India has two major vaccine producers, Bharat Biotech and Serum Institute. Both of these vaccine makers have been changing their pricing due to two factors; lack of profits and public outcry. But now, finally the prices of both these vaccines have been slashed by INR 100 (Covishield) and INR 200 (Covaxin) per dose for supply to state governments.
Reason behind vaccine price cuts and reductions
Vaccine producers are working towards supplying to state governments at lower costs in order to help them support the public healthcare system and to ease their burden.
This is because the price being offered to the state governments is still double the amount at which the central government is procuring the vaccines.
The price reduction for Covishield stands at 25% which has not yet garnered the acceptance of people.
Pricing Policy on Shaky Grounds
The two prominent vaccine manufacturers had earlier raised prices because they were struggling to make ends meet and struggling to meet demands. The pricing policy of these manufacturers is on shaky grounds due to the discrepancy and they are not sure whether they need to defend their pricing, stick with it, or change it. It’s a very vulnerable time for them.
Price cuts are not justified
The price slashing being announced with much pomp and show on the media is not justified since the price of Covishield in India is markedly higher than in other countries like South Africa and Sri Lanka where it is priced at INR 300 per dose. In the European Union, Covishield is priced at INR 160 per dose and in the UN initiative, it is INR 225 per dose.
So the price cuts don’t make sense. But in India, production is hampered due to lack of initiatives by the Government. There are calls for vaccine price moderations under an act by the Government. The public is at unrest regarding the Central Government’s decision to allow manufacturers to fix the price of vaccines, a move which is unjustified to the common man.
Covid vaccines come under ‘essential commodities’ under the Essential Commodities Act 1955 and the Disaster Management Act 2005. There are calls for these acts to be invoked.
What’s in it for me?
Vaccine producers are being extremely transparent and are pumping in a lot of internal funding to support manufacture. Since public health is at a critical stage, there is no question of making profits. The main motive of Covid vaccine manufacturers is to save lives.
India’s top vaccine maker the Serum Institute of India (SII) is producing vaccines at a rate incomparable with any other organisation. If you are a drug or vaccine maker thinking of stepping into the game, you need to ramp up your supplies to fulfil shortages and demands, especially in India.
Pharma or Healthcare start-ups planning to assist in India’s covid fight need to be consistent and transparent with their pricing policy. Whether you are supplying drugs, vaccines, or other medical support, it will be a public interest project. Healthcare start-ups fighting the pandemic need to take a not-for-profit approach. There is also a lot of ground for innovation, especially around intranasal vaccines, etc.