Bharat Biotech justifies high price of Covaxin in private market; says it's 'required'

Bharat Biotech has justified the price of its Covid-19 vaccine Covaxin in the private market by stating that it is needed to offset the unsustainable price at which it provides the vaccine to the government. Covaxin is supplied to the government at Rs 150 per dose, while the price tag for the private market is Rs 1,400 per dose.

"The supply price of Covaxin to the government of India is a non-competitive price and clearly not sustainable in the long run. Hence a higher price in private markets is required to offset part of the cost," the company said in a statement.

Bharat Biotech said that it has been following such differential pricing policies earlier too. "Human Papillomavirus vaccine is priced for GAVI supplies at $ 4.5 / dose (Rs 320), but is also available in the private market at Rs 3500 / dose. Rotavirus vaccines are supplied to the Govt of India at Rs 60/ dose, but are also available in the private market at Rs 1700 / dose. The prices for COVID-19 vaccines internationally have varied between  $10 to  $37 / dose, (Rs 730 - Rs 2700/ dose)", the company said.

According to the company, less than 10 percent of its total production of Covaxin has so far been supplied to private hospitals, while most of the remaining quantity was supplied to state and central governments. "In such a scenario, the weighted average price of Covaxin for all supplies realised by Bharat Biotech is less than Rs 250/dose. Going forward, 75 percent of the capacity will be supplied to state and central governments, with only 25 percent going to private hospitals," it said.

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Bharat Biotech has clarified the support it received from the Indian Council of Medical Research (ICMR) was with respect to provision of the SARS CoV2 virus, animal studies, virus characterisation, test kits and partial funding for clinical trial sites.

"Bharat Biotech has so far invested over Rs 500 crore at risk from its own resources for product development, clinical trials and setting up of manufacturing facilities for Covaxin. In return for ICMR's valuable support, Bharat Biotech will pay royalties to the ICMR and the National Institute of Virology (NIV), based on product sales," the company stated.

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The company also pointed out that private procurement is only discretionary as unlike most medicines and therapeutics, Covid-19 vaccines are provided free of cost by the Centre 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. 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," Bharat Biotech said.

The company also informed that it is investing in new facilities and repurposing existing ones across several states in India for enhancing the production of Covaxin and the strategy has resulted in reduced production of other vaccines, leading to loss in revenues. "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," it stated.

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