAPAN scheduled time frame (of the national schedule) after which the These include annual influenza shots, chicken pox and hepatitis cost of immunization will be self borne. B are among the most common self paid for vaccinations. Though there is no public reimbursement system. However, the The majority of South Koreans opt for self paid private channels central government subsidizes vaccine supply to the local for vaccinations (60 percent), as the access to public health SOUTH KOREA governments who in turn subsidize the cost of providing the centers is not always convenient Recommended and other vaccinations at a provincial level at public health centers. optional vaccinations are self paid and not reimbursed. The CDC network provides vaccinations under the national Optional vaccinations that are recommended but not mandatory immunization schedule free of charge through its extensive under the national immunization schedule as well as non- CHINA network. recommended vaccinations are all borne as out-of –pocket expenses. All vaccinations within the national immunization schedule are Vaccinations not with the national immunization schedule, or fully reimbursed under the NHI. that are recommended as optional vaccination are borne as out- TAIWAN of-pocket expenses. The Childhood Immunization Program provides full Vaccinations against other diseases (optional, recommended or immunization covers vaccinations for children up to the age of travelers vaccinations) could visit private institutions in which HONG KONG 12. Free influenza vaccinations are provided to the public who the vaccinations will be charged at different rates. meet certain requirements (high risk groups). Basic pediatric vaccinations under the national immunization Vaccinations not in the national immunization schedule and schedule are subsidized and provided FOC through public health recommended vaccinations are borne as out of pocket INDIA clinics and vaccination camps. expenses. There is no centralized reimbursement system. All of immunization vaccines in EPI are reimbursable as it is Non reimbursable vaccine which are self paid include vaccines covered by 30 baht scheme by NSHO (National Security Health not listed in the EPI, vaccinations take at private clinics or THAILAND Office). However these are provided by public sector only. hospitals as well as certain combined vaccines. Source : Frost & Sullivan 22
  23. 23. Competitive Landscape – Approved Vaccines by Market Tier 1 : Leading Multi-nationals GSK Sanofi Pasteur Merck DT (Dipthera-Tetanus) DTaP DTaP-Hib DTaP-Hib-IPV DTaP-Hib-IPV-HepB DTap-IPV Hemorrhagic Fever HepA HepB HepA+HepB HepA+Hib Source : Frost & Sullivan 23
  24. 24. Competitive Landscape – Approved Vaccines by Market Tier 1 : Leading Multi-nationals GSK Sanofi Pasteur Merck Hib Influenza HPV IPV OPV Meningococcal MMR Pnemococcal Rabies Rotavirus Tetanus Typhoid Varicella Source : Frost & Sullivan 24
  25. 25. Leading Approved Vaccines by Country Vaccine Name / Type` Japan South Korea China Taiwan India BCG Japan B.C.G Statens Serum Institute, SSI, SXIBP, LIBP, CIBP, Serum Institute Japan B.C.G. SIBP, CCIBP, BIBP Adimmune Corp. DT (Dipthera-Tetanus) Takeda SK Chemical Serum Institute GSK DTaP Takeda Boryung Biopharma, highly competitive Sanofi Pasteur Korea Vaccine GSK GSK, Sinovac, HepA Kaketsuken GSK Bernabiotec, Zhejing GSK Pukang GSK HepB MSD (Banyu) Bernabiotech Korea, Shenzhen Kangtai, GSK, Serum Institute, Korea Vaccine Beijing Tiantan, SIBP GSK Wockhardt HepA+HepB GSK GSK Hib GSK GSK GSK,Wyeth GSK JE Takeda CIBP, Beijing Tiantan Adimmune Corp. Shantha Biotech Influenza Korea Vaccine LIBP, Ealong, GSK, Adimmune Corp., GSK, GSK, Sanofi Pasteur Sanofi, Novartis Novartis, Sanofi Pasteur HPV MSD Polio Japan Polio Sanofi Pasteur Bio Med, Panacea Biotech GSK Meningoccocal GSK, Wyeth LIBP, Sanofi Sanofi Pasteur Takeda (individual Beijing Tiantan, MSD, MMR vaccines for each GSK GSK Serum Institute indication) GSK Pnemococcal Wyeth Wyeth CIBP Wyeth Rotavirus MSD GSK Typhoid GSK, Sanofi Adventis Boryung Biopharma SIBP,LIBP,CIBP Cadila Pharma, GSK, VHB Lifesciences, Zydus Cadila Varicella Handaibiken Bernabiotech Korea, GSK Korea Vaccine Source : Frost & Sullivan 25
  26. 26. Competitor Profiles Leading MNC players Asia Pacific Product Key Products presence by country Range Boostrix (DTP), Infanrix (DTP), Havrix GSK 19 (HepA), Fluarix (Influenza), Priorix (MMR), Engerix-B (HepB) Avaxim (HepA), VaxiGrip (Influenza), Sanofi 24 Fluzone (Influenza), Pasteur VAQTA (HepA), MMR-II (MMR), Pneumovax Merck 9 (Pnemococcal), Gardasil (HPV) BCG (tuberculosis), Prevnar Wyeth 3 (meningococcal) Epaxal (HepA), Hepavax (HepB), Inflexal Bernabiotec 10 (Influenza), Gripvax (Influenza) Recent Approvals and Trends - GSK’s Rotarix was recently approved in South Korea (Mar-08) while Cervarix has been approved in Hong Kong, Taiwan and South Korea. Cervarix has recently been submitted for approval in Japan. - MSD has already pursued approval in Thailand, Taiwan, and South Korea for Gardasil, and is currently pursuing approval for use in older women within the age bracket of 30-45 years. -Sanofi Pasteur leads the market in influenza vaccines and has invested heavily in a USD 100 million production facility in China to produce 25 million doses annually by 2012. - Wyeth’s key product across all markets where it is approved is Prevnar. Prevnar has been recently submitted for pre-qualification status with WHO in order to gain access to inclusion in mass immunization programs. Source : Frost & Sullivan 26
  27. 27. Profile of Global Players All global players have private-public partnerships or joint ventures in key markets like China and Japan Merck & Co expects the sales of its In terms of revenues, GSK With a 20% share in 2006, Sanofi vaccines in 2007 to be in the Biologicals is the largest player Pasteur is the second largest range of $2.8-3.2 billion, up in the global vaccines market. player in the global vaccines from a figure of $1.7 billion in market. 2006 (an increase of 73% on GSK Biologicals had around 23% 2005). share in the global vaccines Sanofi Pasteur, together with its market in 2006. European joint venture with Merck in 2005/2006 launched three Merck & Co, Sanofi Pasteur vaccines: Gardasil for cervical GSK Biologicals is set to become an MSD, is a leader in flu cancer/human papilloma virus, increasingly important part of vaccines. RotaTeq for childhood GSK's business and has been diarrhoea caused by rotavirus, transformed from a tiny In 2006, Sanofi Pasteur accounted and Zostavax for shingles. company with one product and for 8.9% of Sanofi-Aventis' $3 million in revenues, into a sales. With around a 10-12% share, Merck $2 billion behemoth is the fourth largest player in Sanofi Pasteur is well-positioned for the global vaccines market With six vaccines in late-stage growth, as it has a leadership development , GSK's vaccines position in influenza, The joint venture with Sanofi- business has doubled in meningitis and boosters, and is Pasteur in Europe (Sanofi- growth over the past five years also strong in polio, Pertussis Pasteur MSD), has given Merck and the company expects it to and Hib with at least two major a major strategic edge in double again over the coming product launches anticipated in penetrating in the European five years. these areas during 2007 market. 27
  28. 28. Profile of Regional Players • As the largest vaccine market player in terms of revenue in Japan, Takeda Serum Institute of India Sinovac Biotech Pharmaceutical Company Limited is a research-based global pharmaceutical company. • Serum Institute of India was • Sinovac Biotech Ltd.specializes in founded in 1966 the research, development, • Offering a range of vaccines that commercialization, and sales of covers in immunization schedule such • Serum Institute has established human vaccines for infectious as DPT vaccine, DT vaccine, Measles itself as the world's largest producer illnesses such as Hepatitis A and Vaccine, Tetanus vaccine, Rubella, of Measles and DTP group of Hepatitis B, influenza and “SARS”. Mumps, MR combine vaccine, Japanese vaccines. It is estimated that 2 out Sinovac is one of the leading Encephalitis vaccine and Influenza HA of 3 children immunized in 2004, emerging biotechnology companies vaccine. with a vaccine, received one in China. manufactured by Serum Institute. Serum Institute’s range of products • Sinovac is the first and currently the have been used in 145 countries only company in the world to have across the globe. been granted permission to begin clinical trials for a vaccine to prevent • Serum Institute of India, world’s fifth SARS. • KAKETSUKEN is a Juridical largest vaccine manufacturer Foundation which researches, registered approximately $180 • Sinovac is developing inexpensive, develops, manufactures and supplies biological products such as million in revenues in 2005-06. At modern vaccines that target the vaccines for humans and animals, present, Serum is the number 1 emerging market and that can and blood plasma derivatives. biotechnology company in India. In compete with older technology Based in Kumamoto, Japan, the 2006, the growth rate of Serum vaccines for large-scale government foundation has pursued the Institute of India was around 40 and international health organization preventive medicine fields of percent. vaccination programs. microbiology, immunology and serology, towards the improvement of health and hygiene, and is a leading company in the fields of human vaccines and animal vaccines. 28
  29. 29. Market Players : Competitive Positioning High Novartis GSK Biologicals Acambis Baxter Sanofi Pasteur Medimmune Crucell Merck PowderMed Pharmaceutical Companies Wyeth Degree of Innovation with vaccines division Biotechnology Companies Serum Institute developing vaccines Solvay Sinovac Bharat Biotech Low PT. Bio Farma Low High Breadth of Current Applications 29
  30. 30. Alliance and Partnership Analysis Company 1 Company 2 Time Deal Structure Objective To form Sanofi Pasteur MSD,a jont venture European Sanofi Pasteur Merck 1994 Merger company dedicated exclusively to vaccines To gain access to novel vaccine adjuvants and GSK Corixa Corporation Apr 2005 Acquisition antigens GSK Wyeth Sep 2005 Acquisition To expand its ability to increase vaccines supplies To gain access to the vaccines market Novartis Chiron Oct 2005 Acquisition Pfizer Powdermed Oct 2006 Acquisition Strategic opportunity to enter the vaccine market GSK China Sinovac Biotech Aug 2007 Partnership To promote a flu vaccine in China Merck Crucell Sep 2007 Partnership To gain access to vaccine production technologies Serum MOU with an intent to commercialize Serum Institute Akorn Oct 2007 Partnership Institute’s six vaccines in the US market Dynavax Merck Technologies Nov 2007 Partnership To jointly develop an experimental hepatitis B vaccine Shenzhen To develop and manufacture flu vaccines to meet Government ~1/3 of local needs. Potentially the largest vaccine Sanofi Pasteur (China) Dec 2007 Joint venture manufacting plant in Asia 30
  31. 31. 05• Influenza Vaccine Market Assessment : Overview 31
  32. 32. Influenza in Asia Pacific : Disease and Management Trends CHINA JAPAN - China as with most countries in Asia Pacific currently has a low influenza vaccination rate of 1.5%. - Japan has reported close to 1.0 million influenza cases annually -The potential demand for influenza vaccinations is close to 60 between 2006 and 2007. million doses annually. - Japan utilizes approximately 18.7 million doses of influenza vaccines annually or 74.5 percent of local production. INDIA - For 2007-08, approximately 20 - Influenza is not currently considered a major million doses are planned to be health threat in India. However, recent required. outbreaks of avian influenza in West Bengal have raised the profile of the disease. - The estimated potential demand from the SOUTH KOREA market is 2.5 million doses annually, most of which would be channeled through the private - South Korea has a well developed commercial market. market for influenza vaccines with 15 million doses being consumed annually. - However, the disease is viewed as a seasonal trend with lower awareness levels than neighboring countries. THAILAND TAIWAN HONG KONG - The WHO reports that there are an - Taiwan has developed an increasing strong network for estimated 150,000 to 600,000 - Influenza scares hit Hong Kong Influenza surveillance and monitoring post SARS. influenza patients annually in hard this year with the death of 3 Thailand. children during the annual flu - This includes the developments of National Influenza season. Center which monitors all related influenza cases and -With the threat of potential disease surveillance. pandemics, Thailand has invested in - Prompt government response influenza manufacturing facilities with resulted in closure of affect schools - Taiwan has a target to achieve immunization of 30 the capacity to produce more than 2 during the outbreak and prompted percent of the population annually against influenza by million doses annual within the next 5 testing of influenza pandemic 2011. years. preparedness plans. -However, current annual consumption is low at approximately 30,000 doses annually. 32
  33. 33. Overview of Influenza Management in Asia Pacific Summary of Disease and Management Trends COUNTRY Current and Future Disease Trends Current Management Initiatives Influenza is viewed as a seasonal disease in Japan and National level surveillance is in place and national JAPAN there is a relatively high demand for vaccinations from stockpiles are determined on an annual basis. Japan the aging population – however the coverage of the utilizes 20 million doses annually. population over 65 is less the 50 percent. Influenza is viewed as seasonal respiratory disease in The government promotes seasonal influenza SOUTH KOREA South Korea. Currently approximately, 30 percent of the vaccinations through public healthcare centers during flu population (15 million doses) is vaccinated annually. season as do academic societies. The incidence of Influenza (common) is considered low, Beijing is at the forefront of influenza management with CHINA it is not the concern for public or government except the city government finances to get all its citizens get when national events such as the Olympics are occuring. vaccinated last year (local brands free for the olds and imported brand half price for children). Influenza is a closely monitored disease in Taiwan, with Taiwan has a strong centralized surveillance network in TAIWAN the annual number of confirmed cases being low for the National Influenza Center in collaboration with the major strains. CDC and national level pandemic preparedness plans are in place. Hong Kong is subject to seasonal influenza scares when The Influenza Vaccination Program is run annually under HONG KONG outbreaks occur due primarily to its densely population the Dpt of Health and provides free influenza situation. Common influenza outbreaks are expected to vaccinations to high risk groups, elderly and pregnant continue to occur on an annual basis. women coverage under social insurance programs. Influenza is viewed as a seasonal respiratory disease, There are currently no major national level initiatives INDIA and outbreaks generally occur post the rainy seasons aimed specifically at managing influenza, with government responding to outbreaks on a case by case basis. According to WHO Thailand 2007 study, it estimated that Thailand has invested heavily in production facilities for THAILAND 150,000 to 600,000 influenza patients in Thailand influenza vaccines (USD 331.7 million) with the capacity annually from 2008 onward. to produce 2 million doses annually. Source : Frost & Sullivan 33
  34. 34. Overview of Influenza Disease Management in Asia Pacific Key Challenges in the Management of Influenza • Awareness is one of the key challenges in the management of influenza. Although the profile of the disease has been raised following pandemic scares and recent avian influenza outbreaks, the majority of the population across all AWARENESS / countries surveyed do not consider influenza vaccinations an annual EDUCATION requirement. • Government campaigns, promotional activities by manufacturers along with news reports regarding influenza outbreaks have all contributed to increased awareness of the disease across Asia Pacific. However, awareness of vaccinations as a prophylactic measure remains low. • Influenza vaccines are not reimbursed across all countries surveyed. • Taiwan, Hong Kong, Japan, Thailand and South Korea provide subsidized / PRICE / free influenza vaccinations for elderly (>65 yrs). ECONOMICS • The cost of the vaccination is seen as prohibitive, while the need for an annual dose is viewed as a burden in countries such as South Korea. • The requirement for annual dosing for influenza vaccines and the inability of the product to provide effective protection against all strains are challenge to ANNUAL gaining public acceptance and more wide spread administration of the vaccine. DOSING REQUIREMENT • Furthermore, Hong Kong physicians feel that the release of the annual guidelines from WHO is too slow for an adequate response prior to the flu season. 34
  35. 35. Overview of Influenza Management in Asia Pacific Treatment & Diagnosis Guidelines Included in the National COUNTRY Schedule Influenza vaccinations in Japan are solely on voluntary basis with free JAPAN YES Voluntary vaccinations being provided for the elderly (>65 years). Influenza vaccinations in South Korea are solely on a voluntary basis SOUTH KOREA YES with free vaccinations being provided for the elderly (>65 years). Voluntary Influenza vaccinations in China are solely on a voluntary basis with YES CHINA free vaccinations being provided for the elderly (>65 years). Some Voluntary cities such as Beijing provide extra subsidies for children. Influenza vaccinations are provided free to the elderly above 65 years TAIWAN YES Voluntary since 1988 which has reduced the hospital admission rate for this demographic to 54%. Influenza vaccinations are provided free to the elderly. The annual HONG KONG YES Voluntary influenza vaccination program also provides for high risk groups covered under social insurance. There are no current guidelines in place for the prescribing influenza NO INDIA vaccinations, with most physicians referring to WHO and related Voluntary medical associations. Influenza vaccinations are provided for the elderly (>65 yrs), however YES THAILAND there are no specific guidelines in place. Physicians generally respond Voluntary to WHO and MOPH recommendations when available. Source : Frost & Sullivan 35

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