Innovation and investment is driving momentum in vaccines market

The vaccines market, which in the past has been associated with low profit margins and slow growth rates, has gained momentum in recent years through innovation, according to new analysis from Frost & Sullivan.

The introduction of vaccines for diseases with high burden and continuous investments aimed at boosting production capacity is driving the growth.

Frost & Sullivan, in its report on the European Vaccines Market, has found that the market earned revenues of US$4.50bn in 2007 and estimates that this will reach US$9.85bn in 2014.

‘Health authorities are prepared to spend on prevention, rather than witness expenditures on vaccine-preventable diseases spiral out of control,’ said Frost & Sullivan research analyst John Paul. ‘The growing support for vaccinations from physicians and paediatricians has been fundamental to the growth of the vaccines market.’

According to Frost & Sullivan the market has shown remarkable growth in recent years as a result of the introduction of vaccines in untapped disease segments. Governments’ acceptance and reimbursement of such vaccines has encouraged market participants to increase investment in r&d and develop innovative and differentiated products. Innovation in technology has enabled manufacturers to move into areas such as therapeutic vaccines where the potential for growth is unlimited.

However, Europe is already at a disadvantage because of the ban on direct-to-consumer marketing. Uptake levels in Europe therefore remain slower than in the US. Participants also have to deal with government policies and awareness levels that diverge widely across Europe.

‘A clear comprehension about the dynamics in various regions is important to predict demand and alter business strategies accordingly,’ said Paul. ‘Predicting and meeting demand is one of the most challenging factors in the vaccines industry. Efficiency in manufacturing and distribution has to be achieved in order to offset limited production capacities and low profit margins.’

Keeping abreast of epidemiological trends and government policies, coupled with efforts to boost physician and public awareness, will be crucial.

‘Vaccine manufacturers should be able to identify key market dynamics, promote efficiency of operation and support public perception while adapting and implementing lean principles and innovative marketing strategies,’ added Paul. ‘Streamlining investments into r&d of adjuvant technologies, therapeutic and DNA vaccines could enable realisation of significant potential in these areas.’