Vaccine-makers, private hospitals miffed as Centre caps price of COVID-19 vaccine

India's status as a major low-cost vaccine producer got buttressed as several countries launched mass vaccination against the COVID-19, almost a year after the outbreak of the pandemic, with supplies from Indian companies.

In India, the central government has capped the price at Rs 250 per vaccine dose at private hospitals, though the suggested two shots are free for healthcare workers and other frontline warriors against the disease who were chosen for the first phase that had commenced from mid-January.

The second phase of vaccination started the other day for citizens above 60 years and those with comorbidities in the age group of 45-59. Even in this, the vaccination through government facilities was made completely free.

However, vaccine-makers and hospitals are dejected as the price set by the government is too low that the margins that accrue to them are insignificant.

Price in India

Though the price of COVID-19 vaccine in the global market is relatively high, the price in India is comparatively low.

The Government of India has directed that the two COVID-19 vaccines which are being administered in India, Covishield and Covaxin, should not cost more than Rs 250. The Centre bought in the restriction, hopeful that the funding by the central government and various agencies would initially support the companies. As some are apprehensive about the efficacy of vaccination, the government has adopted the approach of lowering the price as much as possible to draw more people to vaccination. The government itself has indicated that a price, more acceptable for the companies, would be allowed when the vaccine gets wide acceptability.

Currently, for every dose of vaccine, Rs 150 goes to the companies while Rs 100 is the service charge of the hospital that administers the vaccine. While the vaccine companies are unhappy over the maximum price, a section of the private hospitals is dissatisfied over administering the vaccine for a paltry margin.

Significant personalities in the pharmaceutical sector have already voiced their displeasure in public.

Kiran Mazumdar-Shaw, the chairperson of Biocon, a bio-pharmaceuticals company, had spoken against the capping of the vaccine price at Rs 250. She had complained that the price was too low to sustain and that the vaccine companies felt betrayed by the government. While pointing out that even the World Health Organisation had agreed to the price of $3, she sought to know why the cost has to be further lowered.

The risk in administering vaccines that have not completed the trial phases and the low profits are acting as deterrents for hospitals.

COVID-19 vaccine prices across the globe

The most expensive COVID-19 vaccine in the world is the one developed by the Sinovac Biotech in China, as per the available data. One dose costs up to Rs 2,200. The price of Pfizer-BioNTech vaccine, distributed in most countries in the world is Rs 1,400, while that of the Moderna vaccine is Rs 1,300.

Russian's Sputnik vaccine, which is expected to be made available in India soon, might cost up to Rs 730.

The Covishield, which is used in India, has different rates in the global market. The Covishield is available for Rs 390 in Saudi Arabia and South Africa, while the cost in Brazil is Rs 370.

Normal price range

The price of major vaccines against other diseases too should be considered as a benchmark in this context. For instance, one dose of vaccine against the Human Papillomavirus (HPV) would cost anywhere between Rs 2,200 and Rs 2,700. This pneumococcal vaccine was developed locally and this reflects in the price as well.

But other vaccines widely used in India are developed by Pfizer and Merck Sharp & Dohme Corp (MSD). Up to Rs 3,200 needs to be shelled out for the Pfizer vaccine. The flu vaccines would also cost between Rs 500 and Rs 1,500. The vaccines against Hepatitis B cost less than Rs 100.

Usually, the price of any commodity, including vaccines, would reduce when the vaccines are widely used.