A Covishield dose cannot cost more than Rs 780 a dose, Russia’s Sputnik V will cost a maximum of Rs 1,145 a dose and Covaxin cannot be costlier than Rs 1,410 a shot. This includes Rs 150 in GST or Goods and Services Tax.
Bharat Biotech’s Covaxin, the only made-in-India vaccine of these three, is almost double the price of Covishield and costs as much as Pfizer abroad – around $19. It is the third costliest vaccine globally.
Why is Covaxin priced so high?
Experts say Covaxin’s technology involves higher costs.
“Covaxin’s technology is very different from Covishield and Sputnik. For Covaxin, an inactivated whole virus is used, so hundreds of litres of expensive serum have to be imported, and the virus is grown in this serum under BSL labs, with utmost precautions, and then inactivated,” said Rakesh Mishra, Adviser, Centre for Cellular and Molecular Biology.
“I can understand Covaxin costing almost double of Covishield but why Covishield and Sputnik V are differently priced may have commercial reasons. Technology-wise, mRNA vaccines are easiest, cheapest to make and don’t need elaborate facility,” Dr Mishra said.
Pfizer and Moderna are mRNA vaccines. These do not use a live virus that causes COVID-19, but instead instruct body cells to make a harmless piece of “spike protein” found on the surface of the Covid virus. This induces an immune response.
If there is a variant against which existing vaccines prove ineffective, mRNA technology allows a quick rejig to target the new variant. Covaxin’s technology, based on inactivated virus, means a long and cumbersome process for the vaccine to be repurposed for any new variant, says Dr Mishra.
Experts say the price of vaccines in use now worldwide is far lower than what is being charged for Covid vaccines, which were developed in the past year.
For example, the Pentavalent vaccine will be procured for a global programme at Rs 17.37 a dose from Serum Institute, Biological E and Indian Immunologicals.
The price of the measles vaccine supplied by the Serum Institute to UNICEF, which is also a live vaccine, is 39.6 US cents or Rs 30 per dose.
The rabies vaccine, which uses the technology of an inactivated virus, similar to Covaxin, is sold at Rs 200 per dose.
A price of Rs 1,200 (excluding GST) for the inactivated Covid vaccine is therefore very high.
What goes into the cost of a vaccine includes raw material, packaging, overheads like plant operation and maintenance, expenses in getting licenses, cost of product development and clinical trials.
Industry sources say the prices fixed for the vaccines may be up to three times the cost incurred. Marketing, including the education of health workers on the use of the vaccine, may account for another 30 per cent. Then there are taxes and the share paid to the supply chain of distributors, stockists and retail chemists.
After all this, a pure vaccine manufacturer in India still manages to make a profit of Rs 3-4 a dose, according to experts. Those involved in product development and manufacture end up earning a profit of Rs 10 a dose.
Among those who have questioned Covaxin’s price is activist BV Seshagiri, who refers to Bharat Biotech’s Krishna Ella declaring last year that the vaccine would cost less than a fifth of a water bottle.
@BharatBiotech CMD Dr.Krishna Ella 4 August 2020, “Covaxin will cost 1/5 of a Water Bottle.” @MoHFW_INDIA Memorandum Dt. 8 June 2021 Fixation of Covaxin MRP Rs.1200 + 60 GST + Rs 150 Service Charge = Rs1410/-
Please can you clarify?#FreeVaccineForAllpic.twitter.com/5DPu9rdbp6
— SG (@seshagiribv) June 9, 2021
Experts say when volumes and the number of manufacturers increase, price are expected to come down.