Serum Institute of India CEO Adar Poonawalla made a bold appeal for the vaccine industry at Davos, calling for fair pricing regulations to enable growth and innovation. "We need to be left alone to price our products fairly," Poonawalla told Business Today Executive Director Rahul Kanwal, emphasizing that the vaccine sector does not require incentives or breaks but needs relief from rigid price controls.
Poonawalla highlighted the disparity in vaccine pricing, explaining that some vaccines are sold for less than the cost of a pair of roadside shoes. "What are we talking about? Vaccines sold at ₹1 or ₹200, and if someone wants to sell them at ₹300 or ₹400, that's not unreasonable. Yet, without consultation, MRPs are being reduced, not increased," he said, pointing to the financial strain such measures place on the industry.
Contrasting the vaccine industry with flourishing sectors like IT, auto, and finance, Poonawalla underlined its challenges. "The IT industry makes ₹1 billion per quarter; my industry doesn’t make ₹1 billion in a year," he said, lamenting that vaccine manufacturers lack the capital to invest in groundbreaking research or create jobs.
Addressing critiques that many vaccines are generic or off-patent, Poonawalla argued for a balanced approach. "Even if someone else developed the vaccine, if you're making it in India, there should be reasonable price controls—decided in conjunction with the industry," he said. Poonawalla stressed the importance of involving the Vaccine Manufacturers Association in policy discussions to foster collaboration.
Poonawalla warned that without profits to reinvest, the industry cannot create breakthroughs or develop next-generation vaccines. "If you want to see India produce global giants like Pfizer or GSK, the opportunity must be there. These companies are worth $100-200 billion, while we struggle to cross $1 billion," he said.
Poonawalla dismissed the possibility of taking Serum Institute public anytime soon. "With price controls, you can’t list a vaccine company. Even if volumes grow, margins are capped at 10-15%. Investors would question our valuation,” he explained, adding that listing might be considered in 5-10 years when the company has a more robust pipeline and multiple revenue streams.
Calling for a partnership between government and industry, Poonawalla emphasized the potential to make India’s vaccine sector as robust as its IT or financial sectors. "The government needs to relax certain restrictions. Only then can we create jobs, drive innovation, and make this industry flourish."