A higher price for Covaxin in private markets is required to offset part of the costs, Bharat Biotech said on Tuesday.
In a detailed statement on vaccine-pricing, the Hyderabad-based company said the supply price of Covaxin to the government of India at ₹150 per dose, “is s a non-competitive price and clearly not sustainable in the long run.”
As directed by the Government of India, less than 10% of 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, it said.
“In such a scenario the weighted average price of Covaxin for all supplies realised by Bharat Biotech is less than ₹250 per dose. Going forward, ~75% of the capacity will be supplied to State and Central Governments with only 25% going to private hospitals,” it added.
Bharat Biotech has so far invested over ₹500 crore at risk from its own resources for product development, clinical trials and setting-up of manufacturing facilities for Covaxin.
The prices for Covid vaccines internationally have varied between ~ $10 to ~ $37/dose, (~ ₹730 - ~ ₹2700/ dose), it added.
Pricing of vaccines
"One must remember that the pricing of vaccines and other pharmaceutical products heavily relies on a series of factors— the cost of goods & raw materials, product failures, at risk product development outlays, product overages, the entire capital expenditure for setting up sufficient manufacturing facilities, sales and distribution expenses, procurement volumes and commitments besides other regular business expenditures,” it said.
“The sheer complexity of the Covaxin manufacturing process is manifested by the fact that it requires about 10,000 square meters of area to manufacture around 200 million doses of the vaccine annually. In comparison, the same quantity of live virus vaccines can be manufactured from mere 1,500 square meters,” it added.
Due to the highly contagious nature of the live SARS-CoV-2 virus, more stringent Biosafety Level-3 (BSL-3) containment facilities are required for the manufacturing of Covaxin.
Every batch of manufactured product is subjected to more than 200 quality control tests, prior to its release. It is exactly this complexity that has kept away other companies from developing vaccines, especially whole virion inactivated vaccines.
"Private procurement is only discretionary. Unlike most medicines and therapeutics, vaccines are provided free of cost by the Govt 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,” it added
"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.”
Low product price realisation dispirits domestic R&D, the vaccine maker said, adding: “Companies such as Bharat Biotech, which are innovators with specialised expertise in product development, and large scale manufacturing, should be allowed to maintain a differential pricing strategy for Governments and private hospitals.”