Brazil suspends $324 million Covaxin contract amid accusations of irregularities

The Brazil Health Ministry signed a contract for 20 million Covaxin doses in February. (Image: Reuters)

Brazil has suspended around a $324 million contract for Covaxin after accusations were made that President Jair Bolsonaro had turned a blind eye to possible corruption in a deal to purchase the COVID-19 vaccines.

A former employee at the Brazil health ministry earlier informed the prosecutor’s office that he told Bolsonaro that he had been pressured to sign a contract that would increase the average price of doses by 1,000 percent.

Read: Brazil probes Health Ministry deal to buy Covaxin vaccine

The Health Ministry official said he had faced pressure to greenlight the import of Indian pharmaceutical Bharat Biotech’s Covaxin vaccine and that there were irregularities in the invoices — particularly a $45 million upfront payment to a Singapore-based company.

Bolsonaro has denied any wrongdoing, saying that he was not aware of any irregularities.

Brazil Health Minister Marcelo Queiroga said at a news conference his team would probe the allegations.

"According to the preliminary analysis of the CGU, there are no irregularities in the contract but, for compliance, the Health Ministry chose to suspend the contract," the ministry said in a statement.

Brazilian federal prosecutors have also opened an investigation into the deal, citing comparatively high prices, quick talks and pending regulatory approvals as red flags, as per a Reuters report.

The claims have added fuel to the opposition's impeachment drive. One of the leading opposition senators has also filed a formal criminal complaint against Bolsonaro at the Supreme Court.

Senator Randolfe Rodrigues said he had wanted the court to investigate "the serious allegations" and to find out why Bolsonaro "did not take any action after being notified of the existence of a giant corruption scheme in the Health Ministry.

Meanwhile, Bharat Biotech has denied any allegation of wrongdoing with respect to vaccine supply. The company said in an emailed statement that it had adhered to the highest standards of compliance, as reported by AP.

The Brazil Health Ministry signed a contract for 20 million Covaxin doses in February. However, the government has not made any payments yet nor are any vaccines provided due to obstacles in the health regulator’s approval process.

Brazil agreed to pay $324 million — at a cost of $15 per vaccine dose, the most expensive of all vaccines Brazil purchased — to Precisa Medicamentos, the representative of Bharat Biotech in Brazil, according to a document sent to the AP by the prosecutor-general’s press office.

National Health Surveillance Agency of Brazil- Anvisa approved the import of the Covaxin vaccine with restrictions on June 4, allowing the entry of only four million doses.

(With inputs from agencies)