Govt must free up Covid-19 vaccine pricing

By: |
March 13, 2021 6:30 AM

It must heed Pfizer’s call; price caps, export controls will discourage pvt sector participation in India’s vaccination efforts

While regulatory ease could be debated from either end, pricing and export freedom is a must.While regulatory ease could be debated from either end, pricing and export freedom is a must.

Pfizer’s interest in producing its Covid-19 vaccine in India—if a Reuters report has it right—is predicated on the government allowing faster regulatory clearance and freedom on pricing & exports. The government must pay heed if it is to get its vaccination strategy right. Pfizer had applied for “accelerated approval” in India, but withdrew its application last month, against the backdrop of the Drugs Controller General of India (DCGI) insisting on the company conducting a ‘bridging trial’. A bridging trial would have demonstrated the safety, immunogenicity and efficacy in the local population, as opposed to the drug regulator having to consider data from trials conducted abroad. So, while the DCGI’s stand would seem prudent, the fact is the roll-out of other vaccines in the interim would have impacted not just recruitment of participants for such a trial, but also the assessment of the vaccine’s efficacy since this is contingent upon normal transmission within a population. It is also important to note that DCGI’s decision to approve Serum Institute of India’s (SII’s) Covishield—which is based on technology licensed from AstraZeneca/Oxford University—seems to have relied primarily on data from overseas clinical trial; while SII’s bridging trial was ongoing at the time, the DCGI, in a statement dated January 3, had said that “interim … data” from the bridging trial that “was found comparable with data from the overseas clinical trials” were factored in.

While regulatory ease could be debated from either end, pricing and export freedom is a must. The government’s decision to cap vaccination costs at private hospitals at Rs 250 per dose—Rs 100 for the hospitals to recover their costs and Rs 150 to be passed on to the vaccine-makers—runs contrary to PM and FM extolling the virtues of the private sector. While the government will give a subsidy of Rs 50 per vaccine dose, bear in mind that SII had talked of providing 10 crore doses to the government at Rs 200 and then selling in the open market at Rs 1,000 per dose. The Economic Times has reported that the government has renegotiated the cost of Covishield further downwards, to Rs 150 plus GST. This, when the Covax initiative of the WHO and Gavi is paying Rs 220-230 per dose and, elsewhere in the world, the vaccine is selling at Rs 290-380 per dose. Assuming that the Rs 160-200 pricing is meant to serve the poor, it is hard to understand why vaccine-makers should be forced to make this pricing available to even those who can afford higher charges. While Budget FY22 allocates Rs 35,000 crore to vaccination, there is no clarity on how many people this would cover. As this newspaper has pointed out before, against a target of 30 crore—the government’s estimate of the priority population—the cost of a single dose is Rs 500-600. So, if the government is forcing the private sector to accept a much lower Rs 150-200, Pfizer’s concerns would seem justified.

Responding to a PIL that calls for classifying lawyers, judges and court staff as ‘frontline workers’ for the purpose of priority vaccination, the Centre has told the Delhi High Court that this can’t be done. As per a Times of India report, the government said that a specific classification on the basis of profession or trade couldn’t be drawn up to prioritise any group. Had the government allowed vaccines to be available in the open market without price-caps, groups wouldn’t be lobbying for inclusion in the priority list since vaccine access wouldn’t likely have been so constrained. The government must now ensure that it doesn’t set exports limits on top of pricing caps; else, the private sector will have no incentive to produce or innovate.

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