Economic evaluation of local vaccine production vs. finished product distribution: the Biovac case study.
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Date
2016
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Abstract
The African pharmaceutical industry lacks the capacity to adequately supply the continent with essential medicines to combat the heavy disease burden that is grappling the continent. As a result, Africa relies heavily on imported medicines and vaccines to meet the growing needs of the population. Local pharmaceutical production promises to provide a sustainable solution to public health, industrial development and socio-economic issues on the continent. However, local pharmaceutical production does not make economic sense if the industry is unable to competitively produce quality medicine at prices that are comparable to or better than those of imported medicine. The aim of this study was to evaluate whether locally filling a multivalent vaccine used in paediatric immunization is economically viable when compared to the same vaccine currently imported semi-finished for labelling, packaging and distribution. Can a South African vaccine manufacturer produce the same vaccine cheaper than it currently imports? The objectives were to determine the production costs for both semi-finished product and local vaccine filling operations and to assess which option makes economic sense to pursue. The sub-objectives were to establish the extent and impact of the market size and demand for this vaccine on the decision to pursue local production versus importation. A case study approach was adopted as a research method to gain an in-depth understanding of the economic and production factors within the context of vaccine manufacturing with The Biologicals and Vaccines Institute of Southern Africa (Biovac) as a unit of analysis. Multiple sources of data were used to collect data for analysis. The study found that local production of this vaccine is economically viable and more favourable over imported product at current annual demand of 4.5 million doses. Local vaccine filling operations break-even point was found to be at 1.3 million doses when compared to 2.6 million doses for imported semi-finished product Whilst economies of scale cannot be disregarded for long-term profitability, this study found that economic viability can be achieved with an annual demand of 4.5million doses. The aim of this study was accomplished. This study contributes to the body of knowledge on local pharmaceutical production and serves as a baseline for further research in this area.
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Masters Degree. University of KwaZulu-Natal, Westville.