Amid concerns over the high cost of Covishield and Covaxin shots in private hospitals, the vaccine manufacturers -- Serum Institute of India (SII) and Bharat Biotech (BB) -- are seeking higher prices for COVID-19 vaccines from the Centre.
Both companies recently sought a price increase, arguing that the current government-procurement price is “unsustainable”, especially in line with the substantial investments that have gone towards producing vaccines.
They have argued that vaccine manufacturing is a capital-intensive, complex and specialised process, and undertaken with “significant financial risk”, sources told a leading news portal.
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On Tuesday, June 15, Bharat Biotech said the weighted average price of Covaxin for all supplies realised by the company is less than INR 250 per dose. The supply price of Covaxin to the government at INR 150 per dose is a non-competitive price and clearly not sustainable in the long run, the statement added.
With the policy tweak recently, revenues of the manufacturers will be impacted, with the Centre procuring 75 per cent of their output. Earlier, their realisations would have been higher on account of the states paying two to three times the central-government procured price.
The Union health ministry announced on June 8 that it had placed an order with SII for 25 crore doses of Covishield, and with Bharat Biotech for 19 crore doses of Covaxin. It is said that the 44 crore vaccine doses will be available till December, and 30 per cent of the advance payment has been released to both companies. The pricing per unit of the latest order has not been made available.
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In April, SII CEO Adar Poonawalla had said that the company is providing the shot at a “subsidised” rate of around INR 150 to the government, significantly lower than what it charges for exports. He suggested the Centre should increase the prices as the company needed to invest in capacity addition, and had also sought INR 3,000 crore to ramp up capacity.
Earlier, SII received nearly INR 160 per dose for Covishield while Bharat Biotech’s Covaxin was procured at around INR 210 per dose. While in the first order in January, the government procured 110 lakh doses of Covishield at INR 200 per dose (excluding taxes) while 55 lakh doses of Covaxin worked out to INR 206 per dose.
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