What can possibly justify the price of indigenously developed Covaxin at Rs 1460 ?

Government’s vaccination policy was ‘arbitrary and irrational’ observed the Supreme Court of India; and despite the painstaking effort by the Prime Minister to make the policy look less arbitrary, guidelines issued this week appear as irrational as ever. Notwithstanding the demand for universal, free vaccination and the controversy around allowing differential pricing, prices of the vaccines appear problematic. The indigenously produced vaccine by Bharat Biotech will be the most expensive vaccine to be sold by private hospitals despite reports that Covaxin is less effective than others and the fact that it is yet to receive international approval. There is considerable uncertainty whether Indians who took Covaxin will be allowed to travel to other countries in the absence of such certification.

Even when such approval is received, it is not clear if such approval would be valid retrospectively. It is again public knowledge that Brazil had raised doubts about the process followed by Bharat Biotech while manufacturing the vaccine. The BRICS member state had cancelled its order for the vaccine then. Results for the stage three trial for Covaxin are yet to be made public though the company claims to have submitted ‘90 percent’ of the details to the regulators. What then justifies its high price? Didn’t the founder and Managing Director of Bharat Biotech claim in August last year that the vaccine would cost one-fifth of the price of a water bottle? It is also not a secret that the company did supply Covaxin to the central government at the rate of Rs 150 per dose.

This till April was made available in private hospitals at Rs 250—the same price at which the other approved vaccine Covishield was given. Since then, Bharat Biotech has received funds from the Government to increase its production capacity; and while the per unit cost goes down as production goes up, defying all laws of economics, the vaccine is now being offered at a price of Rs 1,460 per dose from June 21. Covishield on the other hand is being offered at Rs 760 per dose and even Sputnik, which will be produced in the country under licence, is priced lower than Covaxin at Rs 1140. It is again not clear if the Government itself has agreed to pay a higher price than what it was paying earlier for Covaxin, and if so, why. Surely the Government owes some explanation to the people of India?

The Prime Minister’s laboured address to the nation this week fails to address all the concerns raised by the Supreme Court of India. The Government informed the court that it would fully vaccinate 100 crore Indians by December, 2021, which would require 80 lakh doses to be administered every day or 24 crore doses a month to meet the target. But the Union of India’s affidavit to the Supreme Court claims that domestic vaccine production capacity, including the Sputnik, would go up to around 12 crore doses a month by July. Manufacturers have repeatedly pointed out that capacity does not mean actual production, which is often less than the capacity to produce. There is thus no clarity yet how the Government proposes to bridge the huge shortfall. Nor is there any clarity about the existing cold chain and the cold storage capacity available with the Union Government and the states, whether such facilities have increased during the past one year and whether such facilities are being imported. Will the PM please deliver another address to clear the doubts?