Bharat Biotech says higher pricing of Covaxin required in private markets

Bharat Biotech on Tuesday justified the higher pricing of its coronavirus vaccine in the private market, saying the supply price of the shot for Government of India is clearly not sustainable in the long run.

"The supply price of Covaxin to Govt of India at Rs 150 a dose, is a non-competitive price and clearly not sustainable in the long run," the Hyderabad-based vaccine maker has said. 

"Hence a higher price in private market is required to offset part of the costs," it said. Bharat Biotech is currently supplying the vaccine for Centre at Rs 150 a dose.

Fundamental business reasons ranging from low procurement volumes, high distribution costs and retail margins among few others contribute to higher pricing of Covaxin, Bharat Biotech said justifying the higher price when compared to other Covid-19 vaccines available for the private sector in India.

"Unlike most medicines and therapeutics, vaccines are provided free of cost by the Govt of India to all eligible Indian citizens. Thus, the procurement of vaccines by private hospitals is optional and not mandatory, albeit it gives a choice to citizens who are willing to pay for better convenience. In our view, the question of product pricing is only of extraneous interest to all concerned, especially when the same vaccine is made available free of cost."

Bharat Biotech has so far invested over Rs 500 crore at risk from its own resources for product development, clinical trials and setting up of manufacturing facilities for Covaxin, it added.

The government has set the maximum price private hospitals can charge for the Covaxin at Rs 1,410. The Centre has placed advance orders for 190 million Covaxin doses to be supplied between August and December.