Serum’s supply to COVAX hit by India’s poor vaccination planning

While India approved Rs.3,000 crore in funding to Serum to meet the cost of ramping up production capacity only on April 19, 2021, Serum had received $300 million funding in August and September 2020 from the Gates Foundation to supply 200 million doses by first half of 2021. But only a paltry 19.8 million doses have been supplied to COVAX and delivery of remaining supplies may begin only by end 2021.

On August 15, 2020, Prime Minister Narendra Modi said three COVID-19 vaccines are in different stages of testing and that India is “ready with a plan for production” and has a roadmap ready to distribute the vaccines to “every Indian in the least amount of time”. The Indian regulatory agency granted restricted use approval to Covishield and Covaxin on January 2 and January 3, 2021 respectively.

On August 7, a week before Mr. Modi’s announcement, the Pune-based Serum Institute signed an agreement with GAVI and Gates Foundation to manufacture and deliver up to 100 million doses of COVID-19 vaccines for low- and middle-income countries as early as the first half of 2021. The supply was meant to be made to the COVAX facility.

On September 29, 2020, Serum Institute pledged to manufacture and deliver an additional 100 million doses, bringing the total number of doses to be delivered to the COVAX facility to 200 million, with an option to produce more.

To ensure assured supply of 200 million vaccine doses, the Gates Foundation provided $300 million of “at-risk funding” to Serum Institute. This came in two tranches of $150 million when supply of 100 million doses was sealed on August 7, 2020 and then an additional $150 million funding in September 29, 2020 when Serum agreed to supply 100 million more doses to the collaboration.

As per data shared by the government, Serum has exported 66.2 million doses to 95 countries as on April 21. Of these, only a paltry 19.8 million doses were supplied to COVAX. And India gave away 10.7 million doses to 48 countries as a grant, while Serum sold 35.7 million doses to other countries as part of commercial contracts.

But with the second wave raging across the country, India has stopped Serum from exporting vaccines either to the COVAX facility or to individual countries as part of the bilateral agreements already signed by Serum. The government has instead directed the company to make the vaccines available to Indians on priority. But the government has not explicitly said it has banned exports.

On April 2, Ministry of External Affairs Spokesperson Arindam Bagchi clarified on the export ban issue. “Till now, we have supplied vaccines to more than 80 countries across the world and we have already stated that our external supplies would be done keeping in mind our domestic requirements,” Mr. Bagchi said. He then added: “At this time, I hope our partners understand that vaccines are primarily purposed for domestic consumption. I want to emphasise that we have not imposed any export ban on vaccines.”

But contrary to the claims made by the government, on May 11, Serum was stopped from exporting five million doses to the U.K. despite an agreement with AstraZeneca in this regard. These doses were to be used for vaccinating adults aged 18-44 years in India.

Even on February 21, just days after cases started surging in Maharashtra, Serum gave the first indication that it would not be able to meet its global commitment of supplying 200 million doses to the COVAX facility by the first half of 2021. Adar Poonawalla, CEO of Serum tweeted: “Dear countries & governments, as you await Covishield supplies, I humbly request you to please be patient, Serum Institute has been directed to prioritise the huge needs of India and along with that balance the needs of the rest of the world. We are trying our best.”

On April 7, Mr. Poonawalla was optimistic of resuming exports by June if the second wave waned quickly. But with the second wave appearing to have peaked just a few days ago, at least in a few States, Serum is going to miss the June target date too.

Going by a statement released on May 18, Mr. Poonawalla has been forced to shift the goalpost for exports once again. “We continue to scale up manufacturing and prioritise India. We also hope to start delivering to COVAX and other countries by the end of this year,” he said.

While the U.S. provided billions of dollars in funding to each vaccine manufacturer right in the beginning of vaccine development and testing and is now ensuring that it has enough vaccines to immunise 70% of adults by July 4, India provided funding only in April this year.

Only on April 19 did the government approve Rs.3,000 crore in funding to Serum and Rs.1,500 crore to Bharat Biotech to meet the cost of ramping up production capacity. This funding comes nearly seven-eight months after Serum received $300 million funding from the Gates Foundation.

Not only did India fail to place firm orders with the two companies well in advance, but also did not provide the companies any funding till a month ago to expand the manufacturing capacities. What it has instead done is to appropriate for its use the vaccine doses which were already paid for by other entities and were meant for other countries under COVAX facility and bilateral agreements.

Despite appropriating all the vaccine doses manufactured by Serum, India is facing huge vaccine shortages and so the vaccination drive has been slow and the rate of immunisation steadily dropping; on May 20, only 1.4 million were vaccinated. 

As on May 20, India has vaccinated over 190 million adults; only 40-odd million have received both doses. The three priority groups of healthcare workers, frontline workers, and those older than 45 years alone account for 300 million people. This would mean 600 million doses to cover the three priority groups by July.

With a capacity to manufacture only 60-65 million doses per month by Serum and about 10 million per month by Bharat Biotech, completion of a large-scale expansion of production capacities months ago was essential if all the 300 million were to be vaccinated by July. And with nearly 600 million more adults aged 18-44 now eligible for a vaccine, and any expansion of capacity likely to take a couple of more months, it is not sure when Serum will ever be able to meet its obligation towards COVAX and bilateral agreements with other countries.

Published in The Hindu on May 22, 2021

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