The world goes from shortage of covid-19 vaccines to excess

(Bloomberg) After racing against time to build capacity and meet seemingly insatiable requests for covid-19 vaccines, the global vaccine industry is now facing diminishing demand.

The trend could slow down the high sales of giant pharmacists such as Pfizer Inc. and AstraZeneca Plc and create new problems for local manufacturers, from India to Indonesia, who developed a gigantic capacity to manufacture vaccines but are now dealing with oversupply.

Although reinforcements are likely to keep the demand for covid vaccines alive around the world, the huge shortage that reigned for much of the past year has decreased. Now the possibility of global excess seems more likely.

“Supply exceeds demand in much of the world, even though many countries apply booster vaccines,” said Scott Rosenstein, health care consultant for Eurasia Group.

Meanwhile, a growing number of manufacturers are entering the market.

More than 9 billion doses could be produced by 2022, but demand for vaccines may decline at an approximate rate of between 2.2 billion and 4.4 billion doses per year in 2023 and beyond, according to analysis firm Airfinity Ltd.

Moderna's chief executive said in a conference call that the US Government has not yet placed orders for 2022, suggesting room for growth if the country buys a large number of booster doses. AstraZeneca declined to comment. Pfizer did not directly address questions about vaccine demand and said in a statement that there is enough capacity to vaccinate the world by 2022, but that barriers to access persist. Moderna did not comment further.

More Supply

The problem is particularly acute in India, home to the world's largest vaccine industry, which deals with domestic and global oversupply.

Biological E. Ltd., a large Hyderabad-based manufacturer, invested some 15 billion rupees (US$195 million) to double capacity during the pandemic to about four million doses of vaccines per day. However, given that most adults are fully vaccinated and the Government shows no urgency to intensify its booster dose campaign, it is not clear how many more doses will be purchased.

The Serum Institute of India ltd., the country's leading supplier that produced 2 billion covid vaccines last year, halted manufacturing in December following a lack of orders, said CEO Adar Poonawalla in January. Serum did not respond to questions and requests for comment on the company's levels of production of covid vaccines.

“One of the big questions in the future will be what to do with all this vaccine manufacturing capacity as demand decreases,” Rosenstein said. “There probably isn't enough demand for other vaccines to make this a viable option for all these manufacturing plants.”

mRNA technology

Other Indian vaccine suppliers are also looking for innovative immunization opportunities beyond covid.

“We believe that not only vaccines against covid-19, but also vaccines against flu, pneumococcal and those against other neglected diseases will start to become very important opportunities,” Kiran Mazumdar Shaw, president of Biocon Ltd., told Bloomberg Television earlier this month.

Meanwhile, in other parts of the world, some developers are throwing in the towel. Kalbe Farma, from Indonesia, paused work on a covid vaccine with South Korean Genexine Inc. this month, citing abundant inventories. It now intends to use DNA technology for other types of vaccines.

Despite current pressures, companies are likely to continue to see demand for booster doses while looking for improved inoculations that are superior to initial products. It seems that covid is evolving into what is likely to be an endemic disease, meaning it is possibly here to stay, said Gary Dubin, president of the vaccine unit at Takeda Pharmaceutical Co. of Japan.

Still, doubts remain as to whether and how often regular reinforcements will be needed, and whether possible variants “could quickly change the picture,” he said.

Original Note:

World Moves From Shortages to Possible Glut of Covid-19 Vaccines

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