[COVID-19 Vaccine] Differential pricing to incentivise pvt manufacturers to increase production, attract foreign players: Centre to Supreme Court

The rationale behind the new liberalised pricing policy for the COVID-19 vaccine is to ensure scaling up of vaccine coverage, incentivize vaccine manufacturers to rapidly scale up their production, and to attract new vaccine manufacturers, the Central government has told the Supreme Court. .As per the pricing policy, states and private hospitals are to procure vaccines from manufacturers at a different price higher than the price at which the Central government procures the vaccine. ."Differential pricing is based on the concept of creating an incentivised demand for the private vaccine manufacturers in order to instil a competitive market resulting in higher production of vaccines and market driven affordable prices for the same. This will also attract offshore vaccine manufacturers to enter the country. This will result in increased availability of vaccine," the Central government submitted. .The submissions were made in an affidavit filed by the government in the suo motu case initiated by the Supreme Court to examine issues relating to COVID-19 management in the country.During the hearing of the matter on April 30, the top court had questioned the government on vaccine pricing, remarking that vaccines which states have to procure are overpriced. "AstraZeneca is providing vaccines at far lower price to the US citizens then why should we be paying so much? Manufacturers are charging you Rs. 150 but Rs. 300 or 400 to States. Why should we as a nation pay this, the price difference becomes 30 to 40,000 crores?" the Court had asked..The Central government submitted that though it is for each state government to procure the vaccines, the Centre has, by conducting informal consultations with vaccine manufacturers, ensured that the prices of vaccines are uniform for all the states so as to avoid any disparity resulting from one state buying the vaccine at a higher price than the other..The government also contended that citizens between 18 to 44 years of age are also getting vaccination free of cost as all state governments have announced free vaccination for this population group. Thus, all citizens of all age groups will get free vaccination throughout the country, it was stated. .On the suggestion made by the Court to invoke compulsory licensing of provisions under the Patents Act to ensure availability of vaccines and drugs, the Centre said that main constraint currently is the availability of raw materials and essential inputs.Therefore, any additional permissions and licenses may not result in increased production immediately..In this regard, it was submitted that the government is making all efforts to enhance the availability of Remdesivir by ramping up production and sourcing through imports."However, in view of the current constraints on availability of raw materials and other essential inputs, mere addition of more production capacity may not lead to the desired outcomes of enhanced supplies. It is difficult to predict the trend of the pandemic and therefore difficult to forecast the demand for Remdesivir with a reasonable degree of certainty," the affidavit said. .Further, it was also stated that since this is a global problem and not merely restricted to India, any exercise of statutory powers either under the Patents Act 1970 read with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement and the Doha Declaration or in any other way can only prove to be counter-productive at this stage. It is also contended that the Central government is very actively engaging itself with global organisations at a diplomatic level to find out a solution in the best possible interest of India.."It is presumptuous to assume that the patent holder will not agree to more voluntary licenses for such manufacturers who have a new drug manufacturing permission from the DCGI. However, if such a manufacturer applies for a compulsory license under section 92, the same may be suitably considered by the DoC," the affidavit further said. .It was also pointed out that another COVID-19 vaccine, Sputnik V developed by Gamaleya institute Russia, and distributed in partnership with Dr. Reddy's laboratories, has received Emergency Use Authorization by the National Regulator in April 2021 and will be available now."Many other candidates are in the late stages of clinical trials and, therefore, expected to receive necessary approval that would further increase the availability of vaccine," it was further stated. .The policy, strategy and steps taken by the executive with regard to the COVID-19 vaccine and other aspects are based on expert medical and scientific advice and detailed deliberations at the highest executive level, it was contended. .In view of the above, the Central government said that though it is duty bound to fully assist the Supreme Court, no interference is called for by way of judicial proceedings . "In the context of a global pandemic, where the response and strategy of the nation is completely driven by expert medical and scientific opinion, there is even little room for judicial interference. Any overzealous, though well-meaning judicial intervention may lead to unforeseen and unintended consequences, in absence of any expert advice or administrative experience, leaving the doctors, scientists, experts and executive very little room to find innovative solutions on the go," the affidavit said. It should be left open for the executive to discharge its executive functions in larger interest, it added.