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Drugmaker Cipla and vaccines company Serum Institute of India have taken the battle for affordable child vaccines right into the backyard of the multinationals.
The two Indian companies have come together in a distribution arrangement for paediatric vaccines in Europe. Serum will develop and manufacture the paediatric vaccines and Cipla will seek regulatory approvals from the European Medicines Agency to market the products in Europe.
“We have been very old friends for a very long time,” said Cipla Chairman YK Hamied, speaking from Hong Kong. Vaccines was something that Cipla did not make, but was a perfect fit as the company expanded its horizon in many ways, he added.
Sharing a similar sentiment, Adar Poonawalla, Serum’s Chief Executive and Executive Director said, the alliance with Cipla was natural because it was also “family-owned” and had a similar outlook on access to affordable medicines.
In contrast, dealing with `Big Pharma’ or multinational companies is difficult, he said, adding that there would have been a conflict of interest. “I can’t go to a competitor and ask them to sell my product,” Poonawalla told Business Line.
In the past Serum’s experience with MNCs has been “less than desirable,” and it did not work our many reasons, he observed.
The collaboration with Serum enables Cipla to enter into the vaccines segment. And given Cipla’s reputation on providing affordable medicine and Serum’s expertise in providing vaccines across the world, the alliance between the two will be of interest to European vaccine-makers Sanofi and GlaxoSmithKline and American giant Pfizer.
“It will hurt them the most, as it is coming into their domain,” he said.
Battle abroad
Though the market for the vaccines presently in the alliance is not massive, Poonawalla explains that the Governments of various countries were buying drugs and vaccines and supplying it free through insurance schemes, the NHS (in the UK) etc.
“Governments are becoming fed-up with the extortional prices of Big Pharma,” he said, specially since other markets in Africa or South America, for instance, see similar products selling at lower prices.
Vaccines sold through the alliance would be priced at least 15 to 20 percent less than that of the multinational products, Poonawalla indicated.
Alliance
The Dutch facility that Serum had acquired two years ago will not be directly supplying into the alliance, said Poonawalla. The vaccines for the Cipla alliance would be exported from the Serum’s Pune facility.
The alliance presently covers vaccines for MMR, Hepatitis B and Tetanus. It is structured in a way that about 4/5 vaccines would be introduced over seven years, he said, adding that revenues from the alliance would possibly flow in 18 to 24 months.
Over the last six months, Cipla has been strengthening its Europe footprint by, among other things, launching respiratory products such as Salmeterol/Fluticasone in Germany and Sweden, Czech Republic, Slovakia and Croatia.
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