How India landed in the rabies vaccine doghouse

22-year-old Bale Hasda, who goes by the name Sumi, was bitten by a stray dog in Delhi’s upscale Lodhi Colony on 11 March. She wasn’t the only victim, or even the worst affected. A few others in the neighbourhood were bitten as well, with one senior citizen dying as a result of the dog attack. 

Fortunately for Sumi, her employer rushed her to Delhi’s Safdarjung Hospital, one of the few public health centres in the national capital that still have stocks of the vital anti-rabies vaccine (ARV). As ARV supplies at other public hospitals dry up, Safdarjung Hospital has seen its anti-rabies clinic overwhelmed with victims of dog bite cases.

Sumi received a tetanus injection and a shot of the life-saving rabies immunoglobulin—a serum administered for deep animal bites and scratches—and also a series of five ARV injections over the next few days. The last of these injections was on 8 April, nearly a month since her ordeal began. All told, the treatment cost her Rs 3,000 ($44), while the serum was given free of cost. At a private healthcare provider, this could have cost as much as Rs 15,000 ($218).

Without timely medical intervention and the availability of the ARV, Sumi’s story could have panned out very differently. Others have not been as lucky, turned away from their closest public hospitals due to the non-availability of the ARV in Delhi. Elsewhere in the country, the situation is equally dire. Karnataka, Jammu and Kashmir, and Punjab among various other states are all running out.

“Various reports in the past few months indicate that several states in the country have reported 60-80% shortage of ARV, due to a combination of factors including growing demand, imperfect demand signal, and supply disruptions”

Prasanna Deshpande, deputy managing director of Indian Immunologicals Limited

That this would be the case in India is a bit of an oddity because literally nowhere else is the need for ARV more obvious. India accounts for 36% of deaths due to rabies worldwide. Some 20,800 deaths every year, most of them children under the age of 15, according to a 2015 study published in the PLOS Neglected Tropical Diseases journal. 

India is also home to the largest anti-rabies vaccine manufacturer in the world—formerly GSK-owned Chiron Behring Vaccines, which has now been acquired by Bharat Biotech. 

On its own, Chiron Behring’s facility had a capacity of 15 million doses, almost a third of the national yearly requirement of 35-48 million doses. In fact, India’s four ARV manufacturers—Hyderabad-based Bharat Biotech and Indian Immunologicals Ltd, Ahmedabad-based Cadila Healthcare, and Pune’s Serum Institute of India (SII)—have a combined capacity of 40-50 million doses annually. (These figures are based on media reports and Bharat Biotech’s founder-chairman Krishna Ella’s estimates. There are no official figures as no official study/estimate has been done on the demand.)

But even with adequate demand, tremendous market potential, and adequate combined capacity, state governments are finding it hard to procure the vaccine. India is staring at an 80% shortage of ARV.

Government authorities have put the blame squarely on manufacturers, claiming their focus on exporting ARV is the reason for the shortfall. Government officials say this is because ARV fetches a higher price abroad—around $30 versus Rs 300 ($4.4). Consequently, manufacturers have ignored various tenders floated by state governments for the bulk purchase of the vaccine. With the state unable to procure the vaccine, public health centres have been told to deal directly with distributors who sell the vaccine at a considerable mark-up.

With a looming public health crisis in the offing, the Indian government has mulled capping exports of ARV altogether. Manufacturers, however, believe the government’s knee-jerk reaction will solve nothing in the long-term. They claim they simply do not have the capacity to meet states’ requirements and point to systemic issues with procurement as the root cause of the problem. The cap, they argue, will only hurt their international commitments. 

Meanwhile, the likes of Sumi must hope that their nearest public hospital is one of the rare ones still stocking ARV.

SOS from states

The World Health Organisation (WHO) estimates that rabies causes some 59,000 deaths worldwide each year. The overwhelming majority of these—95%—take place in Africa and Asia. This number, however, is believed to be lower than it should as widespread underreporting and uncertain estimates mean the true burden of the disease is unknown. The disease is also largely dog-mediated, with rural populations disproportionately affected.

India, with its lax animal sterilisation measures, sees 1.75 million dog bites a year according to the National Health Profile 2018. Unsurprisingly it is the worst-affected country when it comes to rabies. And things are getting worse. In 2017-18, the southern state of Karnataka reported 1,09,462 dog bites. With just over half of 2019 gone, the number of dog bites already stands at 83,837. According to government figures, Karnataka and West Bengal together account for half the country’s rabies cases.


Even so, Karnataka is woefully underprepared for the rabies situation in its backyard. Earlier this month, it asked neighbouring Kerala and Tamil Nadu for ARV supplies after public hospitals in the state began to run dry. While Kerala sent 10,000 vials of ARV and 2,000 vials of rabies immunoglobulin serum, Tamil Nadu sent 5,000 vials of ARV. These supplies, though, are like a bandaid on a bullet wound. The state announced that these supplies would only last for the next two to three months. 

The situation is similar in Delhi. Ashok Rana, the city’s director general of health services, told The Ken that ARV stocks will last for the next two months. Mere weeks ago, the state floated a tender to procure ARV; it received just one bid. Now, the state is counting on the single manufacturer who came forward to bail it out of its current predicament. Rana refused to divulge the name of the manufacturer as the tender is yet to be finalised.

Kerala and Tamil Nadu, on the other hand, were able to help Karnataka because they have three-year contracts with manufacturers for ARV supply. Karnataka’s contract was just a year-long. Since December, Karnataka has floated two tenders for ARV procurement; manufacturers stayed clear of both. The procurement is handled by the  Karnataka State Drugs Logistics and Warehousing Society (KDLWS).

Latha Pramila, chief supervisor of drugs for KDLWS, says they are unable to make centralised procurements because manufacturers are not bidding. “We have released money to healthcare facilities for local purchase, but at a higher price,” she says.

Bulk buys

With a shelf life of 12 months and at an average price of Rs 200 per vial, it costs Rs 8 crore to make a bulk purchase of 4 lakh vials for Karnataka

 Having to buy from dealers is not sustainable, as they come with a substantial mark-up. “The dealers’ margins are 30% to 35%,” Latha says. But while a tender system would allow governments to procure ARV at lower rates, manufacturers prefer doing business with dealers who require smaller quantities but are willing to pay more.

Broken tenders

Buying from dealers, however, is not a solution to the problem at hand. Karnataka’s annual requirement is 350,000-400,000 doses of ARV, a quantity no single dealer can match. At present local health centres in the state are directly dealing with different dealers in their districts to bridge the shortfall.

All of this could be avoided with a centralised system of procurement, and, to be fair, it exists. But it’s broken and antiquated.

According to manufacturers, the rate-contract system employed by states asks a lot from manufacturers while giving precious little in return. Right at the outset, the rates governments are hoping to procure at leave vaccine makers feeling shortchanged. According to Sunil K Bahl, former director of business development at SII, prices per dose under tenders are particularly low. “In the open market, the manufacturer can get Rs 250 ($4),” Bahl says. These prices are already low as ARV is listed as an essential drug, meaning its price is capped by the National Pharmaceutical Pricing Authority, he adds.

Karnataka is a great example of this price discrepancy. In 2017-18, the Karnataka government procured 250,000 vials of ARV from Indian Immunologicals at a price of Rs 172 ($3) per vial. Currently, since the Karnataka government has asked hospitals to purchase the vaccine from local dealers, they are getting it at Rs 270-290 ($4-$4.2) per vial. The market rate is higher still—Rs 340 ($5).

Waste not, want not

Used intradermally, one vial can be used to treat five patients. Intramuscularly, though, it can be used on only one patient. But once opened, it has to be used within eight hours. As a result, for facilities with low patient footfall, intramuscular injections are more preferred despite the scarcity of ARV

“If you don’t bid low, you won’t get the tender. State governments should introspect why manufacturers are not coming forward to bid,” Bahl said. As of now, only primary manufacturers are allowed to participate in tenders due to quality concerns.

But this is only the tip of the iceberg as far as tenders go. According to Prasanna Deshpande, deputy managing director at Indian Immunologicals, the rate-contracts employed by various states are riddled with shortcomings. While they fix the purchase price of vaccines, they do not specify the exact quantities of vaccines required. This is down to the fact that estimates of vaccine demand are often inaccurate—usually projections based on utilisation in the previous two years.
“This makes it difficult for manufacturers to plan their capacities properly, and this adds uncertainty and leads to demand-supply friction,” Deshpande says.

While long-term contracts gives states the assurance of supply, manufacturers are uncomfortable with this as they are liable to governments for longer periods. None of this is helped by the lack of central guidelines on vaccine procurement.

KDLWS’ Latha Pramila makes no bones about the exacting nature of these contracts. “Our contracts require the manufacturers to pay an advance amount like a security deposit (to assure quality and accountability), and contracts come with a penalty clause. They don’t have to adhere to our conditions if they sell in the open market,” she says.

The conditions of the government are getting tougher every day, Bahl points out. “Earlier, there was a one-year tender, now they want a contract for two years. Payments are delayed for 90-120 days,” he says. 

With the terms seemingly stacked against them, it’s little wonder that Karnataka’s most recent tenders for ARV have gone unanswered.


A shot in the arm

Is the current vaccine shortfall doomed to continue then? Not quite. Industry insiders say that the situation is particularly bad at present owing to recent circumstances, and believe it will improve in a few months.

The biggest change on the ARV front has been Bharat Biotech’s all-cash acquisition of Chiron-Behring from pharma major GlaxoSmithKline. Bahl told The Ken that the current shortage was because of the halting of production by Chiron-Behring. Chiron-Behring’s Ankleshwar facility previously produced 15 million doses of the vaccine, making it the single largest producer of ARV in the world. 

While it will still take another few months before the plant is up and running again, the ARV crunch should ease considerably after this happens. Bharat Biotech did not respond to The Ken’s emailed questionnaire regarding its plans.

Indian Immunologicals, which has manufactured ARV for more than 15 years now, is also looking to increase ARV production. It has a current capacity of 10-15 million doses, more than 50% of which is sold in the domestic market. “In the past, we used to supply to more than 10 state governments, but now it is down to a single digit,” he says. This was because of the difficulty of dealing with state governments—fulfilling their criteria and delayed payments. The company also exports to countries in Asia, the Middle East, and Africa.

On 24 June, Indian Immunologicals announced the setting up of a new manufacturing facility in Telangana. This will increase its capacity to supply its ARV, Abhayrab™. The new facility is expected to be ready later next year. The company currently has one operational facility in Tamil Nadu. This will also help the situation going forward, however, it will be two years before the vaccines from the new facility hit the market.

Despite the current supply crunch, Indian Immunologicals’ Deshpande insists that the situation doesn’t require drastic measures. “The problem is being solved with the government tracking supplies and manufacturers ramping up capacity. The situation will ease in the coming months,” assures Deshpande.

Cap-acity

The government, however, feels otherwise. As lines outside anti-rabies clinics grow longer, the government is mulling a 30% cap on ARV exports if not an outright ban. “The government should have a dialogue with the manufacturers before mulling a cap or ban on exports,” Bahl says. In April this year, it did just that. Still, states continue to receive no response to their tenders.

But while an export cap may force manufacturers to come to the table, an outright ban would seriously wound them. “We have contracts with international partners. If we are not able to supply, there will be financial repercussions. It will also not be good for India’s reputation as an exporter of pharmaceuticals and vaccines, as we are a bright spot in the industry. A ban will be undesirable,” Deshpande said.

Rajeev Dheere, executive director of SII, concurs. Only SII and Cadila are WHO pre-qualified, meaning they are approved by the WHO to provide their vaccines to international agencies and markets. This, understandably, makes export a very important market for both. Even so, Dheere says, exports won’t exceed 4-5 million doses for both Cadila and SII combined. 

“The government must tell us in advance what they want. One cannot estimate the number of dog bites but they have to take risk, buy stock, and replace it in two years if unutilised”

Rajeev Dheere, executive director of SII

“When the health ministry called for a meeting, we explained that if they inform us of their requirement, their tender volume, and if it is for a particular period or month, we will tackle it easily,” Dheere said. Like Indian Immunologicals, SII also maintains that at least 50% of its vaccines are sold in the domestic market.

Manufacturers suggest that adding ARV to the Centre’s universal immunisation programme could solve this problem altogether. It would ensure the Centre procures the rabies vaccine like it does in the case of other diseases. For example, the Measles-Rubella vaccine was centrally procured for the whole of India. “No state bought it. Pentavalent, Hepatitis B, Tetanus, Measles-Mumps-Rubella, Measles-Rubella, all vaccines are bought by the Centre. Rabies is the only vaccine which states procure,” Dheere points out. 

This is how it’s done the world over, Dheere adds. The central government should take inputs from states on their requirement, procure it and then distribute it, he suggests. When all other vaccines are centrally procured, there is no reason why the rabies vaccine is any different. While caps and bans may make for good optics and show a sense of urgency, they will ultimately leave the root cause of the problem untreated.

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