The Market Potential of Vaccines: Communicable diseases, Influenza, Romania and the EU

Communicable diseases such as Hepatitis, Influenza, Syphilis, Rubella and Mumps, amongst others, are a constant threat as they re-emerge periodically in both developed as well as developing nations. Along with these existing burdens to a healthy society, the world is experiencing a rise of new communicable illnesses as well (along with evolutions in known viral or bacterial strains, and treatment-resistance.)

Vaccinations: a huge market now and in the future

In the last decade there has been exponential market growth regarding the means to handle communicable diseases, due to increased commitment and healthcare expenditure from emerging economies and markets, a thorough involvement from the UN, and due to a substantial increase of private sector spending in low to middle income nations on vaccines.

Common approaches to handling communicable illnesses are preventative programs, post-diagnosis treatments, and pre-infection vaccination schemes. When looking at vaccines alone, there is a global market valued at €24 bn, expected to rise by 280% in the next 10 years to reach €91 bn.

The influenza vaccine market on its own is estimated at €3 bn in 2015, and forecasted to grow by 17% in the coming three years to reach €3.5 bn.

An example from Europe: Trends in Romania

Romania suffers from several deficiencies in its healthcare system, and a significant share of its population is living near or in poverty (38%). Socio-economic struggles are typically correlated to a more negative performance regarding healthcare indicators; Romania unfortunately follows this pattern, and currently has amongst the highest rates of communicable diseases (such as influenza, syphilis, rubella, mumps and hepatitis cases) in all of Europe.

In 2014 the following communicable diseases cases were registered:

  • Approximately 18,000 tuberculosis (TB) cases in Romania (the highest in the EU)
  • Approximately 3,750 cases of syphilis (also the highest in the EU)
  • 2,100 cases of mumps (ranking 5th highest)
  • 1,650 cases of rubella (3rd highest, but vastly outranked by Poland who registered 13,000 cases)

Due to restricted access to sanitation, education and healthcare services for a large proportion of its citizens, the general Romanian population runs a higher risk of infection, and a lesser chance of receiving proper diagnosis and treatment successively.

Healthcare profile Romania

Romania spends 5.6% of GDP on healthcare, 76.1% of this is funded by public spending. There are 308 acute hospitals and 116,397 acute hospital beds. In the country there are 2.5 physicians per capita, of which 12,722 are GPs.

Influenza cases and vaccination coverage

Regarding influenza, Romania has in fact an average or even slightly below average registration of influenza cases/activity, according to the European Centre for Disease Prevention and Control (ECDC). Romania has around 17% vaccination coverage, which is in fact a decrease by 4% from the previous year.

Luxembourg, Austria, and Finland had the highest influenza cases and risk accordingly in recent years, demonstrating that even high income and strong national healthcare systems are no guarantee or protection against communicable diseases.

A study by the ECDC shares that only three European nations attained the EU target for influenza vaccinations in the previous influenza season; the Netherlands, Northern Ireland and Scotland. The vast majority of nations are around half, or far below the desired target.

flu-vaccine-uptake

Matching high vaccination coverage with positive outcomes, UK-Wales shows the least influenza case intensity, followed by UK-Scotland, UK-England, and the Netherlands. Particular risk groups such as the elderly or the chronically ill, are often spared from infection due to nationwide efforts to vaccinate, and seasonal mortality is decreased in correlation to high vaccination rates.

The ECDC coverage statistics show that there is substantial market potential in the EU market alone, if countries aim to achieve EU vaccination targets.

Vaccine market growth and trends

In the last 10 years, the UN market, i.e. the combined demand from the UN for all their funded vaccination projects, has grown over 450%. Currently 7.5% of all the vaccine sales in the world are accounted for by the UN and their worldwide programs, equal to €1.8 bn.

The last decade has seen a range of mergers and acquisitions amongst medical companies related to vaccines, and this is expected to continue in the coming years.

Emerging manufacturers, particularly from China, India, Indonesia, Brazil and Mexico, are gaining market presence. These countries contribute 50% of the vaccine volumes, and 30% of its value.

Developing countries will also be addressed more frequently for outsourcing processes.

TforG expects a much greater demand for vaccines to arise from low income countries in the near future, which will be supplied by both emerging manufacturers as well as established ones. Brand perception continue to be key marketing tools, though price competitiveness will weigh into sales strategies heavily.

Overall, supply will increase, as will funding via donors and foundations.

The biggest players on the vaccine market in 2015

  • Merck & Co
  • GlaxoSmithKline
  • Sanofi
  • Pfizer
  • Novartis
  • Emergent Biosolutions

What will fuel the vaccine market growth these coming years?

TforG expects that globalization, livestock industry management, and overpopulated conditions will contribute to the growth of the vaccine market. These predicaments provide favorable conditions for the spread and emergence of old and new communicable diseases, and these factors are expected to increase in the future.

Field presence in order to understand market complexities and tailored needs will be a further success factor. For example, international consultant McKinsey and Company performed field visits in India in order to understand the national vaccine market first hand on behalf of pharmaceutical stakeholders. Pfizer and Novartis have also engaged with local networks and performed field studies in Switzerland, Austria and other Northern European nations, to better understand the medical key opinions and social attitudes that explain vaccination statistics, and how to improve them.

Both cost-effectiveness and price differentiation (tiered pricing and market segmentation to adjust prices according to purchasing power and demographics) will be key drivers to vaccine marketing and sales. There will be new financing channels, along with new research and manufacturing processes to enhance pharmaceutical action against the spread of communicable diseases.

 

For further quantitative and qualitative information on various European and worldwide healthcare system and their macroeconomic climates, healthcare and hospital trends, please look into our Business intelligence platform containing volumes of 1000 surgical procedures in 13 specialisms, or consult a TforG Deep Dive report of the country of your interest.