Read the Conversation
EF: What is Biovac’s role in the South African market?
MM: We are an African human vaccine company and the only human vaccine manufacturers in South Africa. We occupy a niche space within the pharmaceutical sector, and although it represents only 5% of global pharma sales, we expect continued growth as we have shifted to a preventative approach in healthcare. Initially, Biovac started as a partnership with the South African government to provide southern African with a human vaccine manufacturing entity. Although we are the only more developed biotechnology company, we are proud to be the sole player of its type in South Africa.
EF: What is BIOVAC’s footprint in South Africa and on the continent?
MM: We supply most of the government’s pediatric vaccine needs through our Expanded Program on Immunization (EPI), which is a vaccine program. The program’s aim is to ensure all children born in South Africa have access to free vaccines, and we are responsible for providing them, either by importing or manufacturing them at our site in Cape Town. Initially, we used to import 100% of the vaccines, however, we now have the required infrastructure to manufacture the key vaccines. In comparison to big pharma’s strategy, we utilise a reverse integration strategy. We started with packaging and labeling, and now we are getting into sterile manufacturing of vaccines.
We collaborate with partners because it is better to work with people who have been doing it for decades, but we also have our product development initiative and laboratories at our site in Cape Town.
Our ambition is to not only supply and manufacture but go into product development. We aim to be global players, and the only way to achieve this is through owning and developing our products. Currently, we are limited to the countries surrounding South Africa due to the dynamics of the continent; however, we export throughout the region. Our continent is one of the largest users of vaccines by volume, however, purchasing power is limited. UNICEF purchases vaccines for the least developed countries, and 60% of that volume comes to the African continent, and this is because African countries are donor-dependent to the likes of UNICEF and GAVI. Under the procurement being done through UNICEF ( and not by the governments themselves), companies like BIOVAC do not have direct access to the countries. So we will be able to supply UNICEF for the rest of Africa when BIOVAC owns its product. Until then, we will continue to work with partnerships mainly for South Africa. The demand is huge, but we can’t as yet participate in the global procurement chain.
EF: What is the projected timeline for Biovac to own and sell the product directly?
MM: We aim to achieve this goal by 2025. Product development is a lengthy process, as you have to go through costly animal and clinical trials. Until then, we will be continuing to build capability, striking as many partnerships as we can, and bringing all the know-how into South Africa. It’s about consistently building partnerships, supplying customers, and building capabilities to ultimately become a global vaccine provider.
EF: What were the lessons learned and experiences gained during the public-private partnership with the government?
MM: Public-private partnerships for vaccines are the way to go if we want to build capability on the continent. The nature of the relationship is that the private sector party assumes the risk, raises capital, and does what is required to realise the objectives, whereas the government is the enabler through a long term contract. Unfortunately, if a country does not have 20 or 30-year plans, PPPs won’t work. They don’t work in 3 to 5-year timeframes, so for public-private partnerships to work, 25 to 30 years are needed to build the capability that the government on their own would not be able to build. It must be a long term commitment. Health is always a long-term investment for the government or from a stakeholder’s angle; it can never be short term. The benefits will be reaped 20 -50 years later, so all stakeholders must have the same vision and consistency regardless of political, administrative changes throughout the years.
EF: Do you see the National Health Insurance (NHI) as a challenge or an opportunity and what should be done to make it a feasible model?
MM: The NHI evokes anxiety in the sector due to unexplained details and fear of the unknown. So being skeptical or cynical, one could say that unless the details are laid out and settled upon, it is difficult to know if it will work out. However, from an optimistic viewpoint and particularly from a business perspective, we know we will always adapt to a new norm. I don’t think the NHI is a threat to business because these changes tend to be gradual, so for this reason, we will see the changes as they come, and we will evolve as we go. Nevertheless, children need to be continuously protected, so while the procurement mechanism may change, the need for vaccines and local manufacturing is unchanged. With or without the NHI, our products are needed to protect children, as vaccine-preventable diseases will continue to exist.
To some extent, the government already has an NHI model working in which vaccines are given for free in South Africa to any child born in the country. There are no limitations in the system to access of the vaccines regardless of the clinic used (whether one in the private or public sector). Whether the funding moves from the DoH to an NHI fund, the framework is present. It is about evolution and adapting to that evolution.
EF: How are your existing partnerships providing high quality and affordable healthcare?
MM: Similar to models used in countries such as Argentina, Russia, and Turkey, we partner with companies that have the latest technology and bring this into the country. What sets our model apart is that we have built capabilities from scratch instead of piggybacking on an existing capability. There is the occasional criticism about working with big pharma, but it is a perfect model because the products that we intend to manufacture exists only with big pharma. There is also the latest technology and know-how. These products are brand new and for us to be given the responsibility as a relatively young company in the vaccine space -only 16 years- is something we are very proud of. Dealing with new global products, in an African setting makes us even more unique than our counterparts in other continents. Our values speak to our work in reducing the burden of disease, to creating meaningful employment, bringing in foreign direct investments with the latest technology. We are building something unique in South Africa. Its exponential benefits are multipliable. The model could be replicated to other areas in healthcare to progress forward.
EF: The concept of the triple bottom line (people planet profit) works very well in the pharma industry so what would be your advice for a leader in another economic sector on how to manage the triple bottom line and how to change the mentality of other sectors?
MM: The world is evolving at a tremendous pace, and businesses nowadays operate differently to how businesses worked thirty years. Then, profits were the main goal, but now, it is clear that to achieve the desired profits, that companies have to look at themselves as part of an ecosystem and to embrace the ecosystem for their survival. A mindset change is required to achieve this, but I believe that this change is starting to take place even in other sectors.
EF: What would you like to celebrate with BIOVAC South Africa in your 15 years with the company?
MM: When I joined Biovac, we had less than 50 employees, and we had old buildings and no manufacturing capability. We now have modern infrastructure and over 350 highly skilled employees who live by the company ethos and believe genuinely in the products that we manufacture. We have been successful because the people on the ground absorbed, learned, opened their eyes, made mistakes, acknowledged, came back, and ultimately made good. That is our engine. I see our staff as the engine, not always visible but most definitely there working hard and in synchrony. I am also very proud of the global partnerships we have been able to strike. We have struck partnerships with global pharma companies such as Sanofi and Pfizer, and this has provided the perfect foundation from which we can have more partnerships and also paves the way for Biovac to be a global vaccine player.
EF: What is your final message to the readers?
MM: Our country needs to grow faster than the current pace. There is so much potential for South Africa as a small developing country to become a country like South Korea, and there are just a few things that are stopping us. The policies are there, we need only synchronized consistent execution with a long term horizon.
