Just a few years ago, vaccines were a smaller part of the Indian pharmaceutical business with comparatively lower revenue than other segments. However, the sudden demand for COVID-19 vaccines has made a significant contribution to the change in fortunes of the players in this niche segment.

While the vaccine market was approximately Rs. 8,000 crores in FY 2019-20, it is now expected to reach approximately Rs. 14,000 crores during FY 2020-21. This 75% growth comes as a result of a sudden COVID-19 vaccination drive in the last quarter. While it may appear unbelievable but based on current and future vaccination trends, the vaccine industry is expected to reach a whopping Rs. 80,000 crores during FY 2021-22.
Among the biggest contributors to COVID-19 vaccine market are the Pune-based Serum Institute of India (SII) and Hyderabad-based Bharat Biotech International, the only manufacturers, and suppliers of the COVID-19 vaccine so far in the country. According to Indian Chemical News, the combined revenue of the two companies from such sales alone is expected to be Rs. 70,599 crores in the 2021.
India has so far administered over 14 crore 33 lakh COVID-19 vaccine doses. As per the government of India-operated Co-Win dashboard, as of 27 April 2021, Covishield accounts for 91.1% of the overall vaccine doses administered in India, whereas 8.9% belong to Covaxin. While over 13 crore Covishield doses have been given across the nation, Covaxin doses have already crossed the 1 crore 32 lakh mark.

Based on trends, Serum Institute of India is expected to clock over Rs. 59,400 crores in revenues through its COVID-19 vaccine deals by 2021 end. It will be humungous growth compared to company’s revenue of Rs. 5,014 crores during FY 2019-20.
Based on the available data, the rough calculations suggest that the company has so far generated a revenue of Rs. 3,630 crores from overall COVID-19 vaccine sales. By the end of this year, it is expected to generate Rs. 22,080 crores in revenue from domestic sales. From the export standpoint, the remaining doses to COVAX will fetch Rs. 10,320 crores in sales, and even if we consider only 50% delivery for commercial deals worth 90 crore doses, the figure will be mammoth Rs. 27,000 crores.

With its R&D risks paying off, Covaxin is predicted to fetch more than Rs. 11,199 crores for Bharat Biotech during 2021. This will be the biggest ever jump (more than 10-fold growth) for the company whose revenue in FY 2019-20 stood at Rs. 1,066 crores with a 36% growth rate.

The company is supposed to have garnered revenue of Rs. 1,720 crores from vaccination program and Rs. 879 crores from exports. In both cases, it has sold the vaccines at Rs. 150 per dose to the central government. By the year-end, the company is expected to generate 10,500 crores from domestic sales to all players. The exports are expected to fetch Rs. 900 crores.

Extraordinary demand to propel growth

From 1st May onwards, India will open doors of immunization program for people in 18-45 years age category, consisting almost 60% of the population. The larger goal is to vaccinate all of 138 crore population by the mid of year 2022.

The Serum Institute of India has produced 16 crore doses of Covishield since January, 2021. It plans to ramp up production to 10 crore doses a month by June, 2021. In the next 6 months, it is expected to produce 80 crore doses in which 50% of the lot will go to the central government and rest 50% to the state governments. While it has initially provided the vaccine to central government at Rs. 150 per dose, it plans to give the same to state governments at Rs. 300 per dose and to private market at Rs. 600 per dose.

The company is also supposed to deliver 20 crore doses to Covax - the WHO-backed vaccine sharing program, 10 crores each of the AstraZeneca and Novavax vaccines. It so far delivered only 2.8 crore doses and is expected to deliver the rest of the doses in the next few months. The company has entered into commercial deals amounting to more than 90 crore doses of AstraZeneca vaccine, and 14.5 crore doses of Novavax, according to UN data.

Bharat Biotech’s Covaxin is priced at Rs. 150 each for 38.5 lakh doses for the central government. The selling price for state governments and private market is Rs. 400 and Rs. 1,200 respectively. The company now has four production facilities in Hyderabad and two more will open in Bengaluru soon and by July-August, the company will have the capacity to produce 70-80 crore doses per year. The company produced 1.5 crore doses in March and in April it will produce 3 crore doses shortly.

In the coming months, most of the vaccine business is expected to be home-driven due to the surge in the cases and the resultant increase in demand. While the biggest strength of the Indian vaccine industry remains its quality and affordability, a few of the challenges include the high cost of vaccine storage and transportation, stringent regulations, and drug-development hurdles.

Table1: Serum Institute of India

COVID-19 Vaccine Sales During 2021 (in Rs. Crore)

*Estimates by Indian Chemical News

Table 2: Bharat Biotech International

COVID-19 Vaccine Sales During 2021 (in Rs. Crore)

*Estimates by Indian Chemical News