From over 300 yuan to over 100 yuan, and now down to 63 yuan, the bidding price for the domestically produced bivalent cervical cancer vaccine has hit a new record low.
According to information released by the Hainan Provincial Center for Disease Control and Prevention at the end of April, the bivalent cervical cancer vaccine from Yuxi Zerun Biotechnology Co., Ltd., a subsidiary of Watsons Bio, won the bid for the HPV vaccine procurement project for eligible girls in Hainan Province in 2024, priced at 63 yuan per dose, with a purchase quantity of 107,000 doses.
Hainan Cervical Cancer Vaccine Procurement Project Winning Bid Information
Previously, Watson Bio set the industry abuzz with a "bargain price" of 63 yuan, following Wan Tai Bio's wholly-owned subsidiary Xiamen Wan Tai Canghai Biotechnology Co., Ltd. winning bids in Jiangsu, Guangdong, and other regions at a price of 86 yuan per dose. The echoes of star vaccines priced as low as a hundred yuan have not faded away.
The continuous price reduction of domestic bivalent cervical cancer vaccines reflects the issue of oversaturation in the domestic vaccine market. From the actions of relevant companies, it is evident that innovation and going global are measures taken to address this oversaturation. Some industry insiders also point out that unraveling the oversaturation in the vaccine industry requires policy guidance.
Why are domestic bivalent cervical cancer vaccines becoming increasingly affordable?
Cervical cancer vaccines, also known as HPV vaccines, are vaccines that can prevent cervical cancer and are currently the only vaccines in the world that can prevent cancer. Currently, there are five HPV vaccines in China, including three imported vaccines and two domestic bivalent vaccines.
The term "valent" refers to the number of HPV virus subtypes the vaccine can prevent. Cervical cancer vaccines on the market are mainly divided into bivalent, quadrivalent, and nonavalent. The earliest approved cervical cancer vaccine in China was GlaxoSmithKline's (GSK) bivalent cervical cancer vaccine. When the bivalent cervical cancer vaccine first entered the Chinese market, quadrivalent and nonavalent vaccines had already been approved abroad. Some voices believed that the bivalent vaccine introduced domestically was an outdated product that had been phased out.
Despite many authoritative voices emphasizing otherwise, the bivalent vaccine covers the two most common virus subtypes associated with cervical cancer. However, from the vaccination market perspective, quadrivalent and nonavalent cervical cancer vaccines are still more popular, with instances of "difficult to obtain" occurring in some regions.
Amidst the dominance of quadrivalent and nonavalent vaccines, domestic bivalent cervical cancer vaccine companies have also reaped benefits. Wan Tai Bio's bivalent cervical cancer vaccine was approved for market launch at the end of 2019, becoming the first domestic cervical cancer vaccine. Initially, the price of this vaccine was 329 yuan per dose. Looking at Wan Tai Bio's annual reports from 2020 to 2022, both its revenue and net profit have continued to grow. Wan Tai Bio attributes the positive impact to the bivalent cervical cancer vaccine in its growth reasons.
In March 2022, Watson Bio's bivalent cervical cancer vaccine was approved for market launch, becoming the second domestic bivalent cervical cancer vaccine in China. With multinational pharmaceutical company Merck continuously increasing the production capacity and supply of nonavalent cervical cancer vaccines, as well as advancements in simplifying the dosing regimen, bivalent cervical cancer vaccines are facing immense competitive pressure.
Merck holds the only globally approved nonavalent cervical cancer vaccine, primarily targeting the self-paying market. As some provinces/cities/autonomous regions support specific populations to receive cervical cancer vaccines through free vaccination or subsidies, Wan Tai Bio and Watson Bio have set their sights on the commercial channels of government procurement, marking the beginning of a price war between the two domestic bivalent cervical cancer vaccines.
Wan Tai Biology wins bid in Guangdong at a price of 116 yuan per dose
In May 2022, the bid results for cervical cancer vaccines published on the Jiangsu Province Public Resource Trading Platform revealed that Watson Biology and Wan Tai Biology jointly won the bid for the bivalent HPV vaccine in Nanjing. Watson Biology's winning bid was 246 yuan per dose with a planned quantity of 22,400 doses per bottle, while Wan Tai Biology's winning bid was 329 yuan per dose with a planned quantity of only 9,600 doses per bottle.
Wan Tai Biology also responded with price reductions. In July 2023, the Guangdong Provincial Government Procurement Center announced on its official website the results of the cervical cancer vaccine procurement project in Guangdong Province. Wan Tai Biology won the bid at a price of 116 yuan per dose, marking a 64% decrease from the initial price of 329 yuan.
Amidst internal competition, the performance of both domestic vaccine companies has been affected. In 2023, the revenues and net profits of Wan Tai Biology and Watson Biology both declined. Wan Tai Biology directly mentioned in its financial report that the sales of the bivalent cervical cancer vaccine fell short of expectations due to factors such as the expansion of the nine-valent cervical cancer vaccine age range and market competition. The first-quarter report of 2024 showed a continued decline in revenues and net profits for Wan Tai Biology and Watson Biology, with net profits dropping by around 90% year-on-year.
Innovation, internationalization... How can domestic vaccines break the cycle of internal competition?
In fact, the "internal competition" of domestic vaccines is not limited to the fate of the bivalent cervical cancer vaccine alone. According to a price adjustment notice released by the Jiangsu Province Public Resource Trading Center on May 20th, the bid price for the four-valent influenza virus split vaccine produced by the China National Pharmaceutical Group's Changchun, Wuhan, and Shanghai institutes has dropped from 128 yuan per dose to 88 yuan per dose, a decrease of over 30%.
The price adjustment notice released by the Jiangsu Provincial Public Resource Trading Center on May 20th.
"The vaccine industry is very much like the pharmaceutical industry, with intense internal competition," said Zhu Tao, Chief Scientific Officer of Kangxinuo Biotech, in a recent interview with Pengpai News. He pointed out that for vaccines such as HPV, pneumonia, and meningitis, there are over a dozen companies developing them. To some extent, this results in a waste of overall resources.
Liao Jingyi, a healthcare industry analyst at Head Leopard Research Institute, told Pengpai News reporters that many regions have not yet tapped into the demand for vaccines. Coupled with weak consumer demand and existing overcapacity, the current vaccine market is oversupplied. Companies are slow to respond to market demand, leading to a mismatch in supply, and vaccine prices are continuously decreasing under market mechanisms. In the future, as market demand stabilizes and immunization plans adjust, the vaccine market is expected to find new growth opportunities, covering a broader market.
Liao Jingyi believes that the key to the innovative development of China's vaccine industry lies in researching and updating vaccine technologies and actively expanding into international markets. In terms of research and development, companies need to increase R&D investment, break through technological barriers, optimize vaccine production processes, develop new vaccine platforms to enhance vaccine effectiveness and safety. Companies should have strong R&D capabilities and high-level R&D teams, closely cooperate with domestic and foreign research institutions, and continuously drive vaccine technology innovation. However, companies face challenges such as high technological barriers, long cycles, high risks, and regulatory restrictions.
Source: Huatai Securities Research Report
From publicly available information, it is evident that various enterprises are focusing on innovation and international expansion.
Wan Tai Biology and Watson Biology, both engaged in a price war in the bivalent cervical cancer vaccine market, are now positioning themselves in the market for the nonavalent cervical cancer vaccine, with both currently in Phase III clinical trials. Wan Tai Biology announced on April 10th that the nonavalent cervical cancer vaccine had completed the V8 visit as planned (expected follow-up approximately 30 months after the first vaccine dose), with the main data analysis focusing on the accumulation of endpoint events related to sustained infection up to the 12-month mark as per the study protocol. Unblinding has been completed, and preliminary analysis of the main data has been obtained. In an investor activity record disclosed on May 18th, Watson Biology mentioned that the Phase III clinical trial comparing the immunogenicity of the nonavalent HPV vaccine with similar vaccines is currently in the data statistical analysis and clinical research report writing stage, with no estimated market launch date at present.
Merck's nonavalent vaccine leads the way, while local vaccines such as those from Shanghai Biotech and Kang Le Wei Shi are also expected to be approved in the coming years. Whether the nonavalent vaccine will continue the trend of price wars like the bivalent vaccine remains a significant unknown.
Zhu Tao believes that each enterprise considers its vaccine to be the best, but ultimately, they must undergo clinical and market scrutiny to reasonably eliminate some. Regulators should encourage early-stage innovative enterprises in a certain type of vaccine to accelerate research and development, while not allocating excessive resources to generic vaccines. Simultaneously, innovative products, including vaccines, need to be adequately rewarded. Once payment issues are resolved, companies will have the motivation to invest more in innovation.
Domestically successful companies are now looking to expand internationally, a trend also applicable to vaccine enterprises. Watson Biology recently stated that they are working on WHO pre-qualification for their bivalent cervical cancer vaccine and are simultaneously advancing cooperation projects with some countries, aiming to achieve early export of the product. Wan Tai Biology also mentioned in their 2023 financial report that their bivalent cervical cancer vaccine has obtained market approval in Cambodia, Ethiopia, Kazakhstan, Kenya, and Burkina Faso, with around 17 countries in the registration access process.
Liao Jingyi believes that when expanding into international markets, companies need to have a deep understanding of the cultural backgrounds, disease prevalence, and vaccination habits of different countries and regions. Tailored market strategies should be developed to meet local market demands. Companies will face challenges in international expansion, such as strict certifications, intense international competition, and trade barriers.
