Vaccine prices were shared with Centre beforehand | Economic Times

Vaccine makers had shared their pricing rationale with the government of India (GoI) before their public announcements and the GoI knows the logic behind these prices, senior officials of vaccine companies told ET.A few months ago, vaccine makers had told the finance ministry of their plans on how they were looking to price their products during negotiations on procurement of vaccines and funding for manufacturing.In a meeting presided over by the prime minister on April 20, vaccine makers had shared details on the cost of production and mark-up. 82250392Besides the R&D costs, companies justified the vaccine prices to the government by comparing the cost of hospitalisation due to Covid-19, which comes to Rs 5 lakh, the cost to the economy due to the pandemic and the future scope for innovation.The companies also shared advance purchase orders of a few countries that had placed vaccine orders at $15 per dose.“We had shared the pricing details with the government; we had shared the cost of R&D, future growth strategy and discussions from countries where there are advance purchase agreements. Only after a nod from the government, we announced the pricing,” said an official of a vaccine maker who spoke on condition of anonymity due to the sensitivity of the matter.The cost of production for a vaccine is estimated to be $4 or ₹300 and companies are looking at a mark-up of 25-30% over cost. Other vaccine makers who have their candidates in advanced stages of trial are looking at pricing the vaccine at ₹700-750 per dose, ET has learnt.Last week Serum Institute of India (SII) and Bharat Biotech (BB) — the makers of the two vaccines currently available in India — announced the prices at which they plan to sell to the state government and private market.The vaccine prices for state government procurement are ₹400 per dose for SII and ₹600 by Bharat Biotech. For the private market, the price is ₹600 and ₹1,200, respectively, for SII and Bharat Biotech.From May 1, India has opened up vaccination for all those who are above the age of 18, and the GoI has asked state governments to procure vaccines directly from companies and also allowed vaccine makers to sell their vaccines to the private market.In a press statement last week, SII CEO Adar Poonawalla said that government procurement for countrywide immunisation programmes in all countries, including India, has been at a far lower price compared to the prices announced for the programme after May 1, as the volumes for these procurement programmes are very large.He added that Covishield is currently the most affordable Covid-19 vaccine available in the global vaccine market. Poonawalla said that the initial prices of the vaccine were kept very low globally as it was based on advance funding given by those countries for at-risk vaccine manufacturing.Bharat Biotech in a statement said that its vaccine is inactivated and highly purified, making the manufacturing process expensive due to very low process yields. “All costs towards product development, manufacturing facilities, and clinical trials were deployed primarily using internal funding and resources of Bharat Biotech,” said Krishna Ella, company’s managing director, in a statement on Saturday.Another executive of a vaccine company, which is yet to bring their vaccine to the market, told ET that SII and Bharat Biotech should not have initially supplied the vaccine at ₹150 per dose. “By not negotiating with the government, these companies have now put the industry in a spot; how can you first price it at ₹150 and then say the cost is ₹400. In the initial stages ,itself these prices should have been at the current figure that they have announced,” this official said.The Press Information Bureau could not be reached for comment.