This week’s headlines have been full of vaccine news. The WHO announced that a third producer for the oral cholera vaccine has been approved, which will help alleviate global shortages. A team of researchers developed a vaccine that protects poultry from many strains of influenza, and questions are being raised about why an Ebola vaccine that was in development before the 2014 outbreak never made it to clinical trials.
Yes, vaccines are newsmakers. And moneymakers. According to new research by Technavio, the global human vaccines market is expected to nearly double in value from 2015 to 2020, topping $60 billion in 2020.
That number takes into account the revenue generated from the sales of preventable and therapeutic human vaccines.
Top 10 pharmaceutical companies based on global vaccine revenues in 2014 ($ millions)
Source: Technavio, 2015
According to Technavio analysts, there are four key trends that are expected to have a big impact on the direction of the vaccine market as a whole, as well as on key market stakeholders throughout the forecast period.
Increase in strategic alliances, mergers, and acquisitions
The pharmaceuticals industry is intensely competitive. Developing drugs is an intensive, time-consuming process, and those in the business want to make sure they can turn a profit at the end. But regional vendors in developing countries are chipping away at the market share of large pharma manufacturers. This causes price erosion and may compel major players to operate under low-margin models.
In these cases, larger companies tend to turn to mergers and acquisitions as a way to increase their market penetration and enhance product portfolios..
Overview of major vaccine-related acquisitions (2005-2012)
Source: Technavio, 2015
Entry of novel vaccines
While preventable vaccines make up nearly 95% of the market, there is a growing space for therapeutic vaccines—vaccines used to elicit an immune system response to treat a disease, rather than prevent it.
Therapies are being developed to treat cancer, hepatitis, HIV, and SARS, and several companies have introduced combination vaccines that are effective in the prevention of viral infections like polio, pertussis, meningitis, and pneumococcal infections.
Other novel treatments like dendritic cell vaccines, DNA vaccines, T-cell receptor peptide vaccines, and recombinant vector vaccines have also increased investment in R&D and fueled market growth.
Focus on emerging markets
Vaccine manufacturers are shifting their bases to developing countries to take advantage of the business conditions in these areas. Global players are targeting places like India and China as vaccine development hubs because of the skilled workforce, excellent manufacturing capabilities, and low manufacturing costs.
There has been a steady rise in vaccine focused public-private partnerships, specifically in developing countries. Immunization programs by many governments are backed by global organizations like WHO, UNICEF, and private non-profit organizations like GAVI (formerly, Global Alliance for Vaccines and Immunization).
These initiatives are expected to help bolster market growth, as well as support global immunization-related goals.