The Central government has transferred the responsibility of vaccinating people in the 18-44 age group to the States , and opened up vaccine pricing to market forces, at a time when discussions around the world are about an intellectual property (IP) waiver for COVID-19 vaccines and providing free vaccines. In a conversation moderated by G. Ananthakrishnan , K. Sujatha Rao (former Union Health Secretary and author of the book Do We Care? India’s Health System ) and K.M. Gopakumar (Legal Adviser, Third World Network; works on the global intellectual property regime and its impact on developing countries) discuss India’s vaccination policy and its challenges. Edited excerpts:
The Central government has shifted responsibility for vaccination largely to the States. What is your view on the impact of the new policy?
K. Sujatha Rao: We need to vaccinate about 934 million people above 18 and within that, about 300 are above 45 years and 634 million are in the 18-44 age bracket. We need about 1.8 billion doses. Right now, the production is 60 million doses per month. And about 350 million are yet to be vaccinated in the above-45 age group. The Indian government is committed to providing vaccines to those above 45 and needs about 600 million doses against which it has provided about 100 million. So, at this rate, it will take very long, even if it earmarks 30 million doses per month.
The two companies [Serum Institute of India (SII) and Bharat Biotech (BB)] are saying they can produce, from July, 112 million doses or 115 million doses per month. Even then it will take the Government of India almost 6-8 months to cover the target group. Its focus on the target group has an epidemiological basis, as opposed to the current demand that it should also include those aged 18 to 45. But there is a need for that urgency also, mainly because 45% of deaths are in this age group (20-50 years).
What the government is trying to do is keep the vaccines at market prices. These prices are quite high. The State governments may not be able to afford to supply the vaccines free or only the richer sections among this age group, who can afford the prices, will be able to get vaccinated. It is some kind of market segmentation and fragmentation that the government is trying to do in order to get supply and demand to sync at some level.
K.M. Gopakumar: The important objective in the policy is to accelerate vaccination but the way in which the new policy is designed, we may not achieve that, precisely because it fragments the market. This is now divided into three categories at differential pricing. This is going to hamper bulk procurement and affordability. Earlier, there was only one procuring agency, the Central government. Now you have States which will compete with private hospitals to procure vaccines. All this will have implications for accelerating the vaccination target.
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From a public health approach, how does the present campaign compare with polio and others?
K. Sujatha Rao: I think the government has not thought through this policy. It did not think about supply and kept on setting targets for free vaccination. The eligibility criteria has been increasing steadily. That is good, but it did not keep an eye on supply. It did not expect the second wave [of the pandemic]. The anxiety of this wave has triggered a huge demand for vaccines, and in the lull period from October to March, when the pandemic seemed to be petering out, there was a sense of comfort. There was vaccine hesitancy not only due to confusion on the nature of the vaccines, but also [the view] that the pandemic is on its way out.
Given vaccine hesitancy, the government was cautious. It did not make advance purchase agreements or stockpile vaccines. It thought these two indigenous companies would be adequate to cover everyone by the end of the year. Since it did not expect a second wave, the window was lost for sorting out supply, giving the capital investment required by these companies to expand their production, ensuring that other companies got this know-how and also began production, having advance agreements with imported vaccine manufacturers, and so on.
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Did we confine ourselves to too few vaccines?
K. Sujatha Rao: Yes. Pfizer did offer to enter the market in February, but it was asked to do a bridging study, which has now been relaxed. Pfizer was not willing to do that. You see, it never really cares for the Indian market. Whatever it was producing was being bought at a huge price in the western market, at $20 a shot. Pfizer knows that its vaccine is affordable only to a small segment of the Indian population. But India could have tied up with the company nevertheless. We had many other policy options, which we did not explore because we thought these two companies would be adequate.
There is a lot of discussion on public-funded vaccine research. One recent report says the AstraZeneca vaccine is 97% public-funded. Do you have any comment on how this has been commercialised?
K.M. Gopakumar: During the TRIPS and access to medicines debate in the early 2000s, we were told that the main justification for IP protection is that it is a mechanism to recoup the investment in research and development (R&D). If there is public investment in R&D, you can separate that from the price of the product. That way you can make the innovation happen as well as ensure access. In the case of COVID-19, as per one calculation, $93 billion was spent by various governments for vaccine research. Moderna is 100% publicly funded, AstraZeneca, 97%, and for Pfizer, though it denies it receives public funding, BioNTech got huge public funding from the German government. Pfizer also got around $2 billion as advance market commitment. All these companies received public funding. After this, there is a complete de-risking of R&D as well as manufacturing, but now they are not ready to give up their monopoly, preventing the scaling-up of production. These companies are not in a position to meet the global demand, but are not ready to share the technology. The developed countries are preventing it. We too have taken a lesson. SII, which has received the technology free of cost from AstraZeneca, and funding from the Bill and Melinda Gates Foundation to expand manufacturing capability, is now indulging in differential pricing, charging a huge amount disproportionate to its expenditure or investment. The problem is monopoly and profit, not the idea of recovering R&D expenditure. We need to treat vaccines as a public good because there has been a huge spending of public funds.
Is there any precedent for States being asked to acquire their own vaccines?
K. Sujatha Rao: No, never. The government has had the universal immunisation programme starting from the 1960s. This became a global priority from 1991-92 with the World Health Organization (WHO) piloting it, particularly with the entry of the polio pulse programme. When you do central procurement as a single buyer, you have the advantage of market power and you can beat down the prices. Hepatitis B used to cost ₹750 per dose in the open market, and when the Government of India entered [the scene], it came down to less than ₹200 and crashed further to less than ₹100. When you fragment the market and allow pharma companies to set the price, you are giving away all your advantages to them to make super profits.
In this context, the Central government has a constitutional obligation to stop the inter-State transfer of infectious diseases, under the Concurrent List. The State governments are no doubt responsible for public health. That is why they are running around for oxygen, beds, doctors. Right from the beginning, the Central government, has had national programmes to combat all infectious diseases, and has supplied vaccines, drugs and consumables at very low prices because of market power. The State governments implement the programme. Why is the Centre giving up that advantage today?
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Economists have said IPs were never intended for pandemics. What avenues do people have to use laws and conventions to get vaccines?
K.M. Gopakumar: There are two types of IP rights that are used to control competition — patents and trade secrets. As far as patents are concerned, the government can issue a compulsory licence and ensure freedom of operation for any potential manufacturer. But there is a regulatory system that acts as an enforcement agency for protection of trade secrets. As a result, even if you have a compulsory licence, it would be difficult for a non-originator company to produce a vaccine very quickly. If you produce a small molecule, the regulatory agency (RA) never looks at what kind of manufacturing process is followed to produce a generic version, like paracetamol. What it looks for is whether it is paracetamol or not and the company gets marketing approval.
In the case of vaccines, the RA insists that the non-originator company follows the process of the originator. But this process is not in the public domain and is kept a trade secret. We don’t have a compulsory licence to reveal that information to the potential non-originator company. The only agency which can do such sharing with the potential manufacturer is the RA. But it treats the dossier submitted by the original manufacturer as a trade secret. India and South Africa approached the World Trade Organization (WTO), asking that they be given the right to waive the protection and enforcement of certain IPs in the case of COVID-19 medical products. That waiver, if adopted, can be used by the regulatory agencies to share the dossiers with potential manufacturers to speed up the process. So, potential manufacturers in India, China or Brazil have the technological capability without the help of the originator, but the regulatory framework insists that replication requires them to prove clinical safety and efficacy, which are time consuming. We need to take two-pronged action. The RAs need to waive clinical trials by developing an accelerated pathway for the non-originator company, and the national RA should share the dossier with the potential manufacturer.
K. Sujatha Rao: Even during H1N1, though the [move] had come from Indonesia and WHO was trying to make the process universally available, Pfizer still had control and was not willing to share, and there was some kind of problem in technology transfer. But if the U.S. supports India and South Africa, there are ways to make this a public good. Right now the inequity is unjustifiable. There is now a clamour for distribution of vaccines equitably. Though GAVI set up a mechanism under COVAX, India became the biggest supplier.
In India we have Covaxin, produced by BB, where the Indian Council of Medical Research (ICMR) has been a knowledge partner. I don’t know who holds the patent here. I suspect ICMR must be a joint patent holder, and it should be able to leverage that advantage. We have about 20 manufacturing companies and depending on the state of technology and readiness, ramping up production of Covaxin can be done. If BB is saying we have incurred an expenditure of ₹350 crore, some compensation can be given to the company, and since ICMR is a partner, they should be able to make it available to other companies to quickly scale-up the manufacture. There is a lot of scope available if the Centre is genuinely interested in ensuring universal vaccination in the least possible time.
K.M. Gopakumar: I agree. What is happening now is a duopoly. We need to introduce competition by allowing more companies to come in. These two companies cannot meet the demand. Therefore, it is important to allow more companies to produce vaccines. The government has announced that it has reached some arrangement with the three public sector units to produce BB’s vaccine. But that’s not enough. There are companies with huge capabilities, especially in the private sector, and the government should step in and allow much more open licensing of BB’s vaccine because this vaccine is a domestically developed vaccine and the government also has a stake in it. Nobody is saying they should not be compensated with a fair compensation. This technology should be shared in a fair and equitable manner to scale up production. And we should stop this vaccine duopoly.
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Further, there are around seven companies that obtained contract manufacturing license from Sputnik [Russian vaccine] for production. I think this production should also be facilitated at the earliest. Of course, again, there is the regulatory burden of carrying out bridging studies and so on. But there are seven companies, and the regulatory agencies should speed up the requirements and facilitate production at the earliest.
In the WHO process, there are several vaccines submitted. And there might be developers who don't want royalty and are ready to open source it. Should the Central government be open to receiving those?
K.M. Gopakumar: The WHO system of pre-qualification in the days of the pandemic is called emergency use listing. These are very cumbersome procedures and take time. Till now, only three vaccines have been pre-qualified. Only companies with certain technological and financial capabilities can meet that requirement, but the need of the hour is to produce at the earliest. Countries are entering into bilateral contracts to buy these vaccines from various countries wherever they are available. So, I think India’s regulatory agencies and Indian companies are capable of producing a quality vaccine. It will not be a problem for them to produce and even sell to countries at an affordable price for the global vaccination programme, because a part of the population is globally left without access to vaccine.
K. Sujatha Rao: WHO may have some candidate vaccines. But there’s no harmonisation of regulatory mechanisms. Right now, when the Government of India has liberalised and said even foreign vaccines can come provided they have FDA [Food and Drug Administration] approval, these vaccines that the WHO is certifying will need to have some kind of stringent regulator clearing it. The WHO’s own pre-authorisation processes are time-consuming; they won’t be able to clear them in the conventional sense. In such a situation, even after some quick trials are done and they certify that this is good, safe and efficacious, the Government of India, in the absence of any other regulator, may ask for bridging trials to be done. But I personally feel that we should be as open as possible. And as long as efficacy and safety are ensured, we should go for it. Because really, we’re only looking at domestic demand. You forget that we also have an obligation to provide these vaccines to COVAX. That is a responsibility that we cannot renege on. SII has already taken an advance of $300 million from GAVI and Gates Foundation, to supply 200 million vaccines at $3 each. Already a legal notice has been sent by AstraZeneca. So it’s a very, very tight situation today. And to get out of this mess that we’re seeing, we have to talk about 70% of our population being vaccinated. That’s the only way out.
Should the present vaccine pricing policy be reviewed?
K. Sujatha Rao: There’s no justification whatsoever for the kind of prices that both Adar Poonawalla and Dr. Krishna Ella have given. Mr. Poonawalla says he needs the super profits to reinvest again. We have to remember that he’s got gap funding from WHO for stimulating his vaccine production capability. Where has he used it? We don’t know. Plus, the Government of India is giving him ₹3,000 crore. Again, we don’t know when he will put that into action. And with all this money he is only promising a doubling of 50 million doses to 100 million doses in the next two months. So really, he has enough money. And where Dr. Ella is concerned, if he says we got preferential treatment in getting all the raw materials and everything from National Institute of Virology, Pune, ICMR kicked in... His phase three trials would never have been possible but for ICMR backing him in such a short time. Both these companies were given huge relaxations of emergency authorisation, even without full submission of data. So, to begin with, they have to get a full license now that three months are over since they got emergency authorisation. What have they spent the money on for them to be wanting more money? There is an element of greed and I feel sorry because this is not the moment when these companies should be thinking of profiteering.
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This is the CIPLA moment. This is as bad as it was in 2000 when multinational companies were charging $12,000 for HIV drugs and millions were dying for want of treatment. And that was the moment when CIPLA came forward and produced drugs for $300. That action was so disruptive, that the market just crashed and India was able to finally produce these drugs for less than $100-$140 per head, which saved millions of lives were saved.
K.M. Gopakumar: Yeah, it is unfortunate that Indian companies like SII and BB are speaking the same language of big companies. Reinvestment, recouping of investment, etc. is the language which we have been hearing from Big Pharma.
K.M. Gopakumar is Legal Adviser, Third World Network. He works on the global intellectual property regime and its impact on developing countries; K. Sujatha Rao, former Union Health Secretary, is the author of the book Do We Care? India’s Health System
