Bharat Biotech says Rs 150 per Covaxin dose to government not sustainable

The vaccine maker has said that it had to invest over Rs 500 crore at risk from its resources for product development, clinical trials, manufacturing.

Bharat Biotech's Covaxin pricing

(Image Source: Reuters)

Updated: Jun 15, 2021, 05:52 PM IST

Hyderabad-based vaccine manufacturer Bharat Biotech on Tuesday said that the rate at which it was supplying its COVID-19 vaccine to the government was ‘not sustainable in the long run’. Bharat Biotech supplies Covaxin to the Central government at Rs 150 per dose.

The company said that the Centre’s supplying price is pushing the pricing structure for the private sector upward. Hence, a higher price of Covaxin in private markets is required to offset part of the costs, Bharat Biotech said.

Bharat Bharat said fundamental business reasons ranging from low procurement volumes, high distribution costs, and retail margins among few others contribute to higher pricing of the vaccine.

The vaccine maker has said that it had to invest over Rs 500 crore ‘at risk’ from its own resources for the product development, clinical trials, and setting up of manufacturing facilities.

Bharat Biotech said, “At the outset, one must remember that the pricing of vaccines and other pharmaceutical products heavily relies on a series of factors; the cost of goods and 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.”

Bharat Biotech said less than 10% of the total production of Covaxin has been supplied to private hospitals, while most of the remaining quantity was supplied to the state and Central government.

The company also said that the procurement of vaccines by private hospitals was only an additional choice.

“Unlike most medicines and therapeutics, vaccines are provided free of cost by the government 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. 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,” the company said.

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