Noting that the Center had financed and facilitated vaccine production through concessions or otherwise, the Supreme Court sought clarification on whether it would be correct to state that private entities bore the risk alone and the cost of manufacture.
He noted that since the emergency use authorization had been granted by the Center to manufacturers, thereby minimizing their risk, he should have taken the price into account.
The Court also requested a comparison between the prices of vaccines made available in India and their prices internationally.
Justices DY Chandrachud, L. Nageswara Rao and S. Ravindra Bhat, in their May 31 order in the Suo Moto COVID case, said they welcomed the cooperative efforts of the Union of India and private manufacturers in the vaccine development and distribution. that were essential to mitigate the pandemic.
Noting that the scope of their questioning was to facilitate a better understanding of the vaccine production development process as well as its pricing for States / UTs and private hospitals, the Chamber asked the Center to provide the following details:
“1. Since the central government funded (officially, Rs 35 crore to BBIL and Rs 11 crore to SII for phase 3 clinical trials) and facilitated the production (or increased production) of these vaccines through concessions or otherwise, it may not be correct to assert that private entities bore the risk and cost of manufacturing alone. In addition, the central government is said to have minimized risks for manufacturers by granting emergency use authorization for vaccines, which should be factored into its pricing.
2. How public funding is reflected in the purchase price for central government, which is significantly lower than the price for state governments / UTs and private hospitals. Since the R&D and IP costs were either shared between the central government and the private manufacturer (in the case of Covaxin) or the manufacturer did not invest in the R&D of the vaccine (in the case of Covishield) , the way in which the pricing of vaccines was reached, the central government refusing to intervene statutorily. The justification for intervening by prefixing the prices and purchase quantities for States / UTs and private hospitals, but without imposing regulatory price ceilings.
3. Comparison between the prices of vaccines made available in India and their prices internationally.
4. Has ICMR / BBIL formally invited voluntary licensing contracts and, if so, whether they have received any viable offers. The way the UoI independently tries to help manufacturers develop BSL3 labs which are essential for the production of Covaxin. “
The clarification was requested in response to the central government’s submissions in its affidavit of May 9, 2021 in which it indicated that Serum Institute of India and Bharat Biotech had taken a financial risk in the development and manufacture of vaccines, Covishield and Covaxin.
The affidavit states that “no government aid, assistance or subsidy is given for research or development of Covaxin or Covishield. However, they have received financial assistance for the conduct of clinical trials.” While the ICMR’s total estimated expenditure for Covaxin is 35 crore, for Covishield it is 11 crore.
The decree of April 30, 2021 had ordered the Center to submit data on financing and support, direct or indirect, for vaccines whose public use had been authorized. In addition, the Centre’s position on compulsory licensing was also researched in order to assess vaccine shortage bottlenecks.