PremiumUnlike 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, the company said.
Amid criticism over Covaxin being priced ₹1,200 per dose in private hospitals, Bharat Biotech on Tuesday defended its higher pricing of the covid-19 vaccine in private hospitals, saying that the price is aimed at recouping its costs and that private procurement of doses is discretionary when the government is providing shots for free.
“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," the company said in a statement on pricing of vaccines.
The company has currently priced its indigenously developed covid-19 vaccine at ₹150 per dose, while private hospitals are charged ₹1,200 for securing a dose. While states are currently being asked to pay around ₹400 per dose, this will be done away with when the Centre’s revised policy of procuring 75% of total doses on behalf of itself and the states comes into effect on Monday.
The remaining 25% will be procured by private hospitals, and the Hyderabad-based company argued that the company should be allowed to charge higher prices for the vaccine in the private market as supplying 75% of its vaccines at ₹150 per dose is not sustainable in the long-term.
The vaccine developer said that it has invested over ₹ 500 crores at risk from its own resources for product development, clinical trials and setting up of manufacturing facilities for Covaxin, and also has to pay royalties on product to the Indian Council of Medical Research and Pune’s National Institute of Virology, both Centre-run institutes, as they providing support to the company in its product development stage.
Bharat Biotech also has to pay royalties to US-based firm Virovax for use of the adjuvant—chemical used to boost immune response—it developed for the vaccine, it said, adding that not allowing dual pricing for the vaccine may hinder innovation in India.
“It may well be argued that the low-price realization for home-grown innovators constraints innovation and product development in India. In the absence of a dual pricing system, Indian vaccine and pharmaceutical companies risk being reduced to mere contract manufacturers with intellectual property licensed from other nations," Bharat Biotech said.
The statement comes amid the backlash the company has faced over the last two months after the company announced ₹1,200 per dose as the price of vaccine for private hospitals. The criticism was especially directed at Bharat Biotech chairman and managing director Krishna Ella, who had in August last year claimed that the vaccine will be priced cheaper than a bottle of water.
It also comes at a time when India is facing an acute shortage of vaccines, especially since the government announced the opening up of vaccination to all adults of age 18 years and above—which accounts for over 900 million people. Since then, the shortage has become more acute as the ballooning demand has not been able to match the supply.
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