Serum Institute seeks financial help from govt after India restricts exports

The world's largest vaccine maker has appealed to the Indian government for financial help after New Delhi restricted exports of its coronavirus jabs to battle a surge in cases at home.

Poorer countries around the world, as well as some rich nations, have relied heavily on the Serum Institute of India (SII) for supplies of the AstraZeneca vaccine but last month the government put the brakes on allowing it to export the shots.

Adar Poonawalla, SII's chief executive, told Indian broadcaster NDTV late Tuesday that since New Delhi pays it less per shot than it earns from exports, it needs ₹3,000 crore ($408 million) from the government to boost its currently "very stretched" production capacity.

"This was never budgeted or planned initially, because we were supposed to export and get the funding from export countries but now that that is not happening, we have to find other innovative ways to build our capacity," Poonawalla said.

"The globe needs this vaccine and we are prioritising the needs of India at the moment and we are still short of being able to supply... to every Indian that needs it," he said.

SII, which produces over two million doses of Covishield -- the local name for the AstraZeneca vaccine -- a day, is providing the jab at a subsidised rate of around 150 rupees to India, significantly less than what it charges for exports.

"The price that is set is profitable, however it is not profitable enough to re-invest substantially in building capacity," Poonawalla said.

US export ban

The company has also been sent a legal notice by AstraZeneca over the delays, which Poonawalla is trying to resolve "amicably", he told the Business Standard in a separate interview published on Wednesday.

"I don't think anybody would want to be in my position today where every head of state has to be explained that I am prioritising my country because there is a surge in cases," he told the paper.

A US ban on exporting raw materials for vaccines has added to the challenges, especially hitting SII's production of the Covid jab developed by US firm Novavax, he told the newspaper.

"From this month onwards, whatever we stockpile of Novavax would be half of what we could do, had it not been for US restrictions," he said.

"This is as good as banning vaccines."

SII — which recorded annual revenues of over $800 million in 2019-20 — has seen its profile soar since the pandemic, with several countries including Britain, Brazil and South Africa clamouring to buy its vaccine.

The firm has also struck a deal to supply 200 million doses to Covax, a World Health Organization-backed effort to procure and distribute inoculations to poor countries.

India began vaccinating people aged over 45 last week, aiming to inoculate 300 million people by August. So far it has administered around 87 million shots.

In hard-hit Maharashtra -- home to financial and film capital Mumbai -- vaccine shortages have already forced officials to turn people away, the state's health minister Rajesh Tope told reporters, warning that supplies would dry up in three days unless New Delhi replenished them soon.

India recorded over 100,000 cases in a single day for the first time on Monday, with Mumbai, Delhi and other cities imposing new curbs on movement and public gatherings in response to the spike.