DNA Explainer: Why Bharat Biotech's Covaxin is costlier than other vaccines

Hyderabad-based vaccine manufacturer Bharat Biotech on Tuesday issued a statement explaining why Covaxin remains the most expensive COVID-19 vaccine in India. 

According to the company from low procurement volumes, high distribution costs, and retail margins are some of the reasons contributing to the higher pricing of Covaxin to the private sector.

Bharat Biotech, which indigenously developed Covaxin with the aid of the Indian Council of Medical Research (ICMR), had priced its vaccine at Rs 600 for state governments and Rs 1,200 for private hospitals. 

The Central government had allowed Serum Institute of India and Bharat Biotech to set their own prices for COVID-19 vaccines for procural by private entities and state governments. 

However, after widespread public outcry and criticisms from various state governments, the company had slashed the rates to Rs 400 for state governments. 

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

The company says that in such a scenario average price of Covaxin for all supplies is less than Rs 250 per dose with 75% of vaccines being supplied to State and Central Governments.

Bharat Biotech, which has developed Covaxin has been giving COVID-19 vaccine to the Centre at Rs 150 per dose. The prices are different for private hospitals and states.

The company in a statement said that the supply price of Covaxin to the government at Rs 150 per dose, is a non-competitive price and clearly not sustainable in the long run.

Hence the company believes a higher price in private markets is required to offset part of the costs.

Bharat Biotech has said that so far it has invested over Rs 500 crores at risk from its own resources.

The company was also going to pay royalties to ICMR and the National Institute of Virology (NIV), based on product sales.

In the absence of a dual pricing system, Indian vaccine and pharmaceutical companies risk being reduced to mere contract manufacturers with intellectual property licensed from other nations, Bharat Biotech added.