Serum Institute of India (SII) and Bharat Biotech (BB) are seeking higher prices for Covid-19 vaccines from the Centre amid concerns that the cost of Covishield and Covaxin shots in private hospitals is already high. The Centre’s procurement price has been in the range of Rs 150-200 per jab, for the orders placed with the companies from January onwards.
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 capital-intensive, complex and specialised process, and undertaken with “significant financial risk”, sources privy to the discussions told TOI.
Non-competitive price, won’t be sustainable: BB
In April, SII CEO Adar Poonawalla had said the company is providing the shot at a “subsidised” rate of around Rs 150 to the government, significantly lower than what it charges for exports. He suggested the Centre should increase the prices and had also sought Rs 3,000 crore to ramp up capacity.
The 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 said the 44 crore doses will be available till December, and 30% of advance payment has been released to the firms.
On Tuesday, Bharat Biotech said the weighted average price of Covaxin for all supplies realised by the company is less than Rs 250 per dose. “The supply price of Covaxin to the government at Rs 150 per dose is a noncompetitive price and clearly not sustainable in the long run,” the statement added.
With the recent policy tweak, revenues of the manufacturers will be hit, with the Centre procuring 75% of their output. Earlier, SII received nearly Rs 160 per dose for Covishield while Covaxin was procured at around Rs 210 per dose.