After states' objection, Centre asks vaccine manufacturers to lower prices

After states objected to differential pricing for Covid-19 vaccines for the Central and state governments, the Centre on Monday asked the two indigenous vaccine makers — Serum Institute of India (SII) and Bharat Biotech — to lower their prices, according to sources.

Neither of them responded immediately.

SII and Bharat Biotech had announced prices for state government procurement and for institutional sale to private hospitals after the universal vaccination plan for all above 18 years was announced.

SII had priced Covishield at Rs 400 per dose for state governments and Rs 600 per dose for private hospitals, while Bharat Biotech had pric­ed its Covaxin at Rs 600 per dose for state governments and Rs 1,200 per dose for private hospitals. The Centre has maintained it will continue to procure vaccines at Rs 150 per dose.

This three-tiered pricing has stirred up a debate with several states including Delhi Chief Minister Arvind Kejriwal criticising the pricing strategy as “not the time for profiteering”.

Adar Poonawalla, chief executive officer of SII, had indicated last week that the Covishield price would be Rs 400 per dose for both the Central and the state governments. Poonawalla had claimed that Rs 150 per dose for the Central government was for prior commitments and contracts. It ceases to exist after SII supplies the 100 million doses under the current order to them, and the firm would charge all governments Rs 400 per dose.

Industry insiders pointed out that both vaccine makers had indicated their pricing strategies to the Centre and had got the nod to go ahead. A vaccine maker who attended the April 20 meeting with the prime minister said pricing strategies were discussed and they showed the details of advance purchase agreements they had with various countries.

Sources said the AstraZeneca vaccine (Covishield as SII sells in India) had been fetching an international price in the range of $3-11 per dose. In India SII was selling it at $2 per dose and has now priced it at $8 per dose for private hospitals.

Bharat Biotech has pointed out it is fetching a pricing of $15-20 per dose in international markets for Covaxin.

“We reasoned that people spend $10 on an RT-PCR test every time they have symptoms of Covid, and this can be multiple times during the year. In comparison, paying $10 per dose for a vaccine is nothing much if we consider that it precludes the expenditure on hospitalisation,” said an industry source.

While announcing the price on Saturday, Bharat Biotech had pointed out Covaxin was an inactivated and highly purified vaccine, making the manufacturing expensive due to very low process yields. “Consider the difference between an oral polio vaccine (OPV) and injectable polio vaccine (IPV) manufacturing processes. While IPV uses an inactivated poliovirus, OPV involves a weakened poliovirus,” said an industry source.

In January, the government had agreed to a price of Rs 295 per dose for Covaxin while it was procuring Covishield for Rs 200 per dose. This was brought down to Rs 150 per dose for both vaccines.