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Vardhan and SII Statements Keep Covishield Price Confusion Alive

Vardhan and SII Statements Keep Covishield Price Confusion Alive

A  supply truck of India’s Serum Institute in Pune, India, May 18, 2020. Photo: Reuters/Euan Rocha

New Delhi: The Union health minister’s assertion that the two locally produced COVID-19 vaccine candidates – Covishield and Covaxin – will continue to be procured at Rs 150 per dose by the Centre, as well as the Serum Institute of India (SII)’s failure to clarify the issue specifically, continues to keep alive the issue of differential pricing for state governments.

Earlier on Saturday, health minister Harsh Vardhan had tweeted that the Central government’s procurement price for the two vaccines “remains at Rs 150 per dose”. “These doses will continue to be provided to the states free of cost,” he emphasised.

A few hours later, SII issued a statement to address criticism over the pricing of Covishield, the vaccine developed by Oxford-AstraZeneca and manufactured by the Indian firm.

The Pune-based company has announced its vaccine would be sold at Rs 600 per dose to private hospitals and Rs 400 per dose to state governments.

In the April 24 statement, SII asserted that controversy over the comparison between global prices of the vaccine and India was not accurate.

It said that the initial price had been “kept low globally as it was based on advance funding given by those countries for at-risk vaccine manufacturing”. “The initial supply price of Covishield for all government immunisation programme, including India, has been the lowest,” it said.

As The Hindu observed, the SII statement did not mention the issue of whether the vaccine would be priced differently for procurement by the Centre and the state governments.

It was also silent on whether the Rs 150 per dose rate would apply to all future sales of the Central government.

In an interview with CNBC-TV18 on April 21, SII chief Adar Poonawalla said that his company would begin selling Covishield to the Central government at Rs 400 too for all new contracts, and no such disparity would be there. The ‘Rs 150 plus GST’ tag was only for the initial contract for prior commitment and contract by the central government for 100 million doses “which was ordered in bulk a long time ago”, he said. “There should be no confusion that after the opening up of the change in policy, the new price to governments is Rs 400 and after that for private hospitals is Rs 600,” Poonawalla said.

However, Vardhan’s tweet on April 24 asserted that the cost of the vaccine “remains” at Rs 150 per dose. The latest SII statement only concentrated on the rate for private hospitals and did not venture into details of future pricing for Central and state governments.

“The April 24 statement, by remaining silent on the health minister’s clarification, has kept the question over “differential pricing” alive,” The Hindu wrote.

In its press release dated April 19, the Centre has also said that it will continue to allocate vaccines to states and Union Territories from its 50% share as well, depending on need, number of cases and speed of vaccine administration. It effectively means that state governments “will be competing with private hospitals and with one another to procure the remaining 50% vaccines”, the national paper analysed.

SII had stated to scale up manufacturing, it needs high capital investment which justifies the higher pricing of Covishield.

The SII statement noted that only a limited portion of SII’s volume would be sold to private hospitals at a higher price. “The current situation is extremely dire, the virus is constantly mutating while the public remains at risk. Identifying the uncertainty, we have to ensure sustainability as we must be able to invest in scaling up and expanding our capacity to fight the pandemic and save lives,” it said.

The Hindu pointed out that based on Poonawalla’s demand for Rs 3,000 crore to meet the cost of ramping up production capacity, the government had already agreed to advance that amount to SII, and Rs 1,500 crore to Bharat Biotech”.

Meanwhile, Bharat Biotech declared on Saturday that it would supply Covaxin directly to state governments at Rs 600 per dose, while the rate for private hospitals was Rs 1200 per dose.

The company said it would develop, manufacture and supply Covaxin to India’s central government at 150 rupees per dose.

Just like SII, Bharat Biotech also said that more than 50% of its vaccine capacities had been reserved for supply to the Central government.

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