(Yicai Global) Nov. 23 -- An influenza and human papillomavirus vaccine shortage has been reported throughout China due to increased seasonal demand and a drop in production, making a short-term boom in the sector likely.

As this year's release of influenza vaccines draws to an end just 14.5 million doses had been issued as of Nov. 12, which is half of last year's amount and nearly a 10-year low.

This is mainly because Changchun, Jilin province-headquartered Changsheng Bio-Technology, Beijing-based Sinovac Biotech, France's Sanofi and other major producers have stopped or slashed production. 

The inspections of vaccine makers that started in August also affected output following the scandal at Changsheng, the Securities Times reported, citing Li Zhixin, an analyst with Lianxun Securities.

A unit of Changsheng Bio-Technology suffered penalties of CNY9.1 billion (USD1.32 billion) after it falsified rabies vaccine data.

Hong Kong Bound

The first batch of influenza vaccines that arrived mid-month have already been snapped up and a new batch may arrive later this month. Some people have gone to Hong Kong for inoculation as flu vaccines are out of stock in many places, a health center in Shenzhen told the Securities Times.

Flu shots cost between HKD300 (USD38) and HKD400 in several private hospitals in Hong Kong. Combined with medical fees and other expenses, the procedure costs more than CNY1,000 (USD144). Customers must also make an appointment one month in advance.

Flu jabs are not the only ones in short supply. The HPV vaccine introduced in August is also in great demand. The appointment system breaks down frequently and Shenzhen and Hangzhou residents must join in a lottery to get inoculated.

The National Institutes for Food and Drug Control will not issue lot releases for about 100,000 doses of rabies inoculants produced by Jilin Maifeng Biopharmaceutical and Changchun Zhuoyi Biological, it said on Nov. 21. This may also cause a shortfall of the rabies shot.

Growth Area

Over the past five years, an average 13 million doses were made each year, with a market value of about CNY4 billion (USD577 million). The vaccines mainly come from Liaoning Chengda Biotechnology, Changsheng Bio-Technology, Ningbo Rongan Biological Pharmaceutical and Guangzhou Nuocheng Biological Products. Changsheng Bio-Technology had a 25 percent share, but was forced to bow out of the market after its rabies scandal.

Vaccines are set to become one of the pharmaceutical sector's key near-term growth areas because of strong demand and stable prices. This has been reflected in stock prices.

Chongqing Zhifei Biological Products' share price has jumped 63 percent this year, while Hualan Biological Engineering, also based in Chongqing, has climbed 47 percent. Shanghai Hile Bio-Technology and Shenzhen Kangtai Biological Products have also gained more than 30 percent.

Draft Law

The State Administration for Market Regulation issued a notice on Nov. 11 soliciting opinions on the draft vaccine management law, which integrates the regulations on inoculant development, production, circulation, administration, abnormal reaction monitoring, safeguard measures, supervision and management in various laws, and which outlines a special vaccine management law for the first time.

The new legislation clarifies the strategic and public welfare nature of the vaccine sector, which will improve with an established long-term mechanism, Hong Kong's Southwest Securities believes. The sector will develop toward high-quality firms under strong supervision and lofty standards.

Overall operating costs in the field will improve greatly, especially at the production end, according to China Merchants Securities. 

Compliance with good manufacturing practices and product quality control will reach an unprecedentedly high level. The industry is also expected to be more concentrated, benefiting leading enterprises.

Editor: Ben Armour