No funds granted for vaccine research, development: Govt
The central government has told the Supreme Court that “no governmental aid, assistance or grant” was given for the research or development of Covid-19 vaccines Covishield or Covaxin even though the former is manufactured in the country by the Serum Institute of India (SII) and the latter was indigenously developed by Bharat Biotech in the collaboration with the Indian Council of Medical Research (ICMR).
Interestingly, the Centre also argued against compulsory licensing of key drugs used to treat Covid-19, and also vaccines , suggesting that this could be counter-productive and that the real issue is scarcity of raw materials, not manufacturing capacity. The position is at odds against India’s move, along with South Africa, in the WTO, seeking removal of patent protection for Covid-19 vaccines.
Submitting its affidavit in the top court, the Centre further disclosed that sale of Covaxin will yield 5% royalty payments for ICMR since the intellectual property governing the use of the vaccine was shared.
Both Covishied, developed by Oxford University and British-Swedish firm AstraZeneca, and Covaxin have been so far bought by the Centre for ₹150 a dose. Covishield was first offered to states at ₹400 a dose and ₹600 to private hospitals. Covaxin was offered at ₹600 for state governments and at ₹1,200 for private hospitals. Later Covishield’s price for states was reduced to ₹300 a dose and Covaxin’s to ₹400.
The Centre’s affidavit came up for a hearing before a bench of justices Dhananjaya Y Chandrachud, L Nageswara Rao and S Ravindra Bhat on Monday, but the proceedings, held virtually due to Covid restriction, were deferred to Thursday because of technical glitches.
In its detailed affidavit, the Centre defended its policies regarding pricing and distribution of the vaccines, besides imploring the top court to refrain from interfering with the policy decisions.
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Here are the key points the Union government has made in its affidavit:
No Funding or aid to vaccine manufacturers
The court, in its May 2 order, sought to know from the government whether any fund or grant was provided for research, development and manufacture of the vaccines.
Responding to this, the Centre maintained that the only financial support to Bharat Biotech and SII was in the form of advance payment for vaccines. ₹1,732.5 crore was released to SII for 110 million doses of Covishield, and an advance payment of ₹787.5 Crores was released to Bharat Biotech for 50 million Covaxin doses for the months of May, June and July.
“It is submitted that no governmental aid, assistance or grant is made for research or development of either Covaxin or Covishield. However, they were given some financial assistance for conducting clinical trials,” said the Centre, furnishing details of Memorandum of Understanding (MoU) between ICMR and Bharat Biotech that included a 5% royalty clause for ICMR on net sales and other clauses like prioritisation of in-country supplies.
While ICMR did not fund either Bharat Biotech or Serum Institute of India (SII), it spent ₹35 crore and ₹11 crore respectively at their clinical trial sites, stated the affidavit submitted by the Centre in the Supreme Court late on Sunday night.
It has added that three of the 11 vaccine candidates progressed from proof-of-concept to the clinical development stage and were currently undergoing clinical trials.
Differential pricing between Centre and states justified
Questioning the differential pricing of vaccines between the Centre and the states, the Supreme Court asked the Centre to revisit its vaccine policy, underscoring that the current policy would prima facie result in a detriment to the right to public health. It suggested that the Centre should buy vaccines at ₹150 per dose and then give it to the states, which could take care of the transportation of vials etc.
But, in its affidavit, the Union government justified the differential pricing, contending it was “based on the concept of creating an incentivised demand for the private vaccine manufacturers so as to instil a competitive market resulting in higher production of vaccines and market-driven affordable prices”. It will also attract offshore vaccine manufacturers to enter the country, the affidavit said.
Additionally, the Centre validated higher vaccine prices for the states on the ground that the Union government placed large purchase orders for vaccines as opposed to the states, and therefore, “this reality has some reflection in the prices negotiated”.
According to the Centre, the differential pricing will eventually not have any impact on the citizens since all states have declared that they will be administering vaccine free of cost.
“Thus, while it is ensured that the two vaccine manufacturers, are not unduly enriched from out of public money, the citizens are not supposed to make any payment for getting both dose of the vaccine,” said the Centre.
It maintained that the priority groups for the Centre will remain those above 45 years of age and persons with comorbidities under 45 years of age, and the vaccination for 18-44 age group was allowed “to respect the wishes of various state governments”.
In order to speed-up the regulatory process of use of offshore vaccines within the country, and to accelerate the access to vaccines, the government said in the affidavit that the regulatory and testing processes have been simplified that may shorten the time by four months.
Such foreign vaccines which were administered globally in large numbers after approvals by the US, the UK, the EU and the World Health Organization will go straight for market deployment while bridging trials will be carried out simultaneously. “This would enable earlier introduction of foreign vaccines in the programme and would cut-short the time required for in-country bridging trials by nearly 4 months,” the affidavit said.
Compulsory licensing and suspension of IPR
In its May 2 order, the bench referred to the emergency provisions under the Patents Act to ask if the Centre will invoke the law to suspend the intellectual property rights in respect of essential drugs such as remdesivir, and grant compulsory licenses to some other manufacturers for ramping up their production.
The government, however, said that resorting to such statutory powers either for essential drugs or for vaccines with patent issues would have “serious, severe and unintended adverse consequences” in the country’s efforts being made on global platform.
It added the chief constraint in scaling up production was availability of certain inputs, rather than addition of the manufacturing capacity.
“In view of the current constraints on availability of raw materials and other essential inputs, mere addition of more production capacity may not lead to the desired outcomes of enhanced supplies. stated the affidavit.
The government said that all efforts are being made to enhance the production capacity, apart from procuring remdesivir through imports and donations from other countries through active engagement with global organisations.
“When there is a surge in cases and in demand of patented medicines/drugs/vaccines from all over the world the solution needs to be found out essentially at an executive level engaging at diplomatic levels. Any exercise of statutory powers either under the Patents Act read with TRIPS agreement and Doha declaration or in any other way can only prove to be counterproductive at this stage,” said the government.
Cap on prices of essential drugs
Noting that the maximum retail price of remdesivir had been fixed at ₹3,500, the top court asked the government to consider invoking the statutory powers of Drugs (Prices Control) Order to cap the prices of several other essential drugs such as favipiravir, tociluzumab, enoxaparin, ivermectin, methylprednisolone, paracetamol and hydroxychloroquine.
The government has responded to this by saying that such a step was under their consideration and that exercise of statutory power shall have to be a calibrated executive response keeping several factor national and global factors in mind.
However, for the time being, the affidavit said that the priority was to augment production, ensure effective and equitable distribution and ensure availability of essential drugs under any circumstances.
It referred to the current global scenario, sudden surge of demand for the drugs worldwide, and the availability of raw material for manufacturing important drugs from other countries.
Not a case for judicial interference
The Centre urged the apex court to trust the wisdom of the executive, and let it exercise discretion to formulate policy in larger interest, for there were several factors in managing the pandemic that did not have any judicially manageable standards.
Asserting that its vaccination policy was “just, equitable, non-discriminatory and based upon an intelligible differentia”, it said the policy required no interference by the court because all decisions had been taken on expert medical and scientific advice and following detailed deliberations at the highest level of the Executive.
“In the context of a global pandemic, where the response and strategy of the nation is completely driven by expert medical and scientific opinion, there is even little room for judicial interference. Any overzealous, though well-meaning judicial intervention may lead to unforeseen and unintended consequences, in absence of any expert advice or administrative experience, leaving the doctors, scientists, experts and executive very little room to find innovative solutions on the go,” said the government.