You are here: Home » Current Affairs » Coronavirus » News
Business Standard

Covid-19 vaccine Covaxin at Rs 150 not sustainable: Bharat Biotech

Higher price in private market required to offset part of the costs, argues firm

Bharat Biotech | Coronavirus Vaccine | Vaccine

Sohini Das  |  Mumbai 

covaxin, bharat biotech, coronavirus vaccine, covid-19, vaccination
“If we keep supplying (Covaxin) at Rs 150 per dose, then we will no longer be a ‘healthy’ organisation,” a senior executive of Bharat Biotech told Business Standard

Covaxin maker said on Tuesday that the Indian government’s procurement price of Rs 150 a dose for the Covid-19 was “non-competitive” and “not sustainable in the long run”. Hence, it said, a higher price in the private market was required to “offset part of the costs”.

The company’s remarks came amid questions over the differential pricing strategy followed by manufacturers for supplies to the government and private sector.

“If we keep supplying (Covaxin) at Rs 150 per dose, then we will no longer be a ‘healthy’ organisation,” a senior executive of told Business Standard.

The company has invested Rs 500 crore on Covaxin from internal accruals, the executive said. Much of this investment has gone into setting up new plants and re-purposing the existing plants in the past 12-18 months. “We had to also sacrifice some products that we were making at these plants, and that implies a loss of revenues,” he said.

The company will also have to pay royalties based on product sales to the Indian Council of Medical Research (ICMR) and the National Institute of Virology for their support – providing the Sars-CoV-2 strain, helping with animal studies, and partial funding of clinical trial sites. Royalties are to be paid to US firm Virovax, too, for its adjuvant.

He said renegotiations on the pricing had not begun with the government, and that the company was focusing on supplying the doses under the existing contract (Rs 150 a dose). “We are telling the government of India that Rs 150 per dose is not sustainable for us, so please help us out. We are not negotiating or anything.”

So far, less than 10 per cent of its Covaxin production has been supplied to private hospitals. “In such a scenario, the weighted average price of Covaxin for all supplies realised by is less than Rs 250 a dose. Going forward, around 75 per cent of the capacity will be supplied to the central and state governments, with only 25 per cent going to private hospitals,” the maker said.

ALSO READ: Govt panel confirms first death in India after Covid-19 vaccination

While Bharat Biotech did not mention what is a viable price point for Covaxin, the company said it sold inactivated virus vaccines like the rabies vaccine to India and other countries at Rs 350 per dose. Similarly, the inactivated polio vaccine is priced at Rs 250 per dose. Covaxin, too, is an inactivated virus technology-based vaccine.


The Centre has placed advance orders for 250 million Covishield and 190 million Covaxin doses to be supplied between August and December. V K Paul, member-health at the NITI Aayog, said earlier this month that the Centre had released 30 per cent advance payment for these doses to and Bharat Biotech.

It is not clear whether the price for this order has been fixed yet. Senior government officials could not be reached for comment.

Bharat Biotech said the cost of production and pricing was determined by several factors – the cost of goods and raw materials, product failures, at-risk product development outlays, product overages, the entire capital expenditure for setting up sufficient manufacturing facilities, sales and distribution expenses, procurement volumes and commitments, besides other regular business expenditures.

There is an asymmetry in the vaccine pricing policy, the company executive explained. “How companies like us survive is that we have a differential pricing strategy. For example, for some markets, we will supply at a certain price, based on volumes and procurement commitments, while for others, the price could be different based on the same factors,” he said.

For example, the government of India is more likely to give a high-volume order for millions of doses and also do a supply contract and give some payment advances. On the other hand, a private hospital cannot do the same. Therefore, the pricing will be different for the government and the private sector.

ALSO READ: Covid-19 infections in age groups same in second wave as first: Govt

Moreover, the executive added, when supplying to the government, there were no other margins involved. But when supplying to the private sector, trade margins are there.

The company said there were examples of such pricing policies – the Human Papillomavirus vaccine is priced for GAVI supplies at $4.5 a dose (Rs 320), but is also available in the private market at Rs 3,500 a dose. “Rotavirus vaccines are supplied to the government of India at Rs 60 a dose, but are also available in the private market at Rs 1,700 a dose. The prices for Covid-19 vaccines internationally have varied between $10 and $37 a dose, (Rs 730-2,700 a dose),” it said in a statement.

Bharat Biotech has supplied 40 million doses of Covaxin till date. It has not sought indemnity for its Covid-19 vaccine from the Indian government, it said.

Complex to make Covaxin

The company said it was highly complex to manufacture Covaxin since the critical ingredient was based on live viruses, which require sophisticated, multiple-level containment and purification methods. Such high standards of purification automatically lead to significant process losses and low yields.

Covaxin requires 10,000 square meters of area to make around 200 million doses annually. In comparison, the same quantity of live virus vaccines can be manufactured from mere 1,500 sq meters, Bharat Biotech said. “Every batch of manufactured product is subjected to more than 200 quality control tests, prior to its release. It is exactly this complexity that has kept away other companies from developing vaccines, especially whole virion inactivated vaccines,” it added.

'US clinical trials to include children'

Bharat Biotech has already submitted a clinical development plan to the US Food and Drug Administration (USFDA) and is in active discussions with them. The company aims to conduct clinical trials in the US to get full authorisation of Covaxin in the US, which will be a first for any Indian-origin vaccine. A senior company official said the US clinical trials will also include children.

Moreover, Bharat Biotech said it had been engaging with the World Health Organisation (WHO) for the last three months and presenting the data. Once it is ready with a complete analysis of its phase 3 efficacy trials, it will approach the WHO in July. The WHO is listing Covid-19 vaccines for its Emergency Use List (EUL).

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, June 16 2021. 00:53 IST