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Bharat Biotech on Tuesday defended the higher pricing of its covid-19 vaccine Covaxin in private hospitals compared to other vaccines, saying the price is aimed at recouping costs and that private procurement of doses is discretionary when the government is providing shots free of charge.

The statement comes amid criticism over Covaxin being priced at 1,200 per dose in private hospitals. The criticism was especially directed at Bharat Biotech chairman and managing director Krishna Ella, who had in August 2020 claimed that the vaccine will be sold for less than a bottle of water.

“Unlike most medicines and therapeutics, vaccines are provided free of cost by the government of India to all eligible Indian citizens. Thus, the procurement of vaccines by private hospitals is optional and not mandatory, though it gives a choice to citizens who are willing to pay for more convenience," the company said. The firm has priced its indigenously developed covid-19 vaccine at 150 per dose, while private hospitals are charged 1,200 for securing a dose. States are being asked to pay around 400 per dose, but this will be done away with when the Centre’s revised policy of procuring 75% of total doses on behalf of itself and the states comes into effect on Monday.

The Hyderabad-based firm said that it should be allowed to charge higher prices for the remaining 25%, which will be procured by private hospitals and argued that supplying 75% of its vaccines at 150 per dose is not sustainable in the long term. It said that the firm has invested over 500 crore from its own resources for product development, clinical trials, and setting up of manufacturing facilities for Covaxin, and also has to pay royalties to the Indian Council of Medical Research and Pune’s National Institute of Virology, both Centre-run institutes, as they provided support to the firm during product development.

Bharat Biotech also has to pay royalties to US-based firm Virovax for use of the adjuvant, a chemical used to boost immune response, it developed for the vaccine. Not allowing dual pricing for the vaccine may hinder innovation in India, the firm said. “It may well be argued that the low-price realization for home-grown innovators constrains innovation and product development in India. In the absence of a dual pricing system, Indian vaccine and pharmaceutical companies risk being reduced to mere contract manufacturers with intellectual property licensed from other nations," Bharat Biotech said.

The statement comes at a time when India is facing an acute shortage of vaccines, especially as the government announced the opening up of vaccination to all citizens of age 18 years and above, which is more than 900 million people. Since then, the shortage has become more acute as the supply has not been able to match the ballooning demand.

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