A health worker opens a freezer during a Covid-19 vaccine simulation in Delhi, January 2.
Photographer: T. Narayan / Bloomberg
Photographer: T. Narayan / Bloomberg
While large countries like the United States and China rush to vaccinate their populations with rapidly approved injections, tens of millions of doses prepared for India are stored, despite having been authorized for use.
While distribution in other nations began shortly after approval with price agreements signed ahead of time, New Delhi and Serum Institute of India Ltd. – the world’s largest manufacturer of vaccines by volume and Local partner of AstraZeneca Plc – has been involved in bargain months behind closed doors and has not yet signed a formal supply agreement. That left at least 70 million doses of vaccines in limbo, despite the urgent need in a country facing the second largest outbreak in the world.
Photographer: Dhiraj Singh / Bloomberg
On Sunday, Serum’s billionaire CEO, Adar Poonawalla, said the Indian authorities had agreed “orally” to buy 100 million doses at a “special price” of 200 rupees ($ 2.74) a dose, below the Price from $ 4 to $ 5 given to the UK government. The company then wants to sell private vaccines to individuals and companies at an additional cost of 1,000 rupees within two to three months.
The Indian government may be trying to pressure Serum to cut its prices, as seen by its controversial decision to give the green light to a rival vaccine developed by a local company that is still recruiting volunteers for the final stage tests, according to Abhishek Sharma , analyst at Jefferies.
The stalemate has cost precious time in a country where infections have surpassed the 10 million mark and reflects the tension between public interest and private profit for pharmaceutical companies that want to recover their pandemic investments quickly.
While developed and wealthier economies have avoided price disputes in their launches so far, the question of how much vaccines should cost in the midst of a pandemic that is killing more than 10,000 people a day worldwide is likely to become bigger as distribution extends to the developing world.
For Prime Minister Narendra Modi, every penny spent on the price of a vaccine in a country where more than 1.3 billion people live will have serious financial consequences for his government.
“When you are buying in bulk, there is obviously the advantage of being able to negotiate the price,” said Randeep Guleria, a member of Modi’s task force for Covid-19 administration and director of the Indian Institute of Medical Sciences, in an interview on Monday. He added that negotiations are underway within the framework of purchasing policy and “obviously, they may also be able to decide what the market price should be later on.”
Guleria said the purchase contract would be signed “at any time”. India is ready to launch Covid-19 vaccines within 10 days of its approval by the drug regulator, Health Secretary Rajesh Bhushan told reporters at a news conference on Tuesday. He did not say whether a price or offer was signed.
It took five to six days for the first jabs to be deployed in the UK, after he granted emergency waves to the Pfizer Inc. and Astra-Oxford vaccines.
‘Bad business’
In October, people with knowledge of the subject told Bloomberg that New Delhi has reserved about 500 billion rupees for vaccination efforts, estimating a total cost of about $ 6 to $ 7 per person. A spokesman for India’s health ministry was not immediately available for comment.
“The government does not transfer money to the private sector so easily,” said Ramana Laxminarayan, founder of the Center for Disease Dynamics, Economics & Policy, in the capital of India. “They are only good at the game because they have budgetary pressures – bureaucrats, they turn around with a bad deal, the minister sends them back and says ‘get a better price’.”
India’s vaccination plan states that 300 million people will be vaccinated in the first stage of implantation, starting with health professionals, followed by police and soldiers, and then those with comorbidities and people over 50. Guleria said this process would take three to four months to complete.
Workers transport a temperature-cooled container at Indira Gandhi International Airport in New Delhi, December 22, 2020.
Photographer: Anindito Mukherjee / Bloomberg
Local authorities across the country have been asked to compile priority vaccination lists, but preparatory work appears uneven, according to interviews with doctors and local representatives. Some locations also appear to be preparing to administer two different vaccines at the same time.
Although the injection of AstraZeneca has been tested in global tests and has received an emergency license from regulators in the UK and India in recent days, the vaccine developer based in Hyderabad Bharat Biotech International Ltd. has not yet begun to analyze Phase 3 test data, but it has also controversially received limited use approval by the South Asian nation over the weekend.
“There are several vaccines that will be used,” said Amit Thadani, a surgeon at Nirmaya hospital in Mumbai. “They are going to allocate a specific type of vaccine to be used only in one district, so if there is a problem, it is easy to identify which specific vaccine is causing it.”
Serum, which has an agreement with AstraZeneca to produce at least one billion doses, has already reduced an initial production target of 100 million by December due to slower than expected approvals.
Poonawalla began to publicly disclose debates about potential vaccine prices in September, which some health experts saw as part of a lobbying effort.
In Sunday’s interview, Poonawalla was optimistic that a written agreement would be reached in a few days. “We have already packed it, we just need to send it by truck across the states and deliver it,” he said, referring to the 70 million doses the company has for distribution.
‘Rush approval’
Meanwhile, India’s decision to grant Covaxin’s restricted approval to Bharat Biotech, despite the lack of final data on the test’s effectiveness, has baffled observers. In August, the company’s president, Krishna Ella, said at a conference that his vaccine would be cheaper than bottled water – at a cost of less than half of what Serum is offering for the AstraZeneca vaccine.
“Covaxin’s hasty approval, even as a stand-in candidate, is mainly driven by commercial considerations from the Indian government,” Sharma, a health analyst at Jefferies in Mumbai, said in a report on Sunday. If Covaxin “is able to demonstrate efficacy in the coming months, subsequent vaccines will have to compete on price and effectiveness”.
Bharat Biotech’s rapid approval may also be due to the fact that India does not want to be indebted to just one vaccine manufacturer.
In an echo of a longstanding debate about the role of private pharmaceutical companies, concerns are already growing that Serum’s position as the sole domestic supplier of a potentially life-saving vaccine is very powerful.
Outside India, AstraZeneca provides only governments and has not yet closed private agreements with companies or individuals. However, Serum wants to have access to the higher margin private market in a few months, where it plans to increase the price of the injection fivefold, according to the price plans shared by Poonawalla.
First engine
The proposed price of 1,000 rupees per dose is “absolutely risky in pricing and leveraging your position as a pioneer,” said Malini Aisola, New Delhi-based co-convener for the All India Drug Action Network, a health watchman. “Personally, I don’t think they should provide approval for private use at the moment.”
But for those who are better off in India’s stratified society, waiting for the Byzantine public health system to distribute doses is not an option.
A large private bank is awaiting guidance on government reference dates and prices that would allow it to consider purchasing vaccines directly from manufacturers, according to creditor officials, who asked not to be identified because the deliberations are private.
For now, Serum is still awaiting its first government request. Poonawalla said that India must first ensure sufficient vaccines for those most in need. “If we had to sell it the way we wanted to, it would make logical sense that some of the most vulnerable people could stay out,” he said.
New Delhi also knows that the vaccine manufacturer will not be able to easily transfer these huge volumes elsewhere.
“India buys a lot of vaccines from the Serum Institute every year and they know how to play that game,” said Laxminarayan. “India can wait a little longer, but for Serum it will not be so easy for them – the government has the means to rely on it.”
– With the help of Ragini Saxena and Suvashree Ghosh