Vaccine ramp-up: Advance of Rs 4,500 crore to be paid to SII, Bharat Biotech

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April 21, 2021 2:00 AM

Amid a spurt in Covid infections, the advance payment – as opposed to grants asked for – is aimed at enabling the firms to scale up production of the vaccines, ahead of the third phase of vaccination from May 1, where everyone above 18 years can get the jab.

The health ministry will release the payments to SII and Bharat Biotech through its procurement agency.The health ministry will release the payments to SII and Bharat Biotech through its procurement agency.

The Centre will release Rs 3,000 crore as advance payment to Covid-19 vaccine maker Serum Institute of India (SII) and another Rs 1,500 crore to Bharat Biotech towards vaccine supplies till July by amending procurement norms, a finance ministry official said. A proposal in this regard was floated by the health ministry.

Amid a spurt in Covid infections, the advance payment – as opposed to grants asked for – is aimed at enabling the firms to scale up production of the vaccines, ahead of the third phase of vaccination from May 1, where everyone above 18 years can get the jab.

The cash advance in the form of a supplier’s credit. The relevant procurement norms have been relaxed under the General Financial Rules as the extant norms don’t permit such credit lines without bank guarantee.

“I think the finance minister has approved it. It is in the form of a credit line and will be backed with adequate supplies of vaccines to support the government procurement and the vaccination programme,” Union minister Piyush Goyal said on Tuesday.

The health ministry will release the payments to SII and Bharat Biotech through its procurement agency. Currently, the government procures the vaccines – Covishield (SII) and Covaxin (Bharat Biotech) – at a fixed price of Rs 150/dose. At this price, the Centre could procure about 30 crore vaccines by July against the advance payment to both the manufactures. It is another matter that vaccine makers have been pleading the government to increase its procurement price or give grants to step up productions.

“On behalf of the vaccine industry in India, I would like to thank and applaud Shri @narendramodi Ji, @nsitharaman Ji, for your decisive policy changes and swift financial aid which will help vaccine production and distribution in India,” SII CEO Adar Poonawalla tweeted on Tuesday.

The government on Monday announced a ‘liberalised and accelerated’ Covid-19 vaccination programme beginning May 1, where all above 18 years of age will be eligible to be vaccinated. Also, vaccine manufacturers have been empowered to release up to 50% of supplies directly to state governments and in the open market at pre-declared prices, a move that would boost availability of the prophylactics to the people.

For Covid-19 vaccination, the Budget for FY22 has made a provision of Rs 35,000 crore to cover 50 crore people (Rs 700/person for two doses, including vaccine cost of Rs 400-500). But the current prices fixed by the Centre are even lower at Rs 500/person for two doses. Depending on the vaccination roll-out, a funding pattern will be worked out between the Centre and states and accordingly provisions will be made. If prices are revised upward, the budget provision may have to be enhanced to some extent or the states may be asked to foot part of the vaccination bill.

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