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Certification, corruption, and cost: The fight for a vaccine production policy

India is a global exporter of vaccines but 50% of our children under one are not completely immunised. The government has ordered the reopening of vaccine-manufacturing PSUs, but a strategic plan on consistently meeting India's basic vaccine needs is still not clear. Venkat Srinivasan tells the story of India’s vaccine production programme, a story of politics, dishonesty and misguided priorities

50% of our children under one are not completely immunised

When President Pratibha Patil mentioned the Universal Immunisation Programme (UIP) in her address to the nation soon after the 2009 elections, she directed that children across India should get access to essential vaccines. 

That was the directive. What wasn’t clear, though, was the implementation, which has many angles to it: do we need vaccines for all public health problems, how do we make them, how do we deploy them, and, then, two angles that this report will question: Who will make these vaccines that are included in the national list of essential medicines from the Ministry of Health and Family Welfare? And how do we verify that they are safe for use? 

India has used vaccines -- for smallpox and typhoid -- since the early part of the 20th century. Vaccination against smallpox heralded the development of the Expanded Programme on Immunisation in 1978. Then, in 1985, India pushed forward the Universal Immunisation Programme (UIP) to reduce mortality and morbidity from certain vaccine-preventable diseases. The programme today mandates that vaccines for six diseases – for tuberculosis, diphtheria, tetanus, pertussis, polio and measles – be provided free of cost to children less than a year old. Hepatitis B is being planned as well, with considerable controversy: Opponents argue that it is pointless trying to include new vaccines. They also point out that the country has dismal vaccine coverage. “At present there is only 50-54% coverage of the UIP,” said S Srinivasan, head of Locost (Low Cost Standard Therapeutics), a not-for-profit pharmaceutical company in Vadodara. Much of this disparity is a consequence of deployment issues in the field, aided by lack of efficient storage facilities in remote areas. 

If the end goal is to reduce deaths from preventable diseases, there are many paths to that, experts say. Many infectious diseases transmit through water contaminated with faeces. "Clean assured water supply is an obvious and tested solution for this, and its cost can be estimated reliably, unlike the costs of developing new vaccines for all the different diseases involved," writes Dr Satyajit Rath in a 2000 issue of the Indian Journal of Medical Ethics

Aside from the public debate over vaccine research, however, vaccines do help reduce deaths. Measles deaths, for instance, came down from about 1,60,000 in 1988 to less than 40,000 in 2002, according to the Central Bureau of Health Intelligence. Pertussis had a similar decline. While it is always hard to say what saved a life, it is reasonable to conclude that vaccines played a huge role in those declining numbers. 

But India's infant mortality rate is still high: on average, 54 per 1,000 live births in 2007 according to the 2009 UNICEF State of the World's Children report. The UIP may not necessarily contribute to reducing this number, as the high mortality rate is largely due to neonatal deaths deaths in the first month of life. But successful implementation of the UIP will drastically reduce the mortality of children under five years (at 72 per 1,000 children in 2007). 

Vaccine production in India has gone through significant changes within the last few years. Till about the end of 2007, three public sector units (PSUs) – BCG Labs in Chennai, Pasteur Institute in Coonoor, and Central Research Institute (CRI) in Kasauli -- provided much of the country’s essential vaccines. For instance, BCG Labs in Chennai produced more than 500 lakh doses of BCG vaccine annually by the end of 2002 (India now needs about 760 lakh doses this year, and BCG Labs was planning to gear up for 800 lakh doses to fulfil the requirements, according to statistics seen at its Chennai office). 

But in January 2008, after a WHO-led team found that the labs were not compliant with the latest manufacturing norms, the Ministry of Health and Family Welfare agreed to suspend the licenses of these PSUs. Private players stepped up their production soon after, and currently a majority of vaccines) come from private manufacturers. 

And with that, we could say, the dust settled, if it were not for a proposed Vaccine Park in Chennai, run by HLL Lifecare, another government-owned establishment. The Vaccine Park is supposed to function by 2012 and provide 100% of the country’s vaccines.  

In early-2009, a parliamentary committee had investigated the suspension of the vaccine-producing PSUs that initially led to the transfer of production rights to certified private manufacturers. The published report shows that the committee members found the health ministry, and not the PSUs, at fault. Health experts weren’t pleased either. “India, in its public sector units, should produce the vaccines it requires even if it has to buy the technology from the private players,” said Dr Omesh Bharti, an epidemiologist with the directorate of health services in Himachal Pradesh. 

In response to the committee's findings and political backlash, the Ministry of Family Health and Welfare set up an oversight committee in early-July 2009 to revamp the three labs. CRI in Kasauli, BCG Labs in Chennai and Pasteur Institute in Coonoor will be revived after the PSUs are all certified according to international norms, said Health Minister Ghulam Nabi Azad in response to queries from Rajya Sabha MP T K Rangarajan in September 2009.  

As of October this year, the Drugs Controller General of India (DCGI) inspected the facilities at CRI and Pasteur Institute over multiple visits, and the government released money to renovate them to make them compliant with international norms. They had not made any visits to BCG Labs in Chennai by then.  

By promising to reinstate the PSUs, the government (not necessarily the same government officials) went back on a major policy decision within a couple of years, indication perhaps that not all was transparent. Further, India is also now a global exporter of vaccines. UNICEF gets 80% of its paediatric vaccines from India, Indonesia, Brazil, and South Korea; India provides 60% of these paediatric vaccines, according to a March 2007 report by the World Bank's Disease Control Priorities Project. “Very few countries in the third world make vaccines -- India exports to much of South Asia,” said Srinivasan. Vaccine production, then, is not just about fulfilling essential needs. Vaccine production policy is also a struggle in certification, corruption and cost. It is riddled with complexities in procuring licenses and technical knowledge, and further, vaccine deployment in the field without strong control measures comes with avoidable human costs. .  


The World Health Organisation (WHO) sets a list of Good Manufacturing Practices (GMP) for all its member countries. These concern the technology, production, processes and methodology -- manufacturing a seed or base strain of vaccine from which a company will make copies for production, manufacture and transfer of vaccine into vials for distribution, cold storage for field use -- for producing globally used drugs like vaccines. When the WHO had surveyed the three PSUs in 2007 and early-2008, it found that they were not compliant with the latest norms. It then notified the government’s Central Licensing Approving Authority (CLAA), which chose to suspend their licenses.  

But the WHO survey teams had never found fault with the quality of the vaccines produced at the labs, according to the parliamentary report findings. For instance, when the survey team went to BCG Labs in Chennai, they found that its drainage systems did not meet the norms – there were no dedicated effluent and sewage treatment plants. The buildings themselves needed modernisation, and the team suggested that a new facility could be constructed in the lab’s existing vacant area. On its part, the lab itself had sent such a request to the government earlier but had not received a response. 

In all, the team found 55 such deficiencies relating to storage, infrastructure, and documentation. The lab, in an appeal later in 2008, pointed out that it had rectified 45 of the 55 deficiencies. Production area, storage of sterilised matter, interior infrastructure, water systems, and quality assurance all met international compliance standards. For 60 years, the lab had supplied much of the country’s stock of BCG vaccine for preventing a severe form of tuberculosis, tuberculous meningitis, in children. For 2008, it was set to produce 80 million doses of the vaccine – 60 million for the country and another 20 million for export. 

But to be completely compliant, to effect these long-needed changes, the lab needed the support of the ministry – Rs 6 crore, and about a year’s time. The external façade of the building, for instance, was many decades old. But since the lab reported to the ministry, it did not have direct authority to undertake these changes. 

Another shift happened at BCG Labs soon after the suspension. Dr N Elangeswaran, its director and an expert on BCG vaccine production, was moved to a dispensary of the Central Government Health Scheme. Dr Vinod Kumar, an expert in leprosy treatment (and not vaccines, as he clarified numerous times during an interview), replaced him as an interim director. The parliamentary report mentions that Dr Kumar did not have the financial powers to make any significant changes in the lab either. (In August 2009, Dr Usha Singh Soren, a microbiologist from the National Institute of Communicable Diseases in New Delhi, took over as the director of BCG Labs, 19 months after it last had a proper director.) 

If the words of the parliamentary report are to be believed, the PSUs were trying their best to be compliant with norms, but couldn’t unless they were given further assistance from the government. It was the ministry’s responsibility, the report said, to make the institutes compliant with WHO’s GMP norms. The “ministry has failed to play the role of coordinator and facilitator in the matter,” the report said. If the ministry could not ensure that its own institutes were GMP-compliant, the parliamentary committee wondered how it could ensure that private players remained compliant. “The ministry is responsible to a large extent for the prevailing unsatisfactory situation,” the report said. “Three institutes fulfilling the vaccine requirement of the country for so many decades were not given a fair chance.” 

The closure of the PSUs also meant that the country faced an immediate shortage of vaccines. Media reports across the nation showed that children needing immediate doses weren’t getting them. Over 20 states and union territories reported shortage of Tetanus Toxoid vaccine, Bacillus Calmette Gueri (BCG) strain for tuberculous meningitis, diphtheria, pertussis and tetanus combined vaccine (DPT), and oral polio vaccine (OPV) between January and October 2008, according to public interest litigation in the Supreme Court led by S P Shukla, a former member of the Planning Commission. Right to Information queries made by the Centre for Science and the Environment and by K V Babu, a Kerala-based ophthalmologist, indicate that  the country was short on the basic six vaccines by 11.22 crore doses, or about 14.5% of the requirement. At the same time, some of the labs had excess vaccines in their storage, all certified for use. BCG Labs, for instance, has had around 28 million doses of BCG vaccine since January 2008. Vaccines have a shelf life, and these ready vaccines quickly became 28 million doses of expired vaccine.  

After the PSUs’ closure in early-2008, the Pune-based private company Serum Institute of India stepped in to produce the BCG vaccine instead of BCG Labs. SII supplied 60 million doses in 2008, and was set for 100 million doses this year. Serum Institute says it is using a well-established seed strain (the seed strain is used to make multiple future vaccine copies) that has been recognised by WHO and that has been in India over a decade.  

Given the political chatter about vaccine production, the parliamentary committee also investigated the Vaccine Park proposal. It concluded that the proposal was out of place, given the state of the three PSUs. “Vaccine Park coming up at the cost of already existing units cannot be considered justified from any point of view,” it said. But yet another story was brewing around who should produce the vaccines.  


Around the time that BCG Labs' Dr Elangeswaran mooted the idea of a vaccine park, he also communicated with the Directorate General of Health Services (DGHS) in June 2005. Dr Elangeswaran was also the director of the Pasteur Institute at the time, and felt that the institute’s resources could be used to produce measles vaccine if they could get the know-how from SII, which supplied much of the measles vaccines. When contacted by the vaccine production board, SII refused. According to the Madras High Court's publicly available documents on the Indian state's Judgement Information System  (, SII stated that “not only is India self-sufficient, but, because of the untiring efforts and pioneering work done by our company, the world’s demand for measles vaccine has been completely met.” 

DGHS felt that Dr Elangeswaran still had a point. “Measles vaccine is included in the National Immunisation Programme and availability of safe, effective and affordable measles vaccine is essential,” they wrote to him in April 2006. “At present this vaccine is being produced only in one institution in the private sector.” It seemed like the government wanted to maintain a self-sufficient vaccine production source. It directed ( Dr Elangeswaran to find means to produce measles vaccine at Pasteur Institute. 

Dr Elangeswaran contacted Green Signal BioPharma, a Chennai-based company, which in turn procured the seed strain and raw material from WISTAR labs in the United States. 

Green Signal and Pasteur Institute signed an agreement on November 27, 2006: Pasteur was to pay Green Signal Rs 3.25 crore for the seeds and equipment, in eight installments within four months. Pasteur Institute is an autonomous institute and its director had the powers to procure technology for the lab. Dr Elangeswaran authorised Pasteur to transfer Rs 1.2 crore to Green Signal for the initial purchase of the seeds. He mentioned the expenditure in a financial statement to the ministry for the financial year. 

But more than six months after the agreement, and after Dr Elangeswaran sent the expenditure statement, the government suddenly changed its outlook on the issue. It washed its hands of the matter. “Neither the agreement was approved by the Ministry of Health & Family Welfare nor the payment of Rs 1.2 crore was authorised by the ministry,” it wrote to Dr Elangeswaran on June 5, 2008. It asked him to annul the agreement with Green Signal, and recover the Rs 1.2 crore with interest. Dr Elangeswaran complied, and revoked the deal with Green Signal on June 24, 2008.  

In other words, while the ministry gave Dr Elangeswaran the power to find the means to produce measles vaccine at Pasteur, it did not approve of the specific deal. The ministry gave Dr Elangeswaran complete power, till the point it felt like it shouldn’t. The CBI, acting upon information from a source, investigated allegations that Dr Elangeswaran had siphoned off government money to a private firm. But the court thought there was something stranger at the government end. “The alacrity and seriousness usually expected from the governmental authorities are totally absent in this case, suggesting something different about the events that had taken place,” wrote Justice Regupathi in his ruling on April 30, 2009. 

The CBI suggested that there were underlying links between Dr Elangeswaran and Green Signal. But Justice Regupathi was not convinced of any links either. “No valid materials have been collected to substantiate undue gain to the petitioner and wrongful loss to the government,” he wrote in his report. He was also suspicious of SII’s role in the deal. “It must also be taken note of that the only private unit having monopoly in the field declined to supply the raw materials,” he said. Their initial response to the DGHS “must be viewed with all seriousness having regard to the sequence of events.” 

Regupathi then coupled SII’s initial denial with the CBI’s vigour in investigating the case. The CBI did not disclose its source to the court. Regupathi felt that this refusal had meaning and that SII may have had an interest in pushing the investigations. “The actual source might have emerged from the person whose interests were put at peril,” he said.  

Meanwhile, SII’s chief managing director, Dr Cyrus Poonawalla, feels that any move to revitalise the manufacturing at the PSUs is a political move to “sympathise with a few hundred incompetent employees.” Poonawalla says that these PSUs have clearly failed the GMP norms, and are a burden on the country’s resources. The Vaccine Park project too is a waste of money and time, he feels. “The Vaccine Park is one more attempt by the government to waste public funds,” he said.  


Who makes the vaccine is a question with many stakeholders. But the actual users of vaccines – doctors and families – don’t really worry who makes them. Parents taking their child to a local vaccination centre, and doctors administering the vaccines, are not trying to understand where the vaccine comes from. As long as the baby gets the measles shot, for instance, how does it matter?  

And it shouldn't, as long as there is a way to certify the vaccine's quality. Four children died after getting a measles shot in Waghola village near Aurangabad in September 2008. Earlier, in April 2008, four babies died after getting a measles shot in two villages near Chennai in Tamil Nadu. Then in June 2009, a three-month-old girl died in Kinkheda village in Maharashtra after being given a dose of the DPT and BCG vaccines. Seven others fell ill. While no other harmful effects came to light in other areas where the DPT and BCG vaccines were used, health authorities could not diagnose the cause for the Kinkheda mishap. 

The vaccine producers have so far been cleared of any suspicion, and some sources suggested negligence in vaccine storage. The cases, along with the children, died soon after and it is unclear whether the vaccine itself – ironically, a drug administered to prevent death – had a role in their death. 

One reason for that is simply that we don’t have a system to check such issues. “In my knowledge, there is no centralised governing body for the control of quality of vaccines,” said Dr Omesh Bharti, directorate of health services, Himachal Pradesh. 

The government, realising this, has been getting its act together for a couple of years. The health ministry put in papers as far back as 2007 to set up an independent authority to regulate pharmaceutical products in the country. The government is also trying to set up a National Biotechnology Regulatory Authority to regulate biotechnology products including vaccines; its functions may overlap with those of the central drug regulatory authority.  


Even as the government is considering converting the PSUs back into vaccine producing labs, what will happen of HLL Lifecare's Chennai-based Vaccine Park is still a mystery. Having acquired the land and completed the conceptual design, HLL Lifecare, which used to primarily produce contraceptives, went into detailed engineering and construction for the vaccine production unit as of August this year. The rationale for the Vaccine Park, at least as touted by its director in various media briefings, was that it will be cheaper for the end user. The cost of a vaccine has often been used as the criterion for granting the right to produce vaccines to a PSU.  

Numerous media reports have mentioned that getting vaccines like the measles vaccine and BCG for TB from the private sector will increase the cost for the government. Cost is deceptive, though. It used to cost about Rs 13 for a vial (10 doses) of the BCG vaccine from BCG Lab in Chennai. A report in the Times of India Chennai edition in April 2008 [] suggested further that SII’s vaccine costs about Rs 17.50 a vial. But when asked in June this year, SII  reported to us that it costs about Rs 2.50 a vial, including diluent, packaging and freight. “One cannot get a cup of tea at this price today,” said SII's Poonawalla. 

Pricing is a dicey standpoint to argue from. The media reported extensively last year on price fluctuations in the vaccine market. In February 2009, private vaccine manufacturers asked for a hike in the government procurement price. They said it was not viable for them to supply medicines at rates much lower than the global supply rate. What they said had some merit too, especially since they depended on the vaccines for their profitability, something the PSUs were never concerned with. “The government burnt its fingers because many of the private players could not deliver on their promises to supply in the interim and some of them started asking for higher prices after the initial agreement,” said Locost's S Srinivasan. That is precisely the reason why it is important to maintain and produce your own vaccines, says Dr Jacob Puliyel, head of paediatrics at St Stephen’s Hospital in New Delhi. 

He points out that a private manufacturer is under no obligation to maintain supplies. In 1998, for instance, Pfizer (it was called Warner Lambert then) stopped manufacture of Fluogen, an influenza vaccine, partly due to financial losses in an effort to bring it within federal compliance laws. King Pharmaceuticals, who bought the Fluogen plant from Pfizer, also gave up because it was too costly. "Clearly, this pattern greatly contributed to the fall 2004 flu vaccine shortage in the United States," say Alexandra Minna Stern and Howard Markel in an article, ‘The history of vaccines and immunisation: Familiar patterns, new challenges’, in the May/June 2005 edition of the journal Health Affairs.  

Cost comparisons may be vague too. “Cost is in the long run an indicator of efficiency,” said Srinivasan. “But costs are to be compared with risks and benefits.” The true cost of producing a vaccine needs to include the cost of manufacturing and enterprise, and also the intangible cost of outsourcing manufacturing. A government enterprise may only be marginally cheaper than a private one since there is a reduced profit motive.  

The problem, then, may not be the cost since it is an inevitably futile project to try and assess which is cheaper, especially when you include subsidies in the private and public sector. The problem may not be the technology deficiencies either – it is not beyond the government to deliver a GMP-compliant lab. If a government has the capacity to deliver satellites that are used by numerous nations around the world, then it may have the capacity to install GMP-compliant labs (and that is the purpose of the purported Vaccine Park in Chennai) if it wishes to.  

The problem is actually one of policy and ethics. To implement a policy requires clout, as much as clarity. What does the government wish for, and how do we want to secure our nation’s essential health needs? According to some health experts, one good reason for keeping vaccine production within the ramparts of the government is security. “Vaccine PSUs are very important for the country’s health security,” said S Srinivasan. “All efforts should be done to keep them world class and alive.” He, along with health officials who requested anonymity, feels that if vaccines are an essential component of the country’s health plan, and we identify six vaccines that form the core of the Universal Immunisation Programme, then we must treat them as we do components of our defence system or water supply. 

Meanwhile, even as the government pushes ahead with reinstating the PSUs and the Vaccine Park remains in limbo, Poonawalla said SII is committed to providing the government vaccines at reasonable prices. In return, SII wants the government to reciprocate. “We expect the government to appreciate and take our offer seriously by placing orders with us well in time to enable us to plan the manufacture of vaccines,” he said.  

Health experts point out that at a time when vaccine coverage in India is far lower than many other developing countries, we should focus on the basics. “We can wait for the vaccines patents to become free and produce costly vaccines at low price and till then we need to go in for essential vaccine coverage at least to an extent of 80%,” said Dr Omesh Bharti. 

A clear plan for sourcing essential vaccines is as much an indicator of a nation's seriousness to immunise its children. If one of the main goals of medicine is to save lives, then immunisation, over the last two centuries, has spearheaded that mission. In 1796, Edward Jenner, a country doctor in England, performed the world's first vaccination, for smallpox. He then published his research into a manual, based on his own clinical trial of dozens of cases. "Cow-pox protects the human constitution from the infection of smallpox," he wrote. Cow-pox, or vaccin-us in Latin for vacca or cow, led the way for much of today's vaccination. A vaccine, after all, still is our way of injecting the body with a small quantity of a micro-organism so that it learns to destroy it and develop immunity against it in the future.  

Much of Europe was caught in that fervour to vaccinate its population against smallpox in the 1800s. Kings and other leaders pushed for vaccination laws. One hundred thousand people were vaccinated in Europe by 1800, according to Stern and Markel's Health Affairs article. Thomas Jefferson pushed for vaccination in the US. The WHO led a smallpox eradication campaign in the 1960s and 1970s. Little by little, by 1977, almost two centuries after that first smallpox vaccination, the world saw its last naturally occurring case of smallpox, still the only human illness to have been completely eradicated.  

To be fair though, smallpox eradication was possible because of a convergence of various factors – certain unique qualities of the disease itself, the existence of an effective vaccine, and the social and political will to drive the campaign. Vaccines may not be the only solution to preventing the UIP diseases, and none of the UIP diseases may be eradicable either. But if the aim is to prevent needless deaths, such an immunisation programme result may depend on a range of coupled factors: improving hygiene, an efficient protocol for producing and delivering vaccines, safety measures to check their usage. It will depend on a collective conscience and will to prioritise a human life. That goes far beyond just trying to produce an effective vaccine.  

Additional references

Parliament of India, Rajya Sabha, Department-Related Parliamentary Standing Committee On Health And Family Welfare. Thirty-Fourth Report on the Functioning of the three vaccine producing PSUs, namely, the Central Research Institute  (CRI), Kasauli, the Pasteur Institute Of India (PII), Coonoor, and the BCG Vaccine Laboratory (BCGVL), Chennai. Presented To The Rajya Sabha On 18th February, 2009, Laid On The Table Of The Lok Sabha On 18th February, 2009. Available from:

Vibha Varshney. Vaccine shortage to continue: Government denies it; its own data tells a different story. Down To Earth, November 2009. Available from:

Vibha Varshney. Get your own vaccine. Down To Earth, July 2009. Available from:

Infochange News & Features, December 2009