₹150 per Covaxin dose will not be sustainable in long run, says Bharat Biotech
Bharat Biotech has not sought indemnity from the central government against any adverse event caused by its coronavirus vaccine Covaxin, the company said in a statement on Tuesday.
It also defended its differential pricing and said the “non-competitive rate” at which it provides the vaccine to the governments is unsustainable in the long run and the manufacturing cost has to be offset by pricing the vaccine higher in the private market.
A whole virion inactivated vaccine, Covaxin is one of the three Covid-19 vaccines being used in the national Covid-19 immunisation programme.
The company also said that the central government has directed it to keep supplies to the private sector under 10%.“As directed by the government of India, less than 10% of our total production of Covaxin to date has been supplied to private hospitals, while most of the remaining quantity was supplied to state and central governments,” the company said in a statement.
In such a scenario, the weighted average price of Covaxin for all supplies is less than ₹ 250 per dose, the company said, adding that in the future, approximately 75% of the vaccine output will be supplied to the central and state governments while the remaining 25% will be supplied to private hospitals.
The company has claimed that at least 40 million doses of Covaxin have been supplied to date, and newer versions targeting newer variants of the virus are also being developed.
Explaining the new pricing policy, the company said the existing price of ₹150 per dose at which the vaccine is sold to the central government is non-competitive and unsustainable in the long run. So, a higher price in the private markets is required to offset part of the manufacturing cost.
Currently, Covaxin is being sold to state governments at ₹400 per dose and at ₹1,200 per dose to private hospitals and institutions, which is significantly higher. Beginning June 21, doses will only be acquired by the Union government and private hospitals, and the Centre is expected to renegotiate prices.
“This is purely due to fundamental business reasons, ranging from low procurement volumes, high distribution costs and retail margins among few others…,” the company said, urging the government to allow them to maintain differential pricing for the public and private sectors.
The company has so far invested at least ₹ 500 crore at its own risk for product development, clinical trials and to set up manufacturing facilities for the vaccine. The support from the Indian Council of Medical Research (ICMR), its co-developer, was with respect to providing the Sars-CoV-2 virus (which causes Covid-19), animal studies, virus characterisation, test kits and partial funding for clinical trial sites.
In return for this support, Bharat Biotech will pay royalties to ICMR and the National Institute of Virology, based on product sales. According to people familiar with the matter, it is about 5% of the product sales.
HT reached out to the health ministry but didn’t receive a response till the time of press.