The negotiation was a simple one. Vaccine makers needed an assured market, and the government, assured supply. Until recently, the lowest bidder for a government tender took it all. Not anymore. The supplier who scores the second place also has value. After a year of dialogue in 2016, there’s finally a consensus. The lowest bidder will supply 60% of the products, while the second lowest will meet the remaining need. Provided, the latter matches the lowest price.
Under the revised rules, on 28 March, the ministry of health closed its first bid to buy 14.5 million doses of rotavirus vaccine for Rs 104.13 crore. After giving two orders of 10 million doses each to Bharat Biotech (Bharat) since its Rotavac launch in March 2015, the ministry is pleased that this time it has an option. Pune-based Serum Institute of India (Serum), the world’s largest vaccine manufacturer by the number of doses produced, is competing with the poster boy of the Indian vaccine industry—Hyderabad-based Bharat. The latter has the first-mover advantage and low price on its side but Serum offers an advanced product.
When Bharat launched Rotavac, two years ago, it was a dollar a dose. Also, the cheapest in comparison with what competitors GlaxoSmithKline (GSK) and Merck were selling in India. It was developed with support from the Indian and the US governments and non-government organisations including the Bill and Melinda Gates Foundation (BMGF). It couldn’t have been better timed because a year later, the Modi government included the rotavirus vaccine in the Universal Immunisation Programme (UIP) in four states—Andhra Pradesh, Haryana, Himachal Pradesh and Odisha. Rotavirus diarrhoea kills between 80,000 to 100,000 children every year.
Meanwhile, slowly and steadily, Serum had been developing a different product, more in tune with the global market. For two dollars a dose, Serum’s Rotasiil offers higher stability, a longer shelf life and reduced wastage with its small doses. No less importantly, it has pushed the government to change its ways of buying from the industry as the vaccine demand for the UIP soars.
More vaccine quantities and the number of children being immunised, up from 65% to 90% by 2020, under the new plan, have been like a booster dose for the Indian vaccine makers. The guaranteed minimum of 40% to the second lowest bidder is a turning point. The current UIP budget of Rs 1000 crore for 2017-18 will see nearly twice the number of suppliers for different vaccines, the credit for which goes to two companies—Bharat and Serum.
The hare & the tortoise
The story of Rotavac’s development started in 1985.
