The COVID-19 pandemic and its lasting impact have made it essential for us to re-evaluate the state of our industries. The pandemic offers different challenges and opportunities for various chemical industries in the US, from pharma to supporting chemical manufacturers. Even though the initial vaccine manufacturing and export prospects are largely clinched by India, the US pharma industries still have a key role. Since it is impractical for a single country to provide for the world’s needs, our companies can partner with the companies and manufacture and market the vaccine within US territory. Pennsylvania-based Ocugen has recently sought to partner with India’s Bharat Biotech to commercialize the vaccine in the US. This could open up more opportunities for the vaccine industry within the US to do the same, in which case, we cannot afford to be caught unprepared for the market potential.
Vaccine Industry in the USA: Potential
The vaccine industry is a capital-intensive business that requires significant investments in R&D, manufacturing assets, facilities, and, more importantly, skilling employees in regulatory compliance. Despite the high capital required, NIH data tells us that the US has been the most successful vaccine developer in the past 20 years, with most new vaccines approved worldwide developed within US territory. In the last decade alone, the US has considerably improved its reliability as a vaccine supplier, primarily achieved by the modernization of vaccine manufacturing and logistics infrastructure. Strong demand backed up by robust R&D funding and support from governments are important driving factors of the sector, with public health agencies constantly on the lookout for better and cost-effective vaccines and immunization products and strategies. An increasing number of smaller companies has made sure that the market competition is healthy, which has increased the prospects of industry-led innovation. The global vaccines market is projected to reach USD 58.4 billion by 2024 from USD 41.7 billion in 2019, according to a report published in 2020 -- which is an underestimation since COVID has definitely improved the market demand for vaccines.
Despite Indian companies getting a headstart in commercialization, recent reports suggest that the shortage of vaccine raw materials has started to trouble manufacturers. The signs of input supply challenges are being observed across all vaccine manufacturing steps. These bottlenecks give the US companies opportunities to rise to the challenge and fill in the supply-side gaps. The Defense Production Act, a US federal law that has recently been invoked, gives the US companies considerable advantage and priority over other contracts to speed up manufacturing. The industries that can potentially benefit are those of bioreactor bags (made of LDPE, polyethylene terephthalate, and other polymers), single-use systems, filters, gamma sterilization systems (typically Cobalt-60 radioisotope), vials, cell culture media (high-standard glass products), and so-called lipid nanoparticles which are crucial to the pioneering mRNA vaccines produced by pharma companies like Pfizer and Moderna, etc. The pandemic-induced supply-side shocks can be solved and capitalized by ensuring that the companies that produce these raw materials tap into the domestic and international export potential that is running high.
Vaccine development is often a long and arduous process, with complicated regulatory norms, testing requirements, and phased trials. The industry should be in constant contact with regulatory agencies and academia and harmonize the process to enable faster timelines and better profitability. Another obvious challenge is the very character of the market, which is oligopolistic, with only three to four major companies dominating the sector despite the qualitative and quantitative changes in the demand-side. This has to be solved by concerted efforts from the industry and the governments by ensuring proper credit access and equal growth prospects.
The delicate balance of innovation, government forces, academia, and industrial expertise has resulted in establishing a robust framework that must be further enhanced to facilitate stronger credentials for the US vaccine industry in the competitive global arena.
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