Unhappy with price cap in private hospitals, Covid-19 vaccine makers 'could be subsidised'

NEW DELHI: After COVID-19 vaccine makers showed displeasure at the capping of vaccine cost at Rs 250 in private hospitals, The New Indian Express has learnt that the government is likely to give subsidies for the same. The amount and details of the subsidy, however, are yet to be worked out.

This comes at a time when the country is getting ready for a widened COVID-19 immunisation drive from Monday.

As per the agreed terms finalised on Saturday, the immunisation drives covers people above the age of 60 and those above 45 with comorbidities from March 1.

​While Rs 150 will go to the vaccine companies, hospitals will get Rs 100 for every jab administered. At government health facilities, the coronavirus vaccine will be given to beneficiaries free of cost.

Sources in the Serum Institute of India (SII) and the Bharat Biotech said they had "agreed to the terms but are not happy with it."

"The government is procuring the vaccines first and for every shot administered, hospitals have to pay Rs 150 to the National Health Authority upfront," said a source in one of the vaccine manufactuing companies.

He added that the government had fixed a "difficult price" despite the risk that the market "may not respond to a very cheap and inexpensive vaccine as it could be needlessly viewed as inferior."

"Also this low price has been imposed without any competition here, for example, there are not many Covid-19 vaccines to choose from," he rued but added that the companies have been assured that they will be subsidised but how is not clear yet.

The government had earlier procured Covishield from the SII at the cost of Rs 200 per dose and Covaxin from Bharat Biotech at the cost of Rs 295 per dose for the first phase of vaccination drive which covered only healthcare and frontline workers. 

Meanwhile, a senior official in the ministry said that the price gap that the companies are facing now could be made up from the fund of Rs 35,000 crore that the Centre has allocated for Covid-19 vaccine this year.

Neither SII nor Bharat Biotech made any comments publicly on the vaccine pricing but they got a shot in the arm with Kiran Mazumdar-Shaw, executive chairperson, Biocon who strongly criticised the price cap fixed by the Union government on Sunday.

Vaccine companies feel betrayed by the low-price cap which is "too low to sustain," she said.

"Covid vaccine jab capped at Rs 250 at Private Hospitals: Government - understand vaccine cos (companies) feel betrayed as price is too low to sustain,” she wrote on Twitter. Shaw further referred to the World Health Organization's price cap of $ 3 per dose. 

"If WHO has agreed to $3 per dose, why beat them down to $2? We're crushing instead of incentivising the vaccine industry," she further wrote.