Thesupply price of Covaxin to the government of India at Rs 150 a dose is anon-competitive price and clearly not sustainable in the long run. Hence ahigher price in private markets is required to offset part of the costs, BharatBiotech said on Tuesday.
Itsaid there are live examples of such pricing policies where Human Papillomavirus vaccine is priced for GAVI supplies at $4.5/dose (Rs 320), but is alsoavailable in the private market at Rs 3,500.
Rotavirusvaccines are supplied to the Govt of India at Rs 60/dose, but is also availablein the private market at Rs 1,700/dose. The prices for COVID-19 vaccinesinternationally have varied between $10 to $37/dose, (Rs 730 - Rs 2,700/dose).
Onwhy Coaxin is more expensive for the private sector, Bharat Biotech saidanother key point of discussion has been about pricing our vaccines for privatesector players which is significantly higher than that given to governments andlarge procurement agencies. This is purely due to fundamental business reasons,ranging from low procurement volumes, high distribution costs and retail marginsamong few others.
Asdirected by the Govt of India, less than 10% of our total production of Covaxinto date has been supplied to private hospitals, while most of the remainingquantity was supplied to State and Central Governments. In such a scenario theweighted average price of Covaxin for all supplies realized by Bharat Biotechis less than Rs 250/dose. Going forward, 75% of the capacity will be suppliedto State and Central Governments with only 25% going to private hospitals.
Unlikemost medicines and therapeutics, vaccines are provided free of cost by the Govtof India to all eligible Indian citizens. "Thus, the procurement ofvaccines by private hospitals is optional and not mandatory, albeit it gives achoice to citizens who are willing to pay for better convenience. In our view,the question of product pricing is only of extraneous interest to allconcerned, especially when the same vaccine is made available free ofcost", Bharat Biotech said that for the private sector it is optional.
BharatBiotech has so far invested over Rs 500 crores at risk from its own resourcesfor product development, clinical trials and setting up of manufacturingfacilities for Covaxin. The support from The Indian Council of Medical Research(ICMR) was with respect to provision of the SARS CoV2 virus, animal studies,virus characterization, test kits and partial funding for clinical trial sites.In return for this valuable support, Bharat Biotech will pay royalties to ICMRand the National Institute of Virology (NIV), based on product sales. Royaltiesare also payable to Virovax towards the licensure of IMDG agonist molecules, itsaid.
BharatBiotech is investing in new facilities and repurposing existing ones acrossseveral states in India for enhancing the production of Covaxin.
Itis pertinent to mention here that the urgent need to set up a significantnumber of manufacturing facilities and to divert existing ones for Covaxin hasresulted in reduced production of other vaccines at our facilities, leading toloss in revenues.
Itadded that low product price realization dispirits domestic R&D. Companiessuch as Bharat Biotech, which are innovators with specialized expertise inproduct development, and large scale manufacturing, should be allowed tomaintain a differential pricing strategy for Governments and private hospitals.It is distressing to see that a large country like India has a very basic levelof innovation in vaccines and pharmaceutical products, it added.
Itmay well be argued that the low-price realization for home-grown innovatorsconstraints innovation and product development in India. In the absence of adual pricing system, Indian vaccine and pharmaceutical companies risk beingreduced to mere contract manufacturers with intellectual property licensed fromother nations, the company said.