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EXCLUSIVE | Diverging views emerge within government on whether to provide financial help to vaccine makers

The difference of opinion has especially widened on whether the dire situation at hand requires the government to provide direct funding to the largest vaccine maker in the world.

April 16, 2021 / 04:17 PM IST
Representative Image (AFP)

Representative Image (AFP)

Diverging views have emerged within the government on whether the country's vaccine manufacturers, especially Serum Institute of India (SII), should be provided financial help, say sources.

Last week, CEO Adar Poonawalla had sought Rs 3,000 crore to ramp up production, beyond the 60-70 million doses per month capacity SII currently has. Stressing on the grave compulsions of the company, Poonawalla also revealed that British-Swedish pharmaceutical company AstraZeneca has sent SII a legal notice over delays in the supply of the Covid-19 vaccine.

He had added that the Centre knew about the notice. Poonawala's plea had coincided with reports of vaccine shortages across the country, combined with a massive surge in daily new cases of Covid-19.

The issue has been discussed in at least one high-level meeting since then, officials in the know said. While the Niti Aayog has suggested funds should be provided, certain voices in the Prime Minister's Office continue to raise objections, two sources privy to the developments told Moneycontrol.

The latter's argument is based on the fact that direct funding to a private sector entity would not be feasible given that it will open the government to a wave of subsequent and similar requests from other drugmakers, hospitals and non-government organisations.


"The sense is that there would need to be a fixed guideline in place before such a large tranche of money is disbursed, albeit for emergency purposes, to a private company," a senior source said. SII declined to comment on the issue when contacted for this story.

Pune-based SII is the largest vaccine maker globally. As part of commercial contracts signed with foreign buyers, which includes both foreign nations and private entities, SII is legally bound to sell millions of vaccines outside India. The company is also supplying the United Nations-backed COVAX initiative, which commercially sources vaccines from major producers to distribute in underdeveloped nations. Under the plan, vaccine producers in India have sent out 1.91 crore doses till now, most of them from SII.

Hyderabad-based Bharat Biotech,  which makes the Covaxin vaccine, had also written to the Centre seeking Rs 100 crore to boost capacity. Bharat Biotech's reported manufacturing capacity of roughly 16-17 million doses per month is significantly smaller than SII's. However, the company is a much smaller entity. No final decision has been taken on approving Bharat Biotech's request either, sources said.

However, the government had swiftly accepted another request by both vaccine makers to not halt commercial exports, as reported by Moneycontrol earlier this week. Officials had acknowledged the worrisome possibility of both companies potentially drowning in lawsuits and foreign penalties if they failed to honour their contracts and deliver shipments.
Subhayan Chakraborty
first published: Apr 16, 2021 04:17 pm
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