Recently, it was learned from industry insiders in the vaccine industry that the total number of flu vaccine batches issued nationwide in 2024 is about 80 million doses, with an actual vaccination volume of about 50 million doses and a preliminary estimated scrap rate of about 40%. In fact, since 2018, due to policy promotion and public awareness progress, the overall issuance and vaccination volume of influenza vaccines in China has shown an upward trend, but the supply growth rate is significantly faster than the vaccination growth rate. There is a mismatch between supply and demand. According to a report by the Health Times in January 2018, Feng Zijian, former deputy director of the Chinese Center for Disease Control and Prevention, stated at a press conference on the "2018 Influenza Prevention and Control Work" that there are about 26 million doses of influenza vaccines supplied to the national market, with an actual vaccination volume of over 20 million doses. In contrast, the supply of influenza vaccines increased by 207.69% in 2024, and the actual vaccination volume increased by 150%. The mismatch between supply and demand has led to a significant increase in vaccine scrap rates. This means that every year, many flu vaccines that receive batch approval reports are scrapped. According to the Vaccine Delivery Research Innovation Laboratory at Duke Kunshan University, the vaccine scrap rate has reached 20% to 40% in the past three years (2020-2023) to promote multi-dimensional vaccination policies and promote the application of influenza vaccines in China. According to the Securities Times website, at the National People's Congress and the National People's Congress in 2024, An Kang, a deputy to the National People's Congress and chairman of Hualan Biology, also said that at present, the vaccination rate of influenza vaccine in China is maintained at about 3%, far below the world level. It is estimated that only about 60% of the total amount of approved and issued qualified reports will be the actual influenza vaccine vaccinated nationwide every year. According to Feng Zijian, former deputy director of the Chinese Center for Disease Control and Prevention, at the "2018 Influenza Prevention and Control Work Information Conference", the scrap rate of influenza vaccines was about 20% at that time. By 2024, this figure had doubled to about 40%. The emergence of this phenomenon is due to both the deviation in demand forecasting and the lack of coordination in supply, procurement, and vaccination implementation. On March 4th, Associate Professor Zhang Can from Duke University's Fuca School of Business told Interface News that unlike conventional vaccines, the demand for influenza vaccines is more uncertain and demand forecasting is more difficult. In addition, due to the diversity of influenza strains and variants, manufacturers need to update their influenza vaccines annually, which increases the difficulty of production management for manufacturers. The influenza vaccine belongs to non immunization program vaccines, and the willingness of the public to receive it fluctuates greatly, influenced by various factors such as the intensity of the influenza epidemic, public health awareness, and policy guidance. But vaccine companies usually need to develop production plans six months in advance. Once market demand does not match forecasts, production is difficult to adjust, which may lead to vaccine oversupply or shortage. Especially, unlike other vaccines with an effective period of 2 to 3 years, influenza vaccines typically have an effective period of only one year, and manufacturers cannot store unused vaccines for use in the next year. The World Health Organization (WHO) recommends vaccine formulations for different strains of influenza virus every year, and manufacturers need to produce based on the latest strain predictions. Therefore, the stored vaccines from the previous year cannot be used, further exacerbating the increase in scrap rates. Mismatching may not only lead to excess scrap, but also result in supply shortages in certain years. For example, in 2018, there was a shortage of influenza vaccines, and some regions in China experienced vaccine shortages. According to a report by Tencent Finance Prism on November 21, 2018, Liu Peicheng, the head of media affairs at vaccine supplier Beijing Kexing, stated that manufacturers usually produce influenza vaccines based on market forecasts - the prediction of a type of vaccine is mainly based on the previous bidding quantity of each province; The second type of vaccine mainly depends on market conditions. Previously, due to the high scrap rate, some companies dared not produce on a large scale and would rather produce less. According to Tencent Finance Prism, as of mid November of that year, only about half of the flu vaccines approved for marketing were available in 2017. According to data from the China National Institute for Food and Drug Control, which is responsible for conducting mandatory inspections of vaccine products, approximately 14 million influenza vaccines have been approved and issued in 2018, compared to approximately 29 million in 2017. The influenza vaccine market is highly unpredictable, and even with data analysis and market analysis, enterprises still need to find the optimal solution between supply and demand balance and market expansion. In addition, several vaccine industry practitioners have told Interface News that the annual demand for influenza vaccines fluctuates greatly, influenced by various factors such as consumer willingness to receive vaccinations, influenza epidemic trends, and vaccine types. The flu vaccine market has cyclical fluctuations of 'big year' and 'small year'. For example, if the flu was high in the previous year and the vaccination rate was high, the willingness to receive vaccinations may decrease and demand may decrease in the next year. After encountering a flu big year, companies often control production in the following year. They also stated that some companies will make more aggressive production plans based on market trends and technological innovation. For example, after the launch of new vaccine technologies such as nasal spray vaccines and self administered vaccines, some companies may have higher expectations for market demand and correspondingly increase production volume. But ultimately, companies will still refer to past sales data, combined with market research and business feedback, to develop production plans (last year's sales situation+growth targets+forecasts). Influenza vaccines have been reported as damaged almost every year, and it is difficult to have a situation where they have not been reported. If there are zero reported losses, it means that the vaccine is not selling enough They added. Organizational management issues during the vaccination process may also lead to vaccine waste. According to the Vaccine Delivery Research Innovation Laboratory at Duke Kunshan University, "Multi dimensional Promotion of Vaccination Policies and Application of Influenza Vaccines in China", the best time to receive influenza vaccines before the epidemic season is from September to December each year. The current influenza vaccination services mainly rely on children's immunization planning and vaccination clinics. Most vaccination sites only offer influenza vaccination for 1 to 2 half days on weekdays, which is not in line with the annual centralized release of vaccination needs. From the perspective of vaccination services, it leads to a shortage of supply and difficulty in booking vaccination services, resulting in poor accessibility and convenience. In addition, there is also room for improvement in the procurement and allocation of influenza vaccines. Due to the lack of a unified national vaccination target and plan, each region may formulate its own procurement quantity based on the previous year's situation and local experience, which may lead to situations where some areas do not have enough vaccines and some areas do not have enough vaccines. According to the Vaccine Delivery Research Innovation Laboratory of Duke Kunshan University's "Insights from Developed Countries' Experience on the Procurement and Distribution of Non Exempted Vaccines in China", currently, influenza vaccines are not included in regional public health projects or public welfare vaccination policies in the vast majority of regions in China. They are still tendered and procured according to the general operation of non immunization vaccines, that is, the provincial disease control units organize the first selection to form a recommended list, and then the district (county) disease control departments organize the second selection and on-demand procurement. Under this model, the recruitment and procurement entities are dispersed, and residents voluntarily self fund vaccination. Due to various factors such as seasonal epidemic trends, residents' health awareness, and self paid vaccine costs, there are significant fluctuations in vaccination demand in each year, which poses challenges to the supply of vaccine manufacturers and the implementation of immunization by disease control departments. Zhang Can stated that there are some practices that can be referred to in response to the uncertainty of demand for influenza vaccines internationally. For example, the Canadian government has adopted a long-term contract strategy to reduce the risk of uncertainty in demand for influenza vaccines. The procurement and distribution of influenza vaccines are jointly coordinated by the health departments of the Canadian federal, provincial, and territorial governments. Every year, these relevant institutions need to estimate the vaccine demand for the next flu season based on past experience, flu season forecasts, and immunization planning projects. In order to reduce the risk of manufacturers, the Canadian government signs long-term contracts with them. For example, since 2001, GlaxoSmithKline (GSK) has been one of the suppliers of influenza vaccines in Canada; In July 2022, the Canadian government renewed its influenza vaccine supply contract with GSK for an initial period of four years, with annual renewals for the following five years. The contract terms include a maximum government procurement of up to 80 million doses of vaccines in the event of a flu pandemic; At the same time, the contract also ensures the procurement of no less than 4 million doses of seasonal influenza vaccines funded by public finance each year. In rare cases where vaccine supply is facing shortages, the Public Health Agency will take the lead in coordinating with local health departments to ensure the rapid resolution of vaccine shortage challenges through measures such as inventory allocation, additional procurement from manufacturers, and centralized procurement coordination with PSPC. At the same time, if two manufacturers win the bid, the Canadian government generally allocates the procurement volume based on the price difference between the two winning manufacturers. As mentioned in the 2019 rabies vaccine procurement contract, if the price difference between two manufacturers is 20% or less, the lowest priced manufacturer can guarantee a purchase quantity of 60% of the total purchase quantity; If the price difference is between 20% and 30%, the lowest priced manufacturer can guarantee 65% of the total quantity; If the price difference is below 30% or 40%, the lowest priced manufacturer can guarantee 70% of the total quantity. The greater the price difference between the two lowest priced bidders, the higher the number of lowest priced bidders awarded. (New Society)