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Vaccination deals between Serum Institute, Bharat Biotech and states: What we know so far

COVID-19 Second Wave Vaccine Drive: It has been a Covishield show so far as state governments make a beeline for developer SII’s office. Bharat Biotech needs to significantly ramp up capacity of Covaxin.

April 29, 2021 / 11:53 AM IST
The supply of vaccines to the states is only likely to begin after the agreement between the companies and them is inked.

The supply of vaccines to the states is only likely to begin after the agreement between the companies and them is inked.

All state governments in India have one common destination these days – the corporate headquarters of the Serum Institute of India (SII) in Pune.

From Chief Minister Offices (CMOs) to health departments of states, the beeline to SII has a single-point demand; to fulfil the critical need for Covishield.

SII is amid hectic confabulations with state governments about their needs and requirements. “In a couple of days, we will have the final list ready,” a SII official told Moneycontrol.

The Show Stopper

Even though India has another producer of vaccines, Hyderabad-based Bharat Biotech, it is pretty much a Serum Institute of India show in this country.

COVID-19 Vaccine

Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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It is not hard to see why. SII is the largest vaccine maker in the world. It produces roughly 70 million doses of Covishield every month, accounting for nearly 90 percent of the total vaccine that India produces and consumes.

The rules of the game are clear. Of these 70 million doses, 50 percent goes to the central government and 50 to the state government, which then passes it on to its private hospitals. This is what SII calls a ‘commitment in advance’.

Bharat Biotech, whose product Covaxin is uniquely indigenous, is a relatively tiny affair, producing about 150 million doses a year. In a confirmation, the Department of Biotechnology recently informed the Parliamentary Standing Committee on Science and Technology, Environment, Forests and Climate Change that the estimated manufacturing capacity of Covishield is 70-100 million doses every month while Covaxin has a planned production capacity of 12.5 million doses a month.

However, neither is producing to full capacity as vaccine makers say they are not earning enough to plough back into capacity enhancement and have publicly called for government assistance.

What About Distribution?

Both companies say they do not have a list of states who they supply their vaccines to, for the moment. Obviously, it is a closely guarded secret, given the ongoing political turmoil over the central government’s decision to ask states to negotiate their own personal `deal’ with the two vaccine companies and with the SII in particular.

What is clear is that the supply of vaccines to the states is only likely to begin after the agreement between the companies and them is inked. The earliest the supplies could resume would be early May, but given the mounting casualties, it would be in all round interest to expedite matters.

However, thanks to government encouragement—not to mention nudge—India is going to increase its vaccine production significantly. The SII is going for a month-on-month vaccine increase of 10 to 15 percent and by July this year, is expected to touch the 100-million doses mark.

It has other vaccines in the pipeline as well. Serum Institute has announced that the launch of Covovax developed jointly by the company and Novavax, which is likely to be delayed to September. Last month, the SII said that a temporary ban by the US on exporting critical raw materials could limit the production of vaccines like Novavax.

An official said that the phase II and phase III bridging trials for Covovax had begun.

The recent bilateral exchanges between India and US have helped clear the air somewhat, but a lot of work needs to be done in the days ahead to obtain more clarity.

The other vaccines on the SII production table include Spy Biotech and Codagenix, a tie up with a US-based company.

Last week, Bharat Biotech announced a scale up of manufacturing capacity to produce 700 million doses of Covaxin annually.

“Manufacturing scale up has been carried out in a stepwise manner across multiple facilities at Hyderabad, and Bangalore. Inactivated vaccines, while highly safe, are extremely complex and expensive to manufacture, resulting in lower yields when compared to live virus vaccines,” the company said in a statement.

To further increase capacities, Bharat Biotech has partnered with Indian Immunologicals (IIL) to manufacture the drug substance for Covaxin. ``The technology transfer process is well underway and IIL has the capabilities and expertise to manufacture inactivated viral vaccines at commercial scale and under biosafety containment,” the Hyderabad-based biotech company said in a statement.

But clearly, the allocation of vaccines to states—particularly at differential prices—is something that the companies have been working on, not the least because they would not like to get caught in a political crossfire between the states and the central government, the chances of which are very high.

In a statement issued last week, the Serum Institute of India has sought to clear the air about the controversy over pricing, saying there is a difference between government and private procurement.

“Government procurement for countrywide immunization programmes in all countries, including India, has been at a far lower price as the volumes are very large. For instance, based on the market conditions, prices of many vaccines in the private market including our pneumococcal vaccine are sold at a higher free-economy price, whereas for the government it is almost 1/3rd of the free market price,” the company said.

On April 28, SII CEO Adar Poonawalla tweeted: “As a philanthropic gesture on behalf of @SerumInstIndia, I hereby reduce the price to the states from Rs 400 to Rs 300 per dose, effective immediately; this will save thousands of crores of state funds going forward. This will enable more vaccinations and save countless lives.”

The company has also termed as `inaccurate’ the comparison between the global prices of the vaccine with India. “Covishield is the most affordable COVID-19 vaccine available in the market today. The initial prices were kept very low globally as it was based on advance funding given by those countries for at-risk vaccine manufacturing. The initial supply price of Covishield for all government immunization programmed, including India, has been the lowest,” it added.

Ranjit Bhushan is an independent journalist and former Nehru Fellow at Jamia Millia University. In a career spanning more than three decades, he has worked with Outlook, The Times of India, The Indian Express, the Press Trust of India, Associated Press, Financial Chronicle, and DNA.
first published: Apr 29, 2021 11:51 am