Adar Poonawalla, the CEO of the Serum Institute of India is one of the most important men in the country today. Not only because he is leading the world’s largest vaccine producer, but also because of the scrutiny faced by him.
Serum Institute’s ‘Covishield’ is developed outside the country but is licensed in India.
The second leading Indian vaccine for the fight against Covid-19 is ‘Bharat Biotech Limited’s Covaxin’.
Adar Poonawalla’s Covishield is currently producing 2 Million doses per day to take on the second, more deadly wave of the Coronavirus pandemic.
While this number has been varying every month, the Serum Institute is churning out approximately 60-65 M doses on a minimum every month and has already delivered 100 M doses.
Profits being made by Adar Poonawalla
Poonawalla’s Serum Institute is making profits but not super profits which are necessary for reinvestments. Poonawalla is struggling to make profits in the current climate. Serum Institute is obligated to make payoffs. It’s vital that the company make profits since diverting all of the production to meet local needs is not feasible.
A total of 19 states have already placed orders for 340 million doses of Covishield while 18 Million orders were received from private hospitals. At Rupees 300 per dose, and 50% of the royalty being placed in the hands of AstraZeneca as royalty, the pharma company is barely making a profit enough to support manufacturing.
Covishield’s pricing is being controlled by the Indian Government which has failed to do its bit in ensuring profits for Serum Institute and Adar Poonawalla. Presently, Covishield is profitable on a per dose basis since a price hike was done. Since Serum was losing money at 150 Rupees per dose which was the Central Government’s mandated price, the price hike was seen as necessary.
The answer is that Serum is selling the vaccine at a loss to the centre and with the price disparity, huge profits are not being made.
Adar Poonawalla: National Hero or Tough businessman?
Adar Poonawalla’s efforts to roll out Made in India vaccines led to him being viewed as a national hero. But the scrutiny around the vaccine’s pricing is leading people to believe that he is just another tough businessman profiteering off a pandemonium.
The price disparity between sale of vaccines to states (INR 300) versus to the Central Government (INR 150) received heavy criticism amidst demands for ‘One Vaccine One Price’. But the Serum Institute is offering subsidised rates to the Government at their behest amidst a killer second wave that has already claimed unaccounted lives in under two weeks.
Serum Institute has priced their vaccines to ridiculously low levels so that the country’s impoverished can get access to their shots. [They were in fact expecting the Indian Government to step in and help ensure that profits were made. But the Government failed to make it.] Serum Institute and Adar Poonawalla have sacrificed profits and the global vaccination industry, including the one in India, has sacrificed billions to ensure that citizens sail through the pandemic.
Covishield making big bucks or supplying at a loss?
Serum Institute’s Covishield Vaccines are being supplied, but there’s a problem. The discriminatory prices set against the centre and the states raises the question of the company’s profit or loss.
The answer is that Serum is selling the vaccine at a loss to the centre and with the price disparity, huge profits are not being made. The company is making a loss of approximately Rupees 150 per dose.
What’s in it for me?
Serum Institute and other vaccine producers like Bharat Biotech are very stressed to meet capacities. They are short of supply to meet the needs of every individual within the country and abroad. These vaccine producers can fulfil demand and make profits only when other vaccine producers also scale up their capacities.
The possibility of obtaining exclusive manufacturing rights and vaccine patents look bleak at the moment. By following in the footsteps of Serum Institute, through technology transfers and license procurement, vaccine producers and pharmaceutical companies in India need to gear up for the coming months.