Covid-19 vaccine: Supplying Covaxin at Rs 150/dose to Centre ‘not sustainable’ in long run, says Bharat Biotech

Hyderabad-based Bharat Biotech International, the manufacturer of Covid-19 vaccine Covaxin, has justified higher pricing of its vaccine when compared to others available for the private sector in India. In a statement issued on Tuesday, the company also said, “the supply price of Covaxin to the government of India at Rs 150 / dose, is a non-competitive price and clearly not sustainable in the long run.” It said that a higher price in private markets is required to offset part of the costs.

It must be noted that a single dose of this made-in-India vaccine can cost around Rs 1,410 (including GST and hospital’s administering charges) at a private facility. On the other hand, Covishield is available at Rs 780 per dose and Russia’s Sputnik V will cost you Rs 1,145 in India.

Bharat Biotech explained that pricing of the vaccine depends on various factors like cost of goods & 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.

It also explained that Covaxin is a whole-virion Inactivated Vero Cell vaccine and involves a highly complex manufacturing process. “The process is highly complex since the critical ingredient is based on live viruses which require highly sophisticated, multiple level containment and purification methods. Such high standards of purification automatically lead to significant process losses and low yields save the outcome of a highly purified and safe vaccine,” the statement reads.

Talking about the higher pricing of Covaxin for private sector players, the company said this is purely due to fundamental business reasons.

“As directed by the Govt of India, less than 10 per cent of our total production of the vaccine to date has been supplied to private hospitals, while most of the remaining quantity was supplied to State and Central Governments. In such a scenario the weighted average price for all supplies realized by Bharat Biotech is less than Rs 250 per dose,” the company said.

Bharat Biotech said it has so far invested over Rs 500 crores at risk from its own resources for product development, clinical trials and setting up of manufacturing facilities. The company stressed that the low-price realization for home-grown innovators constraints innovation and product development in India.

Experts have however always maintained that any analysis of pricing has to also take into account the volumes sold to govt, global entities and private also are normally very high justifying lower pricing. Similarly, the technology development costs and clinical trials costs are much lower in India than abroad adding to lowering of prices. Finally, the vial presentation of 20 dose vials for instance adds to the economies, hence the argument in favour of lower pricing.