Winning in the APAC private vaccines market
By: Catherine Kuah and Sampath Nachiappan
With an increased focus on the vaccines market due to the COVID-19 pandemic, there’s been a heightened emphasis on preventive healthcare globally, and the Asia Pacific (APAC) region is no exception. As demand for innovative vaccines grows worldwide, pharmaceutical companies are eyeing the APAC region as a promising market due to its large population and rising healthcare awareness. Emerging countries in the APAC region also offer significant opportunities for vaccines targeting endemic infectious diseases.
While APAC presents an attractive market, commercialization of vaccines in the region presents several challenges, especially when balancing profitability while ensuring broad market access. Increasing pressures on healthcare systems to reduce overall spending has made commercialization in the public markets increasingly difficult. However, the growing middle class in APAC, coupled with rising demand for better healthcare, provides an opportunity for companies to turn to the private market for higher value growth. The private market also presents opportunities for vaccines’ first entry into some countries, especially when getting inclusion into national immunization programs (NIP) may take longer. Launching in private markets enables pharma companies to drive early adoption, build opinion leaders, and generate early evidence, which can facilitate future NIP inclusion.
The private vaccine market in APAC is increasingly attractive for pharmaceutical companies due to growing challenges in public market access and increasing growth opportunities within the private market.
Challenges in public market for vaccines:
1. Higher payer scrutiny for national access, especially with high budget impact of vaccines: The cost-effectiveness and budget impact of vaccines are increasingly scrutinized by national payers (government healthcare systems) for inclusion in the national immunization programs (NIP). Spending levels on vaccines vary across the APAC region, with South East Asia (SEA) countries spending between 0.1 and 1.7 USD per capita on routine vaccinations, while countries like Australia and South Korea spend more than ~10x at 12 USD and 13 USD per capita, respectively1.
2. Increased competition with therapeutics for public funding: Vaccines often compete with other therapeutics, such as drugs or medical devices, for the limited public funding available which adds further constraints to ensure NIP inclusion.
3. Long time to achieve public NIP inclusion: The evaluation process and time required to achieve NIP inclusion varies across countries. This process typically involves an extensive evaluation of vaccine safety, efficacy, cost-effectiveness, and overall public health impact. Sometimes, the evaluation process can take several years before a vaccine is included in a country’s NIP, further limiting the vaccine’s market opportunity. Besides taking a longer time to obtain approval in APAC countries post approval in the US or EU (e.g., there is a median lag time of ~2–5 years between US & EU approval and APAC countries — Australia, Singapore, South Korea, Thailand2), SEA countries also tend to take an additional 5 to 6 years to integrate new vaccines into their NIP, compared with more developed countries such as Japan and South Korea, delaying vaccination rate uptake in SEA1.
4. Restricted coverage to a sub-population: Even when vaccines are included in NIP, they may be restricted to specific subpopulations, such as high-risk groups or certain age cohorts with higher unmet needs, further limiting market potential. Additionally, the likelihood of innovative vaccines being included in NIP could be lower in some countries due to higher pricing and budget impact unless there is a significant unmet need in the market.
Expanding growth opportunities in private market:
o Growing mid to high-income population groups expected to drive demand in private markets: As the middle to high income population in the region continues to rise, with estimated 2x growth from 2015 to 3.5 billion middle-class population by 20304, there is an increasing ability and willingness to pay for healthcare services, including vaccines.
- More flexibility to differentiate and drive value on clinical benefits besides price: With reduced pressures to demonstrate cost-effectiveness in public markets, companies have more flexibility to differentiate their vaccines based on clinical benefits. In private markets, companies often have more flexibility in setting prices, allowing them to better extract value for the differentiation their vaccines offer.
Key success factors for commercialization in private vaccine markets
When commercializing in the private vaccine markets, companies need to consider the unique set of private market drivers and design their execution strategies accordingly. While evidence generation remains a key tenet of success for both public and private markets, the nature of stakeholder engagement and the focus of market shaping efforts can differ. Success in public markets often requires an understanding of the national health agenda, NIP decision-making pathway, and payer & policy stakeholders involved. In contrast, winning in private markets may require strategic implementation across the ecosystem and engagement of multiple players — key opinion leaders, HCPs, consumers, caregivers, etc. We will further explore some general key success factors to win in private markets, noting that the importance of each factor may vary depending on country dynamics.
1. Factor #1: Identify the appropriate target consumer population cohorts:
In cases where vaccines are indicated for a wide range of population cohorts, companies may need to focus their efforts on specific population segments that present more attractive market opportunities. Attractiveness depends on various factors, including the potential market size of the different population segments, their unmet needs, the vaccine’s value proposition, and how well the vaccine is differentiated against existing options.
2. Factor #2: Understand consumers’ willingness to pay (WTP):
In preventive medicine, consumer willingness to pay is a critical factor to drive vaccine uptake, especially if awareness and understanding of the disease is low. Consumers’ willingness to pay is also highly shaped by prescribers’ willingness to recommend, particularly when consumers have low understanding of the disease or perceive their exposure to the disease as low. Companies need to understand the segment-specific dynamics among consumers in the markets, which could be defined by varied levels of purchasing power, vaccine hesitancy, education levels, cultural norms and rural vs. urban geographies. Different consumer segments are likely to have different perceived levels of need and importance attributed to the vaccine in disease prevention and hence different willingness to pay levels. Understanding current vaccine options available and their prices can also inform consumers’ willingness to pay levels and inform pricing strategy. Consumers’ willingness to pay can also play an important role in helping prioritize appropriate target consumer population cohorts.
3. Factor #3: Understand the consumer journey to identify key strategic levers to maximize vaccination and drive brand choice:
Understanding the drivers and barriers at each stage of the consumer journey, from initial presentation at the doctor’s office to getting vaccinated, is crucial for identifying key strategic areas for intervention. For example, uncovering reasons for consumers not accepting vaccination despite HCPs’ recommendation — such as affordability concerns, low disease importance, and lack of disease awareness — can help companies focus on the right levers to address these drivers and barriers. Additionally, identifying the decision-makers or key influencers of vaccination and brand choice, and understanding their key decision drivers, is important for informing the vaccine’s positioning strategy. It should be noted that the prioritized decision drivers may vary for different stakeholder types (physician, consumers, caregivers, others, etc.), and this could form key levers of strategy development, execution, and market education.
4. Factor #4: Understand perception of disease burden, unmet clinical need, and satisfaction with existing alternatives:
After developing a clear understanding of the different stakeholders in the ecosystem, it is important to understand their perceptions related to disease burden, remaining unmet needs, coupled with their satisfaction levels of existing alternatives. In several APAC countries where epidemiology data may be scarce and limited, it is important to identify gaps between perceptions of unmet need vs. true unmet need. This can help companies identify opportunities for education. Without wider recommendations from national payers and inclusion into NIP, comprehensive education of the different stakeholders within the ecosystem will be required to establish the vaccine’s importance, especially if consumers need to be convinced to self-pay for the vaccine. Additionally, different stakeholders in different countries may value local, regional, and global data differently to make decisions in their local practice. Therefore, it will be important to identify the types of evidence more likely to be relied on and valued, particularly when evidence generation efforts require substantial investment and time.
5. Factor #5: Understand the role that local scientific leaders and medical associations have in shaping initial adoption:
In the absence of wide national funding coverage to drive disease and vaccination awareness and consumer acceptance, endorsements from local scientific leaders and medical associations may have a strong influence. These endorsements are especially important in driving awareness regarding disease burden and knowledge of emerging innovative vaccines. While in some countries these scientific leaders may not be the primary vaccinators, they may play a key role in shaping immunization guidelines and influencing the recommendation behavior of the core group of vaccinators.
6. Factor #6: Identify and engage strategically prioritized groups of customers:
Given that the first launch could potentially be in private markets in some countries, companies need to prioritize and strategize their customer engagement efforts on the most important customer segments to drive adoption that can deliver maximum impact on growth. Understanding the key decision-makers and their value drivers can guide identification of the customer groups that will deliver the most business impact and are most feasible to drive the required behavior change.
Conclusion
Overall, understanding the ecosystem of players and their strategic considerations is key to winning in the private vaccine market in APAC. The above key success factors should be carefully considered when planning for launch and commercialization in the private vaccines market in APAC.
