By Aiswariya Chidambaram, Senior Research Analyst, Healthcare
Europe - The Traditional Hub for Vaccines
Traditionally, Europe has been enjoying the leadership position in the global vaccines sectorfor more than a decade, in terms of vaccines production, research and development (R&D), and exports. Currently, Europe constitutes nearly 80 per cent of the global vaccines output with five main vaccine manufacturers: GlaxoSmithKline, Pfizer, Novartis, Sanofi Pasteur, and Merck having more than 60 per cent of their production facilities located across 13 countries in Europe.
In addition to vaccines production, Europe has traditionally also been the hub for vaccines R&D, accounting for more than two-thirds of the global research projects, until 2006. At present, Europe has the maximum number of vaccines R&D sites (22) closely followed by the U.S. Additionally, Europe is the world leader in the export of vaccines, with nearly 80 per cent of the vaccines produced being exported to different parts of the world through specific agencies and humanitarian groups. Nevertheless, Europe houses nearly 65 per cent of the workforce in the global vaccines industry (both production and R&D), registering significant growth rates every year.
Rapid Shift in Power
However, it is interesting to note that there has been a rapid shift in balance of power from Europe to the U.S. during the past few years, owing to the rapid growth, increasing R&D investments, and relative competitiveness of the U.S. The decline in Europe's dominance in the R&D sector is primarily due to the financial crisis, which restricted flow of investments to Europe. Despite that nearly 60 per cent of the vaccine supplies are procured by the public sector in Europe, which includes national governments, stockpiles, and specific humanitarian agencies, very minimal funding (less than three per cent) is provided by the public sector for vaccines R&D. On the contrary, public sector funding is onthe increase in the U.S and the Asian countries. Therefore, this has resulted in the narrowing of gap between Europe and the U.S. Currently; the two regions are more or less evenly matched with respect to their R&D activities, which include R&D investment, clinical trials, and a number of projects. Nevertheless, the significant cost benefits and increasing World Health Organisation (WHO) compliance of vaccine manufacturers in Asian countries are likely to turn the attention of market participants towards these cost-effective markets, thereby, making them the global hub for vaccines production in the future.