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Bharat Biotech says Rs 150 per dose for Covaxin a 'non-competitive price', 'not sustainable'

Bharat Biotech says whole-virion inactivated vero cell vaccines are "highly complex" to manufacture since critical ingredient is based on live viruses, which require highly sophisticated, multiple level containment and purification methods

Covaxin prices are high due to fundamental business reasons -- low procurement volumes, high distribution costs and retail margins, among few others, says the company Covaxin prices are high due to fundamental business reasons -- low procurement volumes, high distribution costs and retail margins, among few others, says the company

Bharat Biotech has said the current price at which Covaxin is being supplied to the Centre is not "sustainable". It said Covaxin prices are high due to fundamental business reasons -- low procurement volumes, high distribution costs and retail margins, among few others. Covaxin is supplied to government at Rs 150 per dose, while the price tag for private market is Rs 1,400 per dose.

The company said less than 10 per cent of Covaxin's production to date has been supplied to private hospitals, while the remaining quantity was supplied to the state and the Centre. "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 per cent of the capacity will be supplied to the state and the Centre, with only 25 per cent going to private hospitals," the company clarified.

It said the supply price of Covaxin to the government at Rs 150/dose, is a "non-competitive price" and clearly "not sustainable" in the long run. This means a higher price in private markets is required to offset part of the costs, it said. "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 also available in the private market at Rs 3,500/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 company said.

It said vaccine pricing depends on numerous factors. "The pricing of vaccines and other pharmaceutical products heavily relies on a series of factors; the cost of goods & 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," the pharma company stated.

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It said the whole-virion inactivated vero cell vaccines (Covaxin derives from this technology platform) are "highly complex" to manufacture since the critical ingredient is based on live viruses, which require highly sophisticated, multiple level containment and purification methods.

"Such high standards of purification automatically lead to significant process losses and low yields save the outcome of a highly purified and safe vaccine," it said.

It requires about 10,000 sq meters of the area to manufacture around 200 million doses of Covaxin annually, the company said. "In comparison, the same quantity of live virus vaccines can be manufactured from mere 1,500 sq meters. Due to the highly contagious nature of the live SARS-CoV-2 virus, more stringent Biosafety Level-3 (BSL-3) containment facilities are required for the manufacturing of Covaxin," it said.

Also read: Covaxin production ramp-up may be delayed by 2 months; to reach 100 mn capacity by Nov

The company also said every batch of the manufactured product is subjected to more than 200 "quality-control tests" before it is released. "It is exactly this complexity that has kept away other companies from developing vaccines, especially whole virion inactivated vaccines," it said.

Also read: US FDA rejects emergency use approval for Bharat Biotech's Covaxin