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Quality issues cast shadow on Indian vaccine makers

Quality issues cast shadow on Indian vaccine makers

Hyderabad: Vaccine maker Bharat Biotech International Ltd attracted global attention in June last year when it offered to sell its version of the infant diarrhoea vaccine Rotovac for as little as $1 a dose when it was retailing for $20 in India. International vaccine makers were forced to cut the prices of their own shots in response.

The punitive action came after an audit of Bharat Biotech’s plant in Hyderabad by an inspection team of the UN health agency found deficiencies in the “implementation of good manufacturing practices" and “quality management system of the company."

For Bharat Biotech, a privately held company with revenue of 270 crore in the year ended 31 March 2011, the order was a blow from which it may take months, if not years, to recover although Rotavac, which is still being tested on babies across the country in phase III clinical trials, was unaffected by the WHO action.

“We are in dialogue with WHO," said Krishna M. Ella, chairman and managing director of Bharat Biotech, at a recent conference in Hyderabad. He gave no further details, did not respond to email queries and declined interview requests.

Bharat Biotech was the third Indian vaccine maker to attract such penal action from WHO in less than two years over quality issues, raising concern in the domestic pharmaceutical industry as well as agencies that procure vaccines for national immunization programmes.

Panacea Biotec Ltd lost WHO pre-qualification for three of its vaccines in August 2011. In July 2010, Shantha Biotechnics Ltd, a unit of French drug maker Sanofi SA, had its pentavalent vaccine Shan5 disqualified. Shan5 is a paediatric combination vaccine that includes protection against diphtheria, tetanus, whole cell pertussis, hepatitis B and haemophilus influenzae type B (Hib). Both companies said they are in discussions with WHO to address the issues.

A WHO spokesperson said in response to queries from Mint that “reassessment in the short-term is unlikely and may take months."

Inexpensive vaccine supplies from India are integral to the success of global immunization programmes, explaining the worry among vaccine procurement agencies. Vaccine sales by Indian companies are estimated by the industry organization Pharmexcil to be worth $900 million in fiscal 2011 and are growing at an annual average growth rate of 23%. The country accounts for almost 43% of total vaccines exported globally by volume.

“Indian vaccine suppliers are critical to global security of vaccine supplies," said Sandeep Sinha, director of the healthcare practice, South Asia and Middle East, at consultancy Frost and Sullivan. “Not only do they supply in huge quantities at a decent quality but they supply it at an affordable price."

According to Pharmexcil, eight WHO-prequalified manufacturers in India produce 22 vaccines for export to 150 countries. The eight are Bharat Biotech, Serum Institute of India Ltd, Shantha Biotechnics, Panacea Biotec, Biological E Ltd, Chiron Behring Vaccines Pvt. Ltd, Haffkine Bio-Pharmaceutical Corp. Ltd, and Zydus Cadila.

“That (quality) is certainly the worry," said Seth Berkley, chief executive of GAVI, a major buyer of Indian vaccine companies, in a recent interview. “One of the reasons it’s critical to have high quality is because you want people to know that India produces not only large quantity, not only produces inexpensively but it produces them (vaccines) at global quality," said Berkley, whose organization was formerly known as the Global Alliance for Vaccines and Immunization, a public-private partnership that focuses on saving children’s lives by increasing access to immunization in developing nations.

WHO acted against Shantha Biotechnics when it received quality complaints from Colombia, Comoros and Nepal about the presence of a white sediment sticking to glass vials containing the Shan5 vaccine. Studies later traced it to the manufacture of the pertussis component. Pertussis, also known as whooping cough, is a highly contagious bacterial disease.

WHO ordered the recall and destruction of all the batches of Shan5 vaccine because of the problem, which also caused the agency to terminate the pre-qualification evaluation of a three-in-one combination vaccine that had the same anti-pertussis component.

For the vaccine makers, there’s plenty at stake. For instance, the suspension of the Shan5 vaccine has cost Sanofi $340 million in sales from 2010 to 2012 on a contract with Unicef, or the United Nations Children’s Fund, Bloomberg News reported in November 2010. Sanofi acquired Shantha Biotechnics for €440 million from another French company, Mérieux Alliance, in July 2009.

As part of the corrective process, Shantha Biotechnics has to make changes to the manufacturing process, which mean it has to perform clinical trials again on Shan5, a costly and time-consuming process, to establish the safety and efficacy of the vaccine.

“We are living in an arena where standards are changing and becoming higher and higher," said Harish V. Iyer, chief executive of Shantha Biotechnics. “A few years ago, maybe WHO may not have said this...I don’t know. But now they feel that it’s important. Again, I think it’s part of raising standards."

Iyer took charge in September as part of a management overhaul at Shantha Biotechnics after the Shan5 debacle, with his immediate priority being to restore confidence in quality standards followed by the company. Shantha Biotechnics is investing around $300 million in augmenting capacity and improving overall quality standards.

“We are investing heavily in quality," Iyer said. “We are trying to make sure that we have global standards, we are using Sanofi, our parent group, to help augment quality standards. This requires heavy investment in training, investment in infrastructure."

Shantha Biotechnics expects to regain WHO’s pre-qualification status vaccine sometime in 2012.

“We are trying to recover from key events that have happened in 2010; we are well on our way back," Iyer said.

For the year ended 31 March 2011, Panacea Biotec reported revenue of 1,170.44 crore, of which vaccines account for 73.7%. One-third of the vaccine revenue was contributed by the five-in-one shot Easyfive, one of the three vaccines to be disqualified by WHO.

Mumbai-based brokerage Avendus Securities Pvt. Ltd has estimated a loss of 66 crore in FY12 for Panacea because of WHO’s action.

The company reported losses of 33.64 crore and 71.72 crore in the second and third quarter, respectively. Panacea’s stock has declined by around 61% since WHO passed the order on delisting of two of its products. The stock closed up 4.90, or 7.21%, on Thursday at 72.85, compared with a 63.01 point, 0.37% decline in the benchmark Sensex to 17,058.61.

Panacea Biotec, in August 2009, won a Unicef contract worth 1,067 crore to supply 75 million doses of Easyfive in the following three years, making it one of the largest suppliers to the world children’s agency.

“We are in constant discussion with WHO to resolve the problem," said Rajesh Jain, joint managing director of Panacea Biotec. “It’s not a problem of one company; it’s a problem that the industry is facing."

WHO’s pre-qualification status, attesting that vaccines are safe and effective, is essential for vaccine makers to bid for supplying their products to immunization programmes backed by the United Nations. The process of evaluation includes close scrutiny by the world health agency, which studies manufacturers’ production methods, vaccine composition and quality control and clinical evaluation systems, among others.

WHO teams undertake reassessments of prequalified products at regular intervals—at least every two years—apart from site audits and testing of lots supplied by UN agencies to monitor continued compliance by suppliers with the organization’s standards.

“The pre-qualification programme must continually evolve in order to keep pace with the progress in vaccine quality standards and the growing number and complexity of applications being submitted year after year," WHO spokesperson Mansi Kumar Joshee said in response to emailed questions.


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