China is currently the world’s largest vaccine producer, producing more than one billion vaccine doses annually. But, given the huge population of China, analysts still consider the market underserved. According to the National Immunization Program (NIP), the 16 million infants born every year in China require 64 million doses of DPT vaccines (four immunizations in the first year), yet China currently only produces 18 million doses. The case is similar with MMR, hepatitis A, and other vaccines.
China’s vaccine industry is heavily regulated and influenced by policy trends. The government-reimbursed NIP, in place since 1978, provides childhood vaccines free of charge. This program is responsible for the vast majority of vaccine consumption in China. The NIP covers a range of vaccines, some with a low profit margin, most from domestic manufacturers (Table 1). Multinational pharmaceutical companies, such as GlaxoSmithKline, Novartis, and sanofi-aventis also sell their vaccines in China, however most of their vaccines are not included in the NIP. This is because these multinational corporations (MNCs) tend to focus on so-called secondary vaccines such as flu vaccines, which claim a much higher profit margin.
The Chinese Center for Disease Control and Prevention (CDC) is responsible for purchasing and distribution of all vaccines covered by the NIP. For some provinces the CDC system covers non-NIP vaccines, as well. This makes the CDC highly influential in vaccine production, reimbursement, and distribution.
In the past, the vaccine industry in China had been monopolized by the China National Biotec Group, with regulatory barriers that excluded newcomers. The monopoly was loosened during the 1990s, and China now has more than 50 vaccine manufacturers (Table 2 provides a partial list). But the China Biotec Group remains an industry leader domestically.
In recent years, domestic vaccine makers have been trying to produce secondary vaccines outside NIP coverage, but their technology, product stability, as well as economies of scale have yet to catch up with that of their global counterparts.