While the government puts Mylan’s $1.6-billion takeover of Strides Arcolabs injectibles unit on hold on grounds that this will weaken certain key production verticals like vaccines, reducing their availability and leading to price rises, the reality is quite different.
History shows that production cuts are more common in the government sector than among private firms. With the PSUs freezing/cutting their vaccine facilities, roughly half of the government’s budget on universal immunisation programme (UIP) is now spent on procurement from the private sector against 25% some five years ago.
Commerce minister Anand Sharma has expressed concerns that a potential takeover of say, a Bharat Biotech or a Serum India by a multinational could affect production levels of essential immunisation. But such a threat,
however real it would be, has more to do with the government’s own vaccine institutes being in a dire need of revival.
With three PSU vaccine firms supplying the bulk of the vaccines required for the country’s basic immunisation programme shut for over two years, the government has had to buy essential vaccines from the private sector at higher prices. Industry experts said the cost of procuring basic vaccines like DPT (diphtheria, pertussis, tetanus), childhood TB (BCG) and OPV (oral polio vaccine) from private companies accounted for around 50% of the R1,045 crore spent by government in 2012-13 for UIP.
“The current policy is not conducive for the development of a public sector vaccine industry. From 23 PSU vaccine R&D institutes in the pre-liberalisation era, we have now come down to six. While the private sector has boomed in the period, the demand-supply gap has widened, leading to a substantial portion of basic vaccines also being imported by the government,” Y Madhavi, principal scientist at National Institute of Science, Technology and Development Studies, said.
Recently, India faced an acute shortage of yellow fever vaccine creating a black market price of R20,000 for each dose of this vaccine, as opposed to the government price of R400. The government had to import huge quantities from multinational companies like Sanofi Pasteur to meet domestic demand. The shortage occurred due to