Home >Budget >News >Budget 2021: Vaccine firms, ancillaries look at strong demand on govt's 35,000-cr procurement plan

New Delhi: Vaccine manufacturers and ancillaries are anticipating a strong demand from the government for Covid-19 vaccines alone after the government announced its plans to procure 35,000 crore worth of jabs, an amount estimated to be enough to vaccinate roughly half of the country's population.

Rajiv Nath, managing director Hindustan Syringes and Medical Devices, one of the world’s largest manufacturers of syringes for vaccination, said that “the generous outlay of 35,000 crore for Covid vaccination will cover the procurement of vaccines and auto-disable syringes, as well as the logistics and drug delivery costs for a substantial number of high risk and vulnerable population".

The company is currently producing 2.4 million syringes per day and will soon be scaling it up to 4 million by September to meet India’s as well as the global demand for syringes.

While Hindustan Syringes’ plan for capacity expansion was already in place, one of India’s largest glass vial manufacturers, Schott Kaisha, late Monday announced a further capacity expansion after the Budget.

“This year’s unprecedented increase in the budget allocation is further assuring for the pharma industry as it is working to provide for the mammoth task of immunizing 1.3 billion Indians. As the first phase of the vaccine drive continues, Schott Kaisha has today announced a fresh investment to further increase vial production capacity by another 100 million pieces from its manufacturing sites based in Gujarat and Daman," Rishad Dadachanji, Director of Kaisha Group of Companies, said in a statement.

While the vial manufacturer, a supplier to Serum Institute of India, had already started 122-crore investments to increase its annual capacity by 300 million pieces to 1.5 billion vials by December, a further 100 million increase will be completed by mid- 2022, he said.

On Monday, Bharat Biotech International chairman and managing director Krishna Ella had also said that the 35,000 crore budget for Covid-19 vaccination in 2021-22 and the finance minister’s commitment to providing more funds “will provide an effective, smooth path for the vaccination scheme".

Most industry executives expected the allocation to be sufficient for procurement of vaccines for all those above 50 years of age as well as co-morbid below 50 years, apart from the healthcare and other frontline workers that are being vaccinated.

One official in the vaccine industry, on condition of anonymity, estimated that the amount of 35,000 crore could be enough to procure around 150 crore doses if the average price of procurement were to be similar to Serum Institute’s Covishield and if the entire cost is borne by the government.

While 150 crore doses are enough to vaccinate roughly half of the country’s over 1 billion population, the estimates are bound to change, considering the pricing of various vaccines not known and the government has not yet provided any clarity on procurement, the official said.

“For now, it is difficult to say whether 35,000 crore is enough this year or more will be required. The requirements for vaccine doses and its funding will have to be reviewed based on whether the pandemic is in control in India or not, whether there is increase in the number of cases because of mutant strains, the availability of more vaccines and their volumes, and whether more vaccines would lead to fall in prices," K. Srinath Reddy, president of Public Health Foundation of India (PHFI), said.

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