THE latest buzzword in the market now is vaccine, amid all the fanfare surrounding rubber glove makers who have been enjoying a spectacular run in the coronavirus disease (Covid-19) race.
If there is something that will stop the dominance of rubber gloves in their tracks it will have to be the development of a vaccine.
Enter the vaccine distribution play, something a lot of companies are trying to lay their hands on, judging by the number of companies jumping on the bandwagon claiming to be potential distributors.
It may make sense at the onset being a Covid-19 play, but the difference between manufacturing gloves and diversifying into one of the supply chains of the highly regulated pharmaceutical industry is world’s apart.
As easy as transporting and distributing may sound, moving vaccines around or even bottling it is no job for any Tom, Dick and Harry.
Unable to draw a fair line between objectivity and the fear of missing out on windfall profits like what the rubber glove makers made, companies that were practically unheard of, including those who do not have a nice financial track record are rushing into the scene.
Over the past weeks, the company announcements page was filled with filings of agreement signings for exclusive rights to do vaccine distribution, new subsidiaries being set up, change of names of subsidiaries to include the word “bio” or “biotech”, joint ventures with newly-formed companies for the purposes of vaccine-related businesses, among others.
An expert in the pharmaceutical industry tells StarBizWeek that the vaccine business is not as straightforward as pushing out rubber gloves or personal protective equipment (PPE).An approval will need to be obtained from the National Pharmaceutical Regulatory Agency (NRPA) which would take quite some time but this will of course, be fast tracked due to the urgency to curb the pandemic.
“The Health Ministry will be very careful. What if it doesn’t work or if there are side effects?
“And after obtaining the approval, companies need to convince doctors and hospitals to use it and usually, large chains have their reputation on the line so they will be extra careful too.
“If the vaccine is endorsed by a respected country, it will succeed here. If it’s by some unknown lab, then its a big question mark. One wonders if some of those companies making announcements related to vaccine distribution are more interested in playing their stock, ” he queries.
He adds that companies can sign whatever memorandum of understandings (MoUs) and agreements they want but without the NPRA approval, no vaccine can be brought into the country.
Another source says Malaysia is already renowned for its pharmaceutical distributors and all of them will definitely play in the Covid-19 vaccine field to earn from the markup.
“The margin will be higher if you do the bottling as compared to only distribution, because there are already so many of those guys in the market.
“Let’s say bottling is feasible for the new entrants but where is your market? Can you penetrate Indonesia, Thailand and the entire Southeast Asia?
“If yes, then you can make your margin. If your bottling is only for the Malaysian market, you are not going to make your money back because the cost of investment is too high, ” he says.
Having a manufacturing plant is where another set of limiting factors will arise, mainly surrounding human resources, which entails biotechnologists, pharmacists, lab technicians and infectious disease specialists.
And to set up a manufacturing plant, it will be nothing short of RM100mil so in the realm of the entire thing, this becomes very capital intensive and for a population of only 30 million, it is more feasible for Malaysia to import rather than manufacture vaccines locally.
Fill and finish process
For distribution, an industry source says the vaccine needs to be in an environment of 2°C to 8°C and some way lower at -20°C.
He stresses that those who claim they are going to do vaccine distribution must understand the needs of the packaging because even when the temperature has escalated out of its range, the entire supply of vaccine will be rendered ineffective.
“This is all the way from the importing country to Malaysia, before heading to the clinics and hospitals.
“It is critical that they remain very cautious of the temperature requirements, ” says the source.
Those thinking of embarking into the fill and finish business will first need to have a good manufacturing practice (GMP) certified manufacturing facility.
To build a fresh plant from scratch, it will take around two years and the GMP certification will take another year or two due to the strict requirements that need to be met.“For new fill and finish players, unless they are looking at three years or more to come, then it’s possible. If you’re looking at a six-month time frame, it’s impossible, ” the source says.
Perhaps a more viable business to venture into could be in the area of glass vial production since it is not that crowded.
Experts are already expecting a shortage of glass vials once the development of the Covid-19 vaccine is available for worldwide use.
This area is again, not just another container manufacturing business as the vials are made of special glass that has protection from ultraviolet (UV) light and infrared and is able to withstand certain temperatures
Because at the end of the day when the vaccine is compromised, it is nothing but just water.
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