Rs 150 per Covaxin dose not sustainable in long run Bharat Biotech

(Adds details)
Hyderabad, Jun 15 (PTI): The supply price of Bharat
Biotech's COVID-19 vaccine Covaxin to the Central government
at Rs 150 per dose is not sustainable in the long run, the
vaccine maker said on Tuesday.
Hence a higher price in private markets is required
to offset part of the costs, it said in a statement.
     The Centre's supplying price is pushing the pricing
structure for the private sector upward, the firm said.
     Fundamental business reasons ranging from low
procurement volumes, high distribution costs and retail
margins, among few others, contribute to higher pricing of
Covaxin to the private sector, Bharat Biotech said,justifying
the higher price when compared to other COVID-19 vaccines
available for the private players.
     Bharat Biotech is currently supplying Covaxin
at Rs 150 per dose to the Centre, Rs 400 to the state
government and Rs 1,200 to private hospitals.
     "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.Hence a higher price
in private markets is required to offset part of the costs,"
it said in a statement.
     As directed by the Centre, less than 10 per cent
of the total production of Covaxin 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
of Covaxin for all supplies realized by Bharat Biotech is
less than Rs 250/dose.Going forward, approximately 75 per
cent of the capacity will be supplied to State and Central
Governments with only 25 per cent going to private
hospitals," Bharat Biotech said.
     The firm has so far invested over Rs 500 crore
at risk from its own resources for product development,
clinical trials and setting up of manufacturing facilities
for Covaxin, it said.
     The pricing of vaccines and other pharmaceutical
products heavily relies on a series of factors such as the
cost of goods and raw materials, product failures, at risk
product development outlays and product overages, besides
other regular business expenditures, the city-based company
said.
     The support from The Indian Council of Medical
Research (ICMR) was with respect to provision of the SARS
CoV2 virus, animal studies, virus characterization, test kits
and partial funding for clinical trial sites.
     In return for this valuable support, Bharat
Biotech will pay royalties to ICMR and the National Institute
of Virology (NIV), based on product sales.
     "Unlike most medicines and therapeutics,
vaccines are provided free of cost by the Government of India
to all eligible Indian citizens.Thus, the procurement of
vaccines by private hospitals is optional and not mandatory,
albeit it gives a choice to citizens who are willing to pay
for better convenience," Bharat Biotech further said.
     It said the firm is supplying other vaccines to
the government at cheaper prices compared to private market
prices.
     Over 40 million doses of Covaxin has been
supplied so far and it is emblematic that Bharat Biotech has
not sought indemnity from the Centre for any adverse events
from Covaxin, it claimed.
     Companies such as Bharat Biotech, which are
innovators with specialized expertise in product development,
and large-scale manufacturing, should be allowed to maintain
a differential pricing strategy for Governments and private
hospitals.
     "It is distressing to see that a large country
like India has a very basic level of innovation in vaccines
and pharmaceutical products," the vaccine maker said.
     In the absence of a dual pricing system, Indian
vaccine and pharmaceutical companies risk being reduced to
mere contract manufacturers with intellectual property
licensed from other nations, Bharat Biotech added.PTI GDK BN
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(This story has not been edited by THE WEEK and is auto-generated from PTI)