Bharat Biotech responds on $320 mn cancelled deal with Brazil; Yet to clarify on $45mn routed via Singapore firm

The controversies don't seem to end for Bharat Biotech's Covaxin. Even as the company still awaits approval from World Health Organisation to get into its Emergency Use List (EUL), here comes the newly nixed deal from Brazil.

Soon after, Brazil suspended the deal to purchase 20 million doses of Bharat Biotech's Covaxin over graft allegations, the company issued a statement categorically stating that as of June 29, it had not received any advance payment from the Brazil government.  

On Wednesday, the Hyderabad-based vaccine maker said in the statement: "In the case of procurement of Covaxin by Brazil, a step-by-step approach was followed towards contracts and regulatory approvals, during the 8-month long process. EUA was received on June 4. As of June 29, we haven't received any advance payments nor supplied vaccines to Brazil."

Pertaining to the pricing of Covaxin doses, the statement further said, "The pricing of Covaxin has been clearly established between $15-20 per dose for supplies to governments outside India." The pricing for Brazil has also been indicated at $15 per dose.

Why did the deal come off?   

Following strong allegations of irregularity, Brazilian President Jair Bolsonaro is trying to ignore the possible corruption in the deal by cancelling the contract. Brazil's Health Minister Marcelo Queiroga in a series of tweets, said, "By recommendation of@CGUonline we decided to temporarily suspend the Covaxin contract. According to CGU's preliminary analysis, there are no irregularities in the contract, but, due to compliance, @minsaude opted to suspend the contract for further analysis."

The probe that led to charges

The Brazilian Health Ministry had signed the contract with Bharat Biotech for 2 crore vaccine doses in February. The Covaxin-Brazil contract landed in controversial scrutiny after Brazilian Attorney General dug a little deeper into the deal.

The contract committed the Brazilian Health Ministries to pay $320 million at a cost of $15 per vaccine dose to Bharat Biotech's representative in Brazil. This price is above any price paid by Brazil to any other vaccine manufacturer, it was reported in the Associated Press, which also had access to a document by the prosecutor-general's press office.

Furthermore, chief of Brazilian Health Ministry's import division, Luis Ricardo Miranda, also testified before a Senate Committee that he faced pressure to give approval for the import of Covaxin and there were financial irregularities in the invoice documents. Particularly, a $45million upfront payment which was to be made to a Singapore-based company. President Bolsonaro has denied any knowledge of wrongdoing or possible corruption in the deal.

While it has issued an official statement, BBIL is yet to respond on why the payment had to be routed through a Singapore-based company. 

In troubled waters since the start

Within a month of the Ministry of Health and Family Welfare having to step in to clarify that Covaxin doesn't contain calf-serum and PETA urging DGCI to replace new-born calf serum method of vaccine production, comes the cancelled deal from a foreign government. 

India's home-grown vaccine Covaxin was approved for emergency use, amidst a lot of criticism on January 3 in the absence of Phase 3 trial data. Developed by Bharat-Biotech in partnership with National Institute of Virology and the ICMR, Covaxin is currently accepted in only about 11 countries.

Recently, BBIL also noted that they had submitted 90% documentation required for approval from WHO. The remaining was expected to be submitted in June. Covaxin's case is complicated by the fact that it is yet to conclude the Phase 3 trials for Covaxin and publish the data in a peer-reviewed scientific journal.