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The Hepatitis-B vaccine market, which is shared by more than 13 players, has not grown beyond Rs 120 crore (Rs 1.2 billion) against the projected Rs 600 crore (Rs 6 billion) by 2004-05.
Retail prices, which were in the range of Rs 250 to 300 per dose two years ago, have now come down to less than Rs 100. Serum Institute of India slashed the prices of its Hep B Vaccine brand by 50 per cent a couple of months back.
"Prices are expected to come down further by 20 to 25 per cent," said Vijay Anand, director, Sathguru Management Consultants, a Hyderabad-based leading management consultancy company. Cheaper imports from Korea and China have also made matters worse for the industry.
While Pfizer and Cadila Healthcare have already withdrawn from the market, the Hyderabad-based Bharat Biotech and Shanta Biotechnics, pioneers in the segment, are shifting their focus to newer vaccines. The Delhi-based Panacea Biotec is introducing new variants -- a combination vaccine in the same segment.
Pankaj Patel, chairman & managing director, Cadila Healthcare (Zydus), said the segment is overcrowded with brands and value growth is declining.
"It did not make any economic sense for us to continue in the market," he said. Cadila recently snapped its joint venture with Korean Green Cross to market the HB VAC.
A Pfizer official said the company discontinued its brand Hepashield -- as it was not relevant in the Indian market.
"The market has been spoilt by certain players who could sell the product at less than the cost price," said Krishna Ella, chairman and managing director, Bharat Biotech.
The current players in the market include GSK (Engerix B), Bharat Serum (Hepacine B), Serum Institute (Genvac -B), Panacea Biotec (Enivac HB), Unichem (Unihep- B), Intas Pharma and Indian Immonulogicals.
Rajesh Jain, joint managing director of Panacea Biotech, said only those companies with an edge in technology and quality could sustain in the market as growth, in value terms, was disappointing.
Khaleel Ahmed, executive director, Shanta Biotechnics, said since the local market was shrinking in terms of value and margin, the company was focusing on exports by supplying to the Unicef, World Health Organisation and other international health agencies.
The other big reason for the market stagnation was the government's refusal to include the product in its national immunization programme.
"Shanvac B was launched by Hyderabad-based Shanta Biotechnics in 1998 outside the NIP at a time when indigenous vaccine makers were aiming only at the government-run programme. This was on account of high development costs, less R&D capability and IP related issues," said a pharmaceutical sector analyst.
The next three years saw another 12 Hep B vaccines hit the market. "However, none of them has been able to hit the target. The volume of business might have grown but revenue generation is stagnant on account of continuous price cuts," added the analyst.
Some manufacturers, which set up plants with high expectations, are now trying to forge alliances with companies with a strong marketing force.
"Existing players can absorb another 20 per cent cut in the prices. Beyond that level, many players will be forced to make an exit," said Anand of Sathguru Management.