Financial Express Online learns that while in three weeks since India began the vaccine drive, 4.43 million doses administered while the government has a stock of 11 million doses from Serum Institute alone (11 million directly from the company and another 10 million under the global COVAX initiative) and this is excluding the Bharat Biotech vaccine, which is being administered is a clinical trial mode. Almost all the major platforms to make the vaccines are being carried out in India by at least half a dozen leading Indian vaccine companies and many smaller companies. The two vaccines approved by the Indian government for emergency use also do not have the challenge of storage at ultra-low temperatures and there is the assurance of adequate supplies.
The finance minister Nirmala Sitharaman in the Budget 2021 set aside Rs 35,000 crore, which works out to Rs 250 per person or if taken at Rs 400 for two doses will cover 40 percent of the population. Sanjeev Sanyal, the principal economic adviser in the ministry of finance, speaking to Financial Express Online, while opting to leave it to the subject specialists to look at how the cost and distribution worked, felt it is only logical that with volumes growing and demand increasing prices will only see a downward trend. But then, experts even today, feel there is a strong case for the India-made vaccines to cost much lower than what they are today.
K V Balasubramaniam, an independent consultant and the former managing director of Indian Immunologicals Ltd, says for the vaccines that are today being made available in India, the variable cost of vaccine should be around Rs 10 per dose or slightly higher, and the full cost close to a dollar and not more.
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He justifies this based on what he calls, six clear reasons: One, these are both known technologies and do not involve a complex manufacturing process. Two, there is no research and technology development costs involved at least in the case of Serum unlike for Bharat Biotech. Three, the clinical trials are smaller in one case and largely a bridging study whereas in the other case involving a higher number of over 25,000 volunteers but then even then the cost of clinical trials in India is much lower than in countries abroad. Four, the volumes are high and the vaccine costs are largely fixed costs. Five, the vaccines are being made available in 10 or 20 dose vials and these normally bring down the costs. Six, and finally, there are no marketing costs involved as the companies need to supply only to the government in India. All of these, put together, he argues the selling price of the vaccine, including all the royalty payment, fixed costs, and margins included, should not be more than Rs 60 or perhaps less than a dollar a dose or at least much less than the current prices of Rs 200 (Serum’s price) and Rs 295 (Bharat Biotech’s price) per dose that it is offering to the Indian government.
When Financial Express Online checked the pricing and costing with Serum, the argument was that it is wrong to conclude that the vaccine was over-priced. The vaccine is a numbers game and if the volumes are low and the built-in capacities are not fully utilized but the same level of power supply and airconditioning needs to be put to use 24X7 and if there is new state-of-the-art machinery, fully computerised machinery is installed then costs will be very high when the volumes are low and will start reducing when full capacities get utilized and volumes rise sharply.