Supreme Court Seeks Comparison Between Indian & International Prices Of COVID Vaccines

Noting that the Centre had financed and facilitated the production of vaccines through concessions or otherwise, the Supreme Court sought clarification on whether it would be accurate to state that private entities had alone borne the risk and cost of manufacture.

It noted that as Emergency Use Authorisation had been granted by the Centre to the manufacturers thereby minimizing their risk, it should have factored in the pricing.

The Court has also sought for a comparison between the prices of the vaccines being made available in India, to their prices internationally.

A Bench of Justices DY Chandrachud, L. Nageswara Rao and S. Ravindra Bhat, in their 31st May order in the Suo Moto COVID case, stated that they commended the cooperative efforts of the Union of India and the private manufacturers in developing and distributing vaccines which were critical to mitigate the pandemic.

Remarking that the import of their line of questioning was to facilitate a better understanding of the process of development of vaccine production as well as its pricing for States/UTs and private hospitals, the Bench directed the Centre to provide the following clarifications:

"1. Since the Central Government has financed (officially, Rs 35 crores to BBIL and Rs 11 crore to SII for phase 3 clinical trials) and facilitated the production (or augmentation of production) of these vaccines through concessions or otherwise, it may not be accurate to state that the private entities have alone borne the risk and cost of manufacture. Additionally, the Central Government would have minimized the risks of the manufacturers by granting Emergency Use Authorization to the vaccines, which should factor into its pricing.

2. The manner in which public financing is reflected in the procurement price for the Central Government, which is significantly lower than price for the State/UT Governments and private hospitals. Given that the R&D cost and IP have either been shared between the Central Government and the private manufacturer (in case of Covaxin) or the manufacturer has not invested in R&D of the vaccine (in case of Covishield), the manner in which the pricing of vaccines has been arrived at, with the Central Government refusing to intervene statutorily. The justification for intervening in pre-fixing procurement prices and quantities for States/UTs and private hospitals, but not imposing statutory price ceilings.

3. Comparison between the prices of vaccines being made available in India, to their prices internationally.

4. Whether ICMR/BBIL formally invited contracts for voluntary licensing and if so, whether they have they received viable offers. The manner in which the UoI is independently trying to assist manufacturers for developing BSL3 labs which are essential for Covaxin production."

The clarification was sought in response to the Central Government's submissions in its 9th May, 2021 affidavit wherein it had submitted that Serum Institute of India and Bharat Biotech had taken a financial risk in developing and manufacturing of the vaccines, Covishield and Covaxin.

The Affidavit avers that "no governmental aid, assistance or grant is made either for research or development of either Covaxin or Covishield. However, they were given some financial assistance for conducting clinical trials". While the total estimated expenditure of ICMR for Covaxin is 35 crores, for Covishield, it is 11 crores.

The 30th April 2021 order had directed the Centre to submit data on funding and support, direct or indirect, into the vaccines that had been authorized for public use. Further, the Centre's stance on compulsory licensing was also sought for in order to evaluate bottlenecks in vaccine scarcity.