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The Indian health ministry has maintained its position for the last 10 years. At least formally, with the Supreme Court, the Parliament and the media. It wants to upgrade the three public vaccine manufacturers to supply vaccines of impeccable quality at a low price. Now that the government companies have risen from the ashes as competent vaccine producers, the health ministry needs to make a choice. Are they still a worthy contender for the now Rs 9,451-crore ($1.44 billion) national vaccination programme?

The three public sector undertakings (PSUs)—Central Research Institute (CRI), Kasauli, BCG Vaccine Laboratory (BCGVL), Chennai and Pasteur Institute of India (PII), Coonoor—were shut down in January 2008. The World Health Organisation had questioned the quality of the vaccines they were producing. They spent a decade to become Good Manufacturing Practice (GMP) compliant, a sure-fire mark of quality-tested vaccine producer. The PSUs spent a part of the Rs 509 crore ($78.21 million) allocated to them in the last five years to upgrade to new quality standards. CRI complied with GMP in principle in 2012, and the minister of health celebrated by inaugurating the GMP-compliant facility in 2016. In two months, BCGVL is expecting GMP certification, and in four months, PII will join the club.

Now, when the executives from BCGVL and PII visit the health ministry, they return nervous. “The mood at the immunisation programme in Delhi has changed. Over informal conversations, they say they do not want to procure from us, anymore,” an executive at PII who did not want to be named told The Ken. The health ministry’s leanings are evident in supply records from CRI and private companies, over the last two years.

Source: National health profile, 2017

Why wouldn’t the ministry want to buy from PSUs? PSUs sell vaccines at the lowest price decided in a competitive bid involving private players. They either offer or will soon offer quality-tested vaccines. Further, they are in control of the health ministry itself. Together, they used to supply over 80% of the essential vaccines before they were closed down, and now, private players supply the same amount to the Indian government. A Public Interest Litigation filed in February 2009 did, however, tilt the bar in favour of PSUs, which have invested in upgrading their facilities to meet the new quality standards. But, in the meantime, their competition has grown stronger, and the health ministry’s choice has become more complex.

Since these PSUs were closed down, the budget allocated to the national vaccination programme doubled and so did the number of vaccines in the programme. The government learned to rely on the private Indian vaccine sector which grew at 18% to Rs 5900 crore ($907 million) between 2009 and 2016.


Ruhi Kandhari

Ruhi writes on the impact of healthcare policies, trends in the healthcare sector and developments on the implementation of Electronic Health Records in India. She has an M. Sc. in Development Studies from the London School of Economics.

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