Selling Covaxin at overall average price of about Rs 250 only: Bharat Biotech defends high cost of Covaxin

Bharat Biotech International has said that the price of Rs 150 per dose at which it supplies Covaxin to the central government is “non-competitive and unsustainable in the long run.”

In a statement on Tuesday, the biotech firm defended the high cost of Covaxin in comparison to other Covid-19 vaccines, and said that the premium price in private markets (Rs 1200 vs Covishield at Rs 600, pre-GST) “is required to offset part of its costs.”

The government has recently capped the private sector jab at Rs 1,410 for Covaxin and Rs 780 for Covishield, including 5% GST and Rs 150 hospital service charges.

BBI has said that out of the 40 million Covaxin doses it has supplied to date, less than 10% was catered to the private sector, “while most of the remaining quantity was provided to the state and central governments.”

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“In such a scenario, the weighted average price of Covaxin for all supplies realized by Bharat Biotech is less than Rs 250 per dose. Going forward, about 75% of our capacities will be supplied to the governments, with only 25% going to the private hospitals,” the company stated.

The Hyderabad-based company said it has invested over Rs 500 crore “at risk, from its own resources for product development, clinical trials and setting up of manufacturing facilities for Covaxin.”

The private firm said it would pay royalties to the ICMR and National Institute of Virology (NIV), with respect to the provision of the SARS-CoV-2 virus, animal studies, virus characterization, test kits and partial funding for the clinical trial sites. Based on the product sales, royalties are also payable to Virovax towards the licensure of IMDG agonist molecules.

“The urgent need to set up a significant number of manufacturing facilities and to divert existing ones for Covaxin has resulted in reduced production of other vaccines at our facilities, leading to a loss in revenues.”

BBI added that activities towards the development of vaccines against newer variants is underway at its facilities.

Highly complex production, low yields

The Hyderabad-based company has attributed the high costs to the whole-virion inactivated vero cell vaccine Covaxin is, where the critical ingredient is based on live viruses requiring highly sophisticated, multiple level containment and purification methods resulting in significant process losses and low yields of a safe vaccine. The highly contagious nature of the live SARS-CoV-2 virus requires more stringent Biosafety Level-3 (BSL-3) containment facilities for manufacturing Covaxin.

“Every batch of the manufactured product is subjected to more than 200 quality control tests, before its release. It is emblematic that Bharat Biotech has not sought indemnity from the government for any adverse events from Covaxin.”

“Private sector vaccines optional”

Bharat Biotech further said that the vaccine procurement by private hospitals is optional and not mandatory, though it gives a choice to citizens willing to pay for better convenience.

“In our view, the question of product pricing is only of extraneous interest to all concerned, especially when the same vaccine is made available free of cost,” BBI said.

The significantly higher pricing for private sector players is “purely due to fundamental business reasons, ranging from low procurement volumes, high distribution costs and retail margins among few others as explained above.”

Citing such examples, BBI said that the Human Papillomavirus vaccine is priced for GAVI supplies at $ 4.5/dose (Rs 320), but is also available in the private market at about Rs 3500 / dose. “Rotavirus vaccines are supplied to the government of India at about Rs 60 per dose, but are also available in the private market at Rs 1700 per dose.”

“Covid-19 vaccine prices internationally are varied between ~ $10 to ~ $37/dose, (~ Rs 730 - ~ Rs 2700/dose).”