Days after Prime Minister Narendra Modi announced that the Centre would buy 75 percent of doses from vaccine makers and distribute them among states for free, a fresh round of price negotiations with pharmaceutical companies is expected, a report suggested.
Following the revision in the COVID-19 vaccination policy for the country, the Centre is likely to engage in renegotiations on the prices of Bharat Biotech’s Covaxin and Serum Institute of India’s (SII) Covishield, The Indian Express has reported quoting people familiar with the matter.
The report said that the revised procurement price per dose, which is currently Rs 150 for both the vaccines, is yet to be decided under the new system and the Centre is finalising the contours of the pricing.
In his address to the nation on June 7, Modi had announced that the Centre would buy 75 percent of doses from vaccine makers, including 25 percent of the state quota. They would then be handed over to the states free of cost. The private sector was allowed to buy from the remaining 25 percent.
The Prime Minister also announced that every citizen above the age of 18 will be vaccinated for free from June 21 at the Centre and state government's vaccination centres.
The announcement came after the Supreme Court called the government’s previous vaccination policy “arbitrary and irrational".
The new vaccination programme is expected to cost Rs 50,000 crore to the Centre. Finance Minister Nirmala Sitharaman in her Budget address in early February had announced that Rs 35,000 crore had been allocated for vaccination and it could be increased if needed.
Until April, the prices of both Covishield and Covaxin were capped at Rs 250 per dose for private hospitals which had to procure vaccines through the government. The prices weren’t revised when the vaccination drive was extended to people between the age group of 18-44.
However, when the Centre decentralised vaccine procurement in April, both SII and Bharat Biotech were allowed to fix their own prices for states and private healthcare facilities. The vaccine manufacturers had initially priced their vaccines at Rs 400 and Rs 600 respectively for states and Rs 600 and Rs 1,200 respectively for private facilities. Following backlash, the prices for states were slashed to Rs 300 per dose of Covishield and Rs 400 per dose of Covaxin.
After Modi’s announcement, the Health Ministry had fixed service charges for hospitals at Rs 150 which means a dose of Covishield costs Rs 780 and Rs 1,410 for a Covaxin shot in private hospitals, based on the current prices of the vaccine manufacturers.
Priced at Rs 1,410 for private sector, Coavaxin is now the third most expensive vaccine in the world, after China’s Sinopharm (Rs 2,080) and Pfizer (Rs 1,423). Sinopharm and Pfizer are not yet available in India. This contradicts the claims of Krishna Ella, Bharat Biotech’s founder and MD, who in August 2020 had said that a dose of Covaxin would cost less than the water bottle.
In a media briefing, Dr VK Paul, Member (Health), NITI Aayog said the Centre had placed an advance order for 44 crore additional doses of vaccines. The comprises of 25 crore doses of Covishield and 19 crore doses of Covaxin and they will be delivered between August and December.
Paul did not mention the price at which Centre will be buying the doses in the latest order. Officials familiar with the matter told The Hindustan Times that there is a possibility that the Rs 150 per dose cost of vaccine may no longer be applicable, and that the Centre may have to pay more.
SII CEO Adar Poonawalla had earlier told CNBC-TV18 that his company was losing money by selling the vaccine for Rs 150 per dose. "We are losing money at the Central government's mandated price of Rs 150 per dose. We have to pay 50 percent of the price to AstraZeneca as royalty," Poonawalla said.
The Health Ministry had said nearly 12 crore doses of COVID-19 vaccines would be available for domestic use in June. Serum Institute, in a letter, had said that it expects to supply 9-10 crore doses of Covishield in June. Bharat Biotech on the other hand, is expected to supply nearly 10 crore doses of Covaxin by September.