 "coronavirus, Covid-19, vaccine")
With the Centre deciding to raise procurement prices of two Covid-19 vaccines — Covishield and Covaxin — by roughly 40 per cent, vaccine industry insiders say a price around $3-4 per dose is viable, given the large volumes. The Union Ministry of Health has placed orders to procure 660 million doses of Serum Institute of India’s Covishield and Bharat Biotech’s Covaxin for a little over Rs 14,500 crore, according to sources. These doses are expected to be supplied between August and December and according to sources the government will pay Rs 215 per dose for Covishield and Rs 225 per dose for Covaxin (both inclusive of taxes). The manufacturers roughly get Rs 205 per dose for Covishield and Rs 214 per dose for Covaxin.
This is around 36-40 per cent more than the current price of Rs 150 per dose that they were receiving.
“Pricing is always a factor of volume. The price range of Rs 215-225 per dose is not bad, however, a price close to Rs 250 per dose is better,” said one Indian vaccine maker who is also developing Covid-19 vaccines. SII gets around $3 per dose from the COVAX initiative, and now the Indian price is close to that.
Both SII and Bharat Biotech did not wish to comment on the matter. The 660 million doses order roughly translates to 120 million doses a month. India is looking to vaccinate 10 million people a day, and the supplies would fall inadequate unless more orders are placed and more options are available in the market.
In January, the Health Ministry had placed orders for 16.5 million doses– 11 million of Covishield and 5.5 million Covaxin doses — at a price of Rs 200 per dose (without taxes) for Covishield and Rs 295 per dose (without taxes) for Covaxin. However, as Bharat Biotech had given 1.65 mn doses for free, it effectively had brought down the cost of Covaxin to Rs 206 per dose.
Around March, the prices were revised for both the vaccines and the Centre paid Rs 150 per dose. Once procurement by state governments was opened up, Adar Poonawalla, CEO of Serum Institute of India, had said in a television interview that the firm would charge both the Centre and the state governments Rs 400 per dose.
A pandora’s box opened after the Centre negated the statement and said it would continue to procure at Rs 150 per dose. The states, meanwhile, complained about a three-tiered pricing policy.
Both the vaccine makers have indicated that a price of Rs 150 per dose was not viable. Poonawalla had said it had to pay about 50 per cent (of the price) as royalties to the innovator firm AstraZeneca and a price of Rs 150 per dose thus did not allow decent margins. Bharat Biotech, too, said Rs 150 per dose was not sustainable in the long run.
“If we keep supplying at Rs 150 per dose then we will no longer be a ‘healthy’ organization,” a senior Bharat Biotech official had told Business Standard. The company has invested Rs 500 crore from internal accruals for Covaxin — development and setting up manufacturing facilities.
The company pays royalties based on product sales to the Indian Council of Medical Research (ICMR) and the National Institute of Virology for their support — like providing the Sars-CoV-2 strain, help with animal studies, and partial funding of clinical trial sites. Royalties are also to be paid to US firm Virovax for adjuvant.
With the vaccine procurement policy changing from June 21 – the Centre now procuring 75 per cent of available doses and supplies to states for free, and the private sector can buy the remaining 25 per cent — there were expectations of an upward price revision.
In the international markets, both Covishield and Covaxin fetch better prices.
SII sells Covishield, the AstraZeneca-Oxford dose to the global vaccine initiative COVAX for $3 or Rs 223 per dose. For this, it has received $300 million dollar risk-funding from the Bill and Melinda Gates Foundation.
Countries like Mexico, Nepal, and Bangladesh procure Covishield for $4 per dose, while others like South Africa, Brazil, Saudi Arabia, Sri Lanka buy at around $5 per dose.
Bharat Biotech has claimed it fetches anything between $15-20 per dose in the international market for Covaxin.
