When Shingles Vaccines Go 'Buy One, Get One Free': Market Turmoil and Commercial Realities in China

Nowadays, the shingles vaccine has become well-known to the public. Over the past few years, this vaccine has emerged as a "dark horse" in China's vaccine sector due to its strong market performance.

However, due to factors such as consumer willingness, the vaccination rates for various vaccines are not optimistic, and the shingles vaccine is no exception. As a result, with only two vaccines available in the market, competition in the shingles vaccine market has quickly intensified. Since the middle of this year, GSK's shingles vaccine, Shingrix, has taken the lead in launching a "buy one get one free" promotional campaign, which has flooded the market.

The so-called "buy one get one free" means that the full price of the vaccine and inoculation fee must be paid for the first dose, while for the second dose, only a few dozen yuan service fee is required. For Shingrix, originally priced at 1630 yuan per dose, this is undoubtedly a direct signal of a price war.

To understand, Shingrix is nearly "invincible" in overseas markets, holding an absolute competitive advantage. However, it has now actively initiated a price war in the Chinese market.

This phenomenon also confirms the saying "One kind of water and soil nurtures one kind of people" —— the business environment, consumer demands, and competitive landscape in different markets have essential differences; mature overseas business models cannot be directly transplanted and applied.

Of course, a more direct reason might be that Chongqing Zhifei Biological Products Co., Ltd., the operator of Shingrix in China, urgently needs to use promotional methods to open up the market.

/ 01 / Unexpected Price War Contender

Since May, Shingrix has launched a "buy one get one free" promotional campaign in multiple regions across China, signaling the start of a price war.

From the vaccination process, Shingrix requires two doses in total. Based on the original pricing, the total cost for both doses is 3,260 yuan (including vaccination service fees), but after the discount, it is only 1,652 yuan (including service fees for both doses), which is equivalent to a 50% discount.

For the market, it is indeed surprising that Shingrix would proactively initiate a price war. After all, in terms of efficacy in the Chinese market, it is an "invincible" presence.

According to data released by GSK, in the pivotal Phase III clinical trial, Shingrix reduced the risk of shingles infection by 97.2% in people aged 50 and above compared to placebo. This figure is essentially regarded as the ceiling of protective efficacy in the vaccine industry.

More notably, its protection is extremely long-lasting, and people over 50 years old can basically achieve lifelong immune protection after vaccination. On April 17 last year, the long-term protection rate data published by GSK showed that 11 years after people aged 50 and above were vaccinated with Shingrix, the protection rate remained as high as 82%; the cumulative protection rate for those aged 70 and above from the 6th to the 11th year after vaccination also reached 73.1%.

This basically indicates that people over 50 years old can be "lifelong" protected by receiving two doses of Shingrix in a single immunization.

Such a vaccine with excellent efficacy and durability has proactively initiated a price war, surpassing market expectations.

Following Shingrix, the Chinese-produced vaccine Ganwei, with a lower price (approximately 1400 RMB for the full course), quickly followed suit. At the investor exchange meeting held on May 27, Baike Biotech also stated that the price had not been adjusted, and in early June, 50% discount promotions were gradually launched in regions such as Shaanxi.

At the exchange meeting held in early November, Baike Biotech indicated that the discount price is 30%-80% of the normal selling price. If calculated at a 30% discount, the selling price has dropped to around 400 yuan.

This price war is destined to continue.

/ 02 / Completely Different Performance

For potential herpes zoster patients, the vaccine is a "basic necessity," and its sales volume should not be a concern — a fact that has been fully validated in overseas markets.

In May 2006, Zostavax, the world's first shingles vaccine and a live attenuated vaccine developed by Merck, was approved for marketing, bringing hope to patients with shingles. The vaccine’s sales peaked at $765 million in 2014.

The success of Zostavax was only a small feat. In 2017, the formal launch of GSK's Shingrix truly opened up the "vast ocean" of the shingles vaccine market.

In 2024, Shingrix achieved global sales of 3.364 billion pounds (approximately 4.298 billion US dollars), ranking fourth in global vaccine sales and being the undisputed "leader" in the shingles vaccine field.

However, the performance of this globally popular vaccine in China has failed to meet expectations.

Due to factors such as pricing, GSK's sales performance in China has not been optimistic. Previously, in the face of competition from local companies like Baik Biotech, GSK chose to "retreat" and handed over the China market rights for this vaccine to Chongqing Zhifei Biological Products Co., Ltd.—after all, Zhifei Biological Products was the mastermind behind the sales success of Merck's HPV vaccine.

According to the cooperation agreement between the two parties, Chongqing Zhifei Biological Products Co., Ltd.'s minimum procurement amount for 2024 is 3.44 billion yuan, which is almost equal to the total sales of Shingrix in China over the past four years.

This also indirectly reflects the vaccine's previous unsatisfactory performance in the Chinese market. However, even now, with Chongqing Zhifei Biological Products Co., Ltd. taking over its operation, it still needs to rely on a "buy one get one free" promotional strategy to gain traction, which sufficiently demonstrates the difficulty of expanding in the Chinese market.

Not only are the imported vaccines with higher selling prices struggling, but the market performance of domestically produced vaccines is also hard to summarize. According to the third-quarter report of Baike Biotechnology, from January to September, the confirmed sales volume of the shingles vaccine was -65,400 doses, corresponding to sales revenue of -143 million yuan. The core reason is the decline in sales volume and returns exceeding purchases.

Since the beginning of this year, Baike Biotech has had returns that offset revenue by 2.25 billion yuan due to vaccines with already recognized income failing to be sold before their expiration dates. Additionally, based on current vaccination and inventory situations, the company has estimated a further reduction in revenue from returns amounting to 97.4648 million yuan.

This is still against the backdrop of current price-cut promotions. In short, the herpes zoster vaccine market has fallen far short of expectations.

/ 03 / Lessons from Optimism to Caution

The trend in the shingles vaccine market has presented a stark contrast to the market.

Previously, the market generally predicted that it would become "the HPV vaccine for middle-aged and elderly people." On one hand, the neuralgia caused by shingles is known as "the cancer that doesn’t kill," and patients’ fear of pain and demand for prevention are extremely urgent;

On the other hand, the scale of the potential target population is extremely large. According to the data from the seventh national census in China, there are about 264 million people aged 60 and above in China. If the age limit is relaxed to 40, the coverage will further expand to hundreds of millions. A research report by Minsheng Securities also pointed out that in 2021, the vaccination rate for the shingles vaccine among people aged 50 and above in China was only 0.1%, which is at a very low level; In the future, with the deepening of population aging, the annual increase in the incidence of shingles, and the awakening of public health awareness, the market size is expected to experience explosive growth.

But the reality is that the growth curve of the shingles vaccine market is obviously difficult to replicate the explosive glory once achieved by the HPV vaccine.

The market's attitude towards it has shifted from optimistic expectations to cautious observation. The core issue lies in three key constraints.

First, there is a mismatch between payment ability and demand conversion. Although the demand for prevention is real, the previous pricing of the shingles vaccine at 1,630 yuan per dose and over 3,200 yuan for two doses far exceeds the consumption budget of ordinary middle-aged and elderly people in China. Currently, this vaccine has not been fully included in the national medical insurance catalog. Only certain regions cover it through local supplements or inclusive insurance programs, with out-of-pocket payment remaining the mainstream. For non-essential preventive vaccines, price sensitivity directly impacts willingness to get vaccinated. Even with a large population base, the low payment conversion rate still leads to difficulty in rapid market expansion.

Secondly, the diversion and squeeze of the local competitive landscape. Unlike the overseas market where Shingrix dominates alone, the domestic market in China has formed a dual-line competitive landscape of "recombinant protein + live attenuated vaccine." While Shingrix has an advantage in terms of protective efficacy and durability, it faces competition on both price and convenience of vaccination, making it difficult to form an absolute monopoly, naturally hindering market expansion.

Finally, the insufficient vaccination scenarios and awareness popularization have also increased the difficulty of market expansion. The explosive growth of the HPV vaccine relies on the active pursuit and social spread among the young population, while the target group for the shingles vaccine is mainly middle-aged and elderly people. This group has relatively limited channels for obtaining health information, and their awareness and acceptance of vaccines still require long-term cultivation. Additionally, the promotion efforts at grassroots vaccination sites and doctors' willingness to recommend the vaccine also affect the efficiency of vaccine outreach.

This is also why the sales of domestically produced vaccines, which are priced lower, have plummeted this year.

It is precisely due to the叠加 of multiple factors that, although the shingles vaccine market has long-term growth potential, it remains difficult to摆脱 the dilemma of "being well-received but not selling well" in the short term. Its growth pace is much slower than previous market expectations.

This also fully reflects consumptionHealthcareThe Cruelty of the World — It has never been just about "healthcare" but is deeply imprinted with the attribute of "consumption." Technological advantages can determine the "lower limit" of a product, but its consumption attributes define the "upper limit" of the market. For vaccine companies, it’s not enough to simply excel in healthcare; they must also understand consumer psychology and adapt to the market ecosystem.

       Original Title: When the Shingles Vaccine Starts "Buy One Get One Free"