The Serum Institute of India, which is producing Covishield in India, announced on Wednesday that it will be selling the vaccine to state governments at Rs 400 and to private hospitals at Rs 600 per dose. However, the price of Covishield for the Union government will remain at Rs 150 per dose. This is after the Union government announced on Monday that the vaccine manufacturing companies will have to sell 50% of their vaccine doses to them, and the other half to state governments and the open market.
In an interview to CNBC TV18's Managing Editor Shereen Bhan, Serum Institute of India CEO Adar Poonawalla said that the price of Rs 150 for the Union government was for commitments already made. However, going forward, it will be Rs 400 for the Union government as well. The last commitment was for 110 million doses.
He said that its current rates are half or a third of the price of vaccines anywhere in the world, and their prices in export markets were given in 2020 when the company made contracts without knowing if the vaccine would work. “Those prices were at $4-5, going down to $3 because that time when we got money from different countries, including for Covovax, we didn't even know if the vaccine would work and this was a risk-sharing price we agreed upon for a certain limited amount,” he added. Covovax is SII's version of the COVID-19 vaccine developed by Novavax, a US-based biotechnology company.
On the price tag of Rs 150 at which it is selling 11 crore doses to the Union government, Adar Poonawalla said in the interview that SII was losing money. He added that 50% of the revenue has to go to AstraZeneca as royalty, and it was supposed to be Rs 150 only temporarily. Serum Institute of India is manufacturing AstraZeneca-Oxford vaccine in India as Covishield.
"By opening it up to the private market and the states to procure separately above Rs 150 was also a move to encourage the foreign manufacturers to come here. How are we going to get foreign vaccines in India if they have to sell at Rs 150?” he said, referring to foreign vaccines such as Pfizer and Moderna (which have received emergency use authorisation elsewhere) being allowed to directly enter the market.
Reports stated that the Union government approved Rs 3,000 crore of supply credit to SII. The CEO said it was dialled down to just under Rs 2,000 crore, which will be given as an advance because of the cost of 110 million doses at Rs 150, and will be representative of the doses the government procures.
The shortage of vaccines, he said, should get better in the next two to three months as capacities are ramped up.
States have said that buying the vaccine will put considerable strain on their finances. For this, Poonawalla said, “I don't know why there is such a hullabaloo over every state complaining about this price, because it is their option and not their compulsion.”
He added that states can spend their money if they want to do so and buy it at Rs 400 per dose. He said that the Union government is continuing to give vaccines to states, and the private hospitals can vaccinate as well.
“In effect, the states don't really need to buy anything if they don't want to. They wanted clarity at what price they would have this option, and that is why it is Rs 400,” he said. "There are enough private hospitals to take care of each state... no state really needs to spend any of their money. This is nothing against any of these states that are making noise...If they have excess funds... it's their choice,” he added.
Several companies in India have announced that they will be covering the cost of vaccination for their employees. Adar Poonawalla told CNBC TV18 that the company will not be selling to them directly, but to state governments and private hospitals.
“They go to state governments and they can go to private hospitals which will have the stock. Their employees will go through those hospitals and pay them for it. That is the most logical way of doing it because it’s mainly these hospitals that are equipped to vaccinate and take care of any reactions that may happen,” he said.
"We don't want to start giving vaccines directly to corporates that might not have the medical facilities to treat their staff,” he added.
Dispatches to private hospitals can be expected in the third or fourth week of April, he said. "Vaccines available in a chemist shop may happen after six months where it will eventually be available. Right now, there isn't enough stock or bandwidth that vaccine companies can start giving it in the retail space like normal vaccines,” he added.
Watch: What Adar Poonawala said