After facing severe flak over the issue of differential vaccine pricing, the Centre has clarified this Saturday morning (April 24) that vaccines procured by the central government would continue to be provided free to the states.
This clarification however comes in the wake of a major controversy which broke out over media reports that Indians could well end up paying the “highest price” in the world for a single dose of Covishield at ₹600 in private hospitals from May 1.
The Ministry of Health’s tweet that the GOI procurement price for both COVID-19 vaccines remains ₹150 per dose and the vaccines will continue to be provided “totally free” to the states, after media reports emerged about Covishield in India being the most expensive in the world.
An Indian Express report has opened a can of worms by stating that Indians will be forking out more for a single dose of Covishield at ₹ 600 ($8) a dose than any other country in the world, including UK and USA. This exclusive pricing for private enterprises, which was recently announced by SII, translates to about $8 per shot and a Covishield rate card revealed that this is more than its price in any major global market.
Even the ₹400 procurement price — applicable to both state and new Central procurement orders — is higher than the price at which governments in countries such as the US, UK and in the European Union are sourcing directly from AstraZeneca, said the IE report. And, Indians may have to shell out ₹400 (or over $5.30) per dose from their own pockets if the states, already financially stressed with the ongoing pandemic, may not be able to absorb the costs and subsidise the vaccine shot.
This means that a COVID shot will be cheapest at any central government facility but at state government centres and private hospitals, people have to pay more.
Quoting data compiled by the British Medical Journal, the IE report then said what other countries are paying for the vaccines: while the 27-nation EU, with its steep manufacturing costs, is paying just $2.15-$3.50 for a shot of the vaccine, the UK is paying about $3 per dose and the US at $4 per dose. Brazil is reportedly paying $3.15 per dose for the AZ vaccine through a state-owned foundation, which is another licenced producer like SII.
Even Bangladesh, according to Reuters, is paying an average of $4 per dose supplied by SII. The report then casts a shadow over how SII in Pune, who is merely manufacturing Covishield under a license developed by Oxford-Astra Zeneca on a contract basis, is charging such high rates in the midst of a virulent second wave raging in the country.
However, the report quoted SII Adar Poonawalla’s interview with CNBC-TV18, in which he defended why Covishield’s price in India is now higher than in other countries. According to Poonwalla, their prices were negotiated “a long time ago” for limited quantities when there was uncertainty about its success. In SII’s defence, he had said that 50 per cent of his revenue has to be given to AstraZeneca as a royalty and that is also why the price at ₹150 to the Centre was just not making sense.
In another television interview Poonawalla had said that the highly subsidised rate of ₹150 ($2.02) with GST he was giving to the Centre for a “limited time” was only because of a request from the “Modi government”.
It is in this interview with NDTV he had said: “We’re supplying in India at approximately ₹ 150-160. The average price is around $20 ( ₹1,500)… (but) because of the Modi government’s request, we are providing at subsidised rates… It is not that we’re not making profits… but we are not making super profits, which is key to re-investing,” he told NDTV earlier this month.
This admission by Poonawalla of making profits even at ₹150 is what Congress leader and MP, Jairam Ramesh too latched onto in his tweet.
“Made in India & highest price for India?”, he tartly mocked in his tweet on Saturday, adding that by SII’s own admission profits are made even at ₹150 and demanded that the Centre should renegotiate with SII.
As India is poised to open up its vaccination programme by extending it to a wider age group of 18 years and above from May 1, the Centre had recently tweaked its vaccine policy and told the states and private enterprises to buy the vaccines directly from the manufacturers. Earlier, the Centre was buying Bharat Biotech’s Covaxin and SII’s Covishield and distributing them free to the states.
However, when SII declared different vaccine pricing rates for states at ₹ 400 a dose and ₹ 600 for private hospitals, and ₹150 a dose for the Centre, it created a furore in the country, with leaders from different states protesting against this “discriminatory” pricing. They criticised the Centre for shirking its responsibilities and making states compete with each other.
Meanwhile, Senior Congress leader P Chidambaram on Friday suggested states should jointly form a price negotiation committee to work out a uniform rate with the manufacturers.