10 Jun 2021: After updating vaccine policy, Centre may renegotiate Covishield, COVAXIN prices
After India's COVID-19 vaccination policy was updated this week, the central government is likely to renegotiate prices for vaccines, a report suggested. The Centre is currently paying Rs. 150 per dose for both Covishield (manufactured by the Serum Institute of India) and COVAXIN (manufactured by Bharat Biotech). The new price is reportedly yet to be decided. Here are more details.
New policy: What is the new vaccination policy?
Under the new policy, the Centre will procure 75% of all vaccine doses and provide them to states/union territories for free. The remaining would be available to private hospitals at a price. Earlier, 50% of vaccines were going to the Centre (which would be given free to states/UTs), and the remaining 50% was available to states/UTs along with private hospitals at a higher price.
Report: Centre may pay more than Rs. 150/dose: Report
A senior government official told The Indian Express that the Centre is likely to renegotiate prices with Bharat Biotech and SII, but the new price remains undecided. This week, the government said it has placed an advance order for 44 crore doses. The price for this wasn't specified, however, sources told the Hindustan Times that the Centre may have to pay over Rs. 150/dose.
Fact: SII losing money by selling doses at Rs. 150: CEO
SII CEO Adar Poonawalla had earlier told CNBC-TV18 that the company is losing money by selling the vaccine at Rs. 150 per dose. "We have to pay 50% of the price to AstraZeneca as royalty," Poonawalla had said.
Changes: New policy to cost Rs. 50,000 crore
The Centre's new vaccination policy will provide free vaccines to all people above the age of 18 years from June 21. The new scheme will likely cost Rs. 50,000 crore, which is higher than the Rs. 35,000 crore budget earmarked by the Centre for vaccines during the Union Budget in February. Finance Minister Nirmala Sitharaman had said the allocation may be increased if required.
Background: How have the prices changed in the past?
When the vaccination drive was launched on January 16, the Centre procured 11 million Covishield doses at Rs. 200/dose and 5.5 million COVAXIN doses at Rs. 206/dose. The prices were later lowered to Rs. 150/dose. Till April, private hospitals were procuring doses at Rs. 250 each from the government. In April, vaccine manufacturers were allowed to fix rates for states and private facilities.
Fact: SII, BB fixed higher rates for private players in April
SII fixed Rs. 400/dose for states and Rs. 600/dose for private facilities, while Bharat Biotech had settled on Rs. 600/dose and Rs. 1,200/dose for states and private facilities, respectively. The rates were revised to Rs. 300/dose for Covishield and Rs. 400/dose for COVAXIN for states.
New rates: COVAXIN now world's third most expensive vaccine
Private facilities are being made to procure doses at a higher price to incentivize production by manufacturers. As per a new circular, the price for private hospitals of Covishield has been fixed at Rs. 780/dose, Sputnik V at Rs. 1,145/dose, and COVAXIN at Rs. 1,410/dose. This makes COVAXIN the world's third most expensive vaccine after China's Sinopharm (Rs. 2,080) and Pfizer (Rs. 1,423).
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