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Vaccine-makers to reap windfall profits: Congress

Our Bureau New Delhi | Updated on April 26, 2021

Serum Institute of India (Covishield) and Bharat Biotech (Covaxin) to amass profits of Rs 1,11,100 crore, the party has alleged

The modified vaccination policy will help Serum Institute of India (Covishield) and Bharat Biotech (Covaxin) amass profits of ₹ 1,11,100 crore, the Congress alleged on Sunday. The party’s Health Ministers in Chhattisgarh, Jharkhand, Punjab and Rajasthan also accused the Centre of drafting a vaccination policy to suit the profiteering by the two companies than aiming at the welfare of the people.

Party general secretary incharge of media, Randeep Singh Surjewala, said the Centre will not vaccinate those between 18 and 45 years of age and the number of people in this age group is 101 crore and they will need 202 crore doses for full vaccination. Surjewala said that based on the current production capacity of the two manufacturers, 50 per cent of this demand will be fulfilled by Covishield and 50 per cent by Covaxin.

Pricing math

Surjewala said if the cost of production and a minimal profit is included, the amount for one dose will be ₹150. If the States cover 50 per cent of these 101 crore doses and 50 per cent doses will be taken directly by individuals through private hospitals, then profits earned by Serum Institute of India from States for both doses will be ₹12,625 crore and that earned from individuals will be ₹22,725 crore. The amount the company has decided to price its vaccine at ₹400/dose for States and ₹600 for individuals. “The total estimated profits for SII will be ₹35,350 crore,” he added.

In the case of Bharat Biotech’s Covaxin, which is priced at ₹600 for States and ₹1,200 for individuals, the profit adds up to ₹75,750 crore, per its calculation, the Congress said. “Profits earned by Bharat Biotech from States for both doses will be ₹22,725 crore and from individuals ₹53,025 crore,” he said assuming that the cost of production with a marginal profit is ₹150 for a dose.

“The vaccine policy of the Modi Government has permitted the two vaccine manufacturers to fix prices for supply to State governments and to private institutions by their own volition,” Surjewala said.

“Based on this and assuming that States will provide 50 per cent of the vaccination and individuals will bear 50 per cent of the vaccination cost, the profit of the two vaccine manufacturers, Serum Institute of India and Bharat Biotech, will be ₹1,11,100 crore,” he charged.

The Health Ministers of the four States also came down on the policy. Rajasthan’s Health Minister Raghu Sharma said the companies have told his officials that no commitment can be made before May 15. “This is the situation. The Centre should explain how States should provide vaccines for people above 18,” Sharma said.

Congress leader and former Finance Minister P Chidambaram said there is a body of opinion that even at ₹150 per dose, the two manufacturers will make a small profit. “If true, at ₹400-1,000, it will be profiteering. Perhaps, that is what the government wants. Will the Ministry of Health please respond?,” he asked.

Published on April 25, 2021

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