Specifically, within the context of Covid-19, the centrality of SII has been aided by several factors. On the international stage an important development was its early invitation into the Oxford University-based Vaccitech Ltd. consortium and its eventual position as an important sub-licensee to AstraZeneca. On the domestic front, on April 20, 2021, the SII received $400 million from the Indian central government’s vaccination budget to ramp up mass production of the Oxford-AstraZeneca vaccine. (Concurrently, Bharat Biotech received $200 million to ramp up production of the indigenously developed Covaxin). This funding, which amounts to 10% of the entire vaccine budget in 2021-22, was presented as an advance payment for vaccines that the SII was supposed to produce and supply in the next 2-3 months. Notably, this funding was advanced to SII and Bharat Biotech without a bank guarantee or collateral, as an exception to Rule 172 of the government’s General Financial Rules. Similar levels of non-transparency around the budget allocation for healthcare and the non-availability in the public domain of the contract between the Indian state and SII suggest mis- or dis-information circulating around the extent to which public monies are implicated in vaccine profits.
The Indian state’s approach to securing vaccines thus follows the classic (and global) incentive and subsidy approach for vaccine manufacturers: a demand guarantee and a price floor. In the name of mitigating risks for innovation, this approach has funneled public money into two private sectors, vaccine manufacturing and as we shall show now, through drug pricing into privatized health care.
Horse-racing, Speculation, Extraction, and Immiseration
Identifying the Global North-South divide as the central contradiction, and employing this identification as an argument against TRIPs, implies a certain diagnosis: in this story, the push for prolonged patent protection by states in the Global North fosters market monopoly, thus allowing drug companies to extract profits through marketing and pricing. Two major reasons are advanced against patent protection: firstly, the fact that lifting them does not affect the bottom line for big Pharma; and secondly, that corporations exaggerate the risks involved in vaccine production, since considerable public investment makes innovation possible in the first place. An argument against the patent regime is thus necessary, as Walden Bello has argued, for empowering developing countries.
But is patent protection the only thing standing in the way of people’s access to vaccination and healthcare? Vaccine geoeconomics is multifaceted. To probe this further, one needs to question the three imaginings of Poonawalla described in the introduction: the nationalist, the internationalist, and the broadly left-wing, which largely leave uncontested the claim that SII is manufacturing the “people’s vaccine.” This claim should be critically examined, since one of the most obvious markers of extraction is vaccine pricing.
The SII, which manufactures and distributes the Oxford-AstraZeneca vaccine under the name Covishield, is charging $2.03 per dose for the Indian central government, $4.06 per dose for Indian state governments, and $8.12 per dose for the Indian private market. Bharat Biotech, which distributes the domestically made Covaxin, is charging the same amount per dose for the central government and double for state governments and private hospitals. It is instructive to compare these prices to what the SII is charging other countries, as well as the price AstraZeneca is charging the European Union and the US. This is available from UNICEF data, shown in the accompanying table.
It is clear that the price being paid per dose by state governments in India to the SII far exceeds that being paid by the EU to AstraZeneca. The price for private hospitals in India is even higher and there have been suggestions that the Modi government will push the entire 18-45 year old population into the private vaccine market. Given that around 30% of the population is below 15 years old and hence ineligible for the vaccine, 65% are in the age group 15-64, and only 5% are older, one can roughly estimate that two-thirds of the vaccine-eligible population may finally be forced to buy the vaccine in the private market. (And this is a conservative estimate; the number might actually be higher, given that the median age is 27 years.) This gives a weighted price of the vaccine of around $6 per dose, or almost thrice that of the European Union. By the same calculation, Bharat Biotech’s vaccine comes to $12 per dose, or almost six times that of the European Union, albeit for a different vaccine. If one were to factor in the purchasing power parity, GDP per capita, or other obvious measures of disparity between India and the EU, the price differential becomes even starker. From the UNICEF data, it is clear that elsewhere – in Bangladesh, Sri Lanka, or the African Union – the pricing imposed by the SII is as steep or worse.
India’s working poor – the vast majority of the country – cannot afford the price tag for the two doses of Covishield or Covaxin. Given that the price of a Serum Institute vaccine is far beyond the reach of the vast majority of Indians, and much more expensive than those sold by the company to Europeans or Americans, it is clear that mass vaccination is not the priority of the Modi regime in India. The science is very explicit: unless the pandemic is controlled for a vast share of the population, it is going to continue. This two-tiered vaccination program, along with a largely digital vaccination registration drive and the deliberate miscalculation of the needs of the population, have thus served to create what can only be called a vaccine famine. India’s extensive domestic infrastructure for vaccine dissemination and history of public sector vaccine companies, when juxtaposed with its current failure to vaccinate people, raises alarming questions about the future. Indeed, the fact that these policies continue to be pursued in the face of the alarming death toll suggests there may be no future for many people to prepare for at all.
The business press has by and large defended SII and Bharat Biotech, stating that the profit is required to invest in new capacity and faulting the government for not investing early on. Comparisons to India’s successful vaccination against polio and pox have been called “specious” by the Hindu Business. The Economic Times claims that the Serum Institute’s $2 price per dose (the rate for the central government) “does not leave it with any surplus for investing in new capacity.” This can be contested on at least two grounds. Firstly, AstraZeneca is selling its vaccine at the same price to the European Union. Even if one accepts AstraZeneca’s contention that it is operating on a non-profit basis (a contention that has not been verified), it should be kept in mind, as we have seen, that the weighted average price for India actually comes to around $6.