October 10, 2021

Patents and Price of Covid Vaccines

J S Majumdar

THE corporate media also had to note the beating that PM Modi’s and BJP’s image got due to failure in management/mismanagement of Covid-19 pandemic; bringing in stark reality the absence of public healthcare infrastructure both in urban and rural India; lack of equipment, oxygen and medicines and healthcare personnel; and lakhs of counted and uncounted deaths as aptly penned by ParulKhakkar in Shab-Bahini Ganga and the king becoming ‘Nanga’.

Realising this opposite under-current prior to four states assembly elections coming within few months, BJP launched a high profile campaign to refurbish Modi’s, and its own images by observing the 71st birthday of Narendra Modi by distributing 14 crore bags with Modi’s picture highlighting meagre ration distribution; five crore ‘thank you’ postcards sending to PM by booth-level mobilisation of the people; videos on ‘thank you Modiji’ for vaccination etc., as measures taken by the BJP government to combat the serious adverse effect of Covid-19 pandemic on the lives and livelihood of the people.


Covid-19 is the disease of the century invading all countries across the world; India is one of the worst-affected nations. How long it and its mutants will continue to live with human beings that nobody knows. Mass vaccination is the most important defence against Covid.

But there is already world disparity in respect of production and availability of Covid vaccine due to high cost-plus patent royalties. In World Health Assembly in May 2021 in Geneva, EU countries promised to share more vaccine doses with low- and middle-income countries. Yet, as per UNICEF data, out of the total doses administered in the world up to March 30, 2021, 86 per cent was upper- and middle-income group countries; and only one per cent in the world’s poorest countries. Nature journal reported so far in Africa one dose / per person is only two per cent of Africa’s 1.2 billion people. This is because, among other factors, that they have to import 99 per cent of its vaccines at a high cost. On the other side, there is hoarding of Covid vaccines by the rich countries.


This has also brought patent issues to the fore. In October 2020, India and South Africa submitted a proposal at WTO to wave intellectual property rights (IPR) or patents for Covid vaccines. Biden administration in the USA also backed the proposal and 100 plus countries, WHO and UNAIDS supported it.  

Big pharma companies fiercely opposed the move. They were fully supported by EU countries on the ground that suspending IPR will remove the incentive for drug companies to innovate.

This is also a false claim. Most of the vaccines’ research and technology are public-funded. At least 97 per cent of research into the AstraZeneca-Oxford vaccine – Covishield – has been funded with public money. Moderna, Janssen and BioNTech all received governments’ funding.

US drug MNC Pfizer claims that it opted not to take federal funds offered by the Trump administration under ‘Operation Warp Speed’. But, its Covid vaccine technology partner BioNTech received substantial funding from the German government. The National Institutes of Health (NIH) patented technology that helped make Pfizer’s and Moderna’s so-called mRNA vaccines possible. BioNTech has a licensing agreement with the NIH and Pfizer is piggybacking on that license.

Using patents, the drug monopolies the world over are making Covid pandemic a huge profit-making business. On May 4, 2021, Pfizer announced that the vaccine brought in $3.5 billion in revenue in the first three months of this year, nearly a quarter of its total revenue. The vaccine production was the largest source of revenue, roughly $900 million in pretax vaccine profits in the first quarter.


Since independence, mass vaccination like smallpox, polio, rabies, measles, Japanese Encephalitis etc., were never commercialised by the government. For the first time, the Covid-19 vaccine is being commercialised by the Modi government. Not only that, but it is also protecting patents on Covid vaccines.

Modi government left the production of Covid vaccine entirely to the private companies for profit despite re-opening of public sector closed vaccine firms like - Central Research Institute, Kasauli; the Pasteur Institute of India, Coonoor; and the BCG Vaccines Lab, Chennai – as per Supreme Court’s order in 2012. There are other suspended PSU vaccine plants like HLL Biotech in Tamil Nadu; Bharat Immunologicals and Biologicals Corporation Limited, Uttar Pradesh; Haffkine Bio-Pharmaceutical Corporation Limited, Maharashtra; and Human Biologicals Institute, Telangana. When the country’s entire population has to be vaccinated, these PSUs are kept idle.

And, the worst is a Rs 904 crore state-of-the-art Integrated Vaccine Complex based in Chengalpattu has also been lying idle since its inauguration in 2016. In 2012, the central government took the decision for the integrated vaccine complex for which over 100 acres of land in Chengalpattu in Tamil Nadu was acquired to be the nodal centre for manufacturing, research and supply of vaccines at affordable prices under the universal immunisationprogramme of the government of India with a total capacity of 585 million doses.HLL Biotech Limited (HBL), a subsidiary of the central government-run HLL Lifecare, was entrusted with constructing the IVC to produce life-saving and cost-effective vaccines, primarily to minimise the demand-supply gap. The cost of setting up the IVC was estimated to be Rs 600 crore. But the union health minister finally stated that it was Rs 904 crore in 2019. While the centre approved the cost escalation in 2017, it did not approve the project escalation to Rs 904 crore in 2019, expressing concerns about its “non-profitability”!


Under India’s inoculation programme, which began on January 16, 2021, the country has been using two vaccines – Serum Institute’s Covishield and Bharat Biotech’s Covaxin. Despite having deactivated Covid vaccine technology by central government’s institute like Indian Council of Medical Research (ICMR) and National Institute of Virology (NIV), under ICMR; Modi government kept all the above PSUs idle, hired the private sector crony Bharat Biotech of Hyderabad and handed over ICMR-NIV Covid vaccine technology and asked them to produce ‘Covaxin’ for business and profit.

The patent on Covaxin is being shared between the drug manufacturer Bharat Biotech and the ICMR both entities gaining the royalty payments. The MoU between the ICMR and the BBIL (Bharat Biotech International Limited) includes a royalty clause for the ICMR on net sales and other clauses like prioritisation of in-country supplies, said the ICMR director-general.

The Serum Institute of India (SII) has been producing Covishield under license from Swedish-British multinational drug major AstraZeneca and supplying it for mass vaccination in India at a very high price and sending patent royalties to AstraZeneca. Raising the patent removal issue at an international forum, the government of India is meekly paying patent royalty to AstraZeneca through SII. 

As per the commercialisation of the vaccine plan of the Modi government, effective from May 1, 2021, the SII announced that the Covishield would be sold to states at Rs 400 per shot and at Rs 600 per dose to private hospitals; and Bharat Biotech set the price of Covaxin at Rs 600 per jab for state governments and Rs 1,200 for private hospitals. Both vaccines would be priced at Rs 150 per dose for the central government.

Since May 30, 2021 order of the Supreme Court for free vaccination of all adults both the companies are supplying their patented vaccines to the central government at a cost of Rs 150 per dose. The government estimated Rs 50,000 crore for Covid vaccination.

Now, Pfizer and the Indian government have resumed talks. The company said that it would donate more than $70 million worth of medicine to India and is trying to fast-track its patented vaccine’s authorisation.