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Where did the govt’s Rs 900 crore R&D grant for COVID vaccine development go?

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covid 19 vaccine developmentcovid 19 vaccine developmentVaccine development cost estimates vary depending on who one is talking to. (Representational image: Reuters)

It has been five months since the government allotted Rs 900 crore research and development grant for COVID vaccine development. Where has it all gone and what has come of it? These questions become important at a time when the viral caseload is high, past the 1.5 lakh new cases a day, and concerns continue over the pace of the vaccination drive and on the need to redefine the eligibility criteria to include all.

All of this is despite India standing out globally as an important hub for COVID-19 vaccine-making. Today, almost all the possible technology platforms deployed globally are also being worked upon in India and it is not as if factories are to be found to make them. There are at least half a dozen leading Indian vaccine makers in different stages of vaccine development.

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So, how has the R&D grant made a difference? On November 12th, exactly five months ago, Union finance minister Nirmala Sitaraman, while announcing the third economic stimulus package stated that Rs 900 crore was being provided to the Department of Biotechnology for COVID Suraksha Mission for research and development for Indian COVID vaccine development.

Financial Express Online reached out to Dr Renu Swarup, secretary, department of Biotechnology, ministry of science and technology, who is incidentally also the chairperson of the Biotechnology Industry Research Assistance Council.

Given her incredibly busy schedule, we approached her with a couple of basic questions on how much of the Rs 900 crore had been disbursed and for what projects? We also asked her about the role that the grant money was playing in backing research for new vaccine candidates, including those to combat the variants.

The response emailed to Financial Express Online says that out of the total of Rs 900 crore, “an amount of Rs 500 crore has already been committed.” Further, “to scale up vaccine production, support is being considered for private and public sector manufacturing facilities to make them ready for enhanced capacities to support augmented vaccine production over the next 6-8 months.”

Not just vaccine candidates

On the specific projects for which the funds were disbursed: “Five vaccine candidates in advanced clinical development stage are being supported under this mission. Additionally, 19 clinical trial sites across the nation, three immunogenicity assay laboratories, and three animal challenge facilities are also being supported under the mission.” Apparently, the grant is not for vaccine candidates alone but for supporting the whole paraphernalia around vaccine development. Vaccines are typically grown inside cells and these are cultured. The production starts small and subsequently manufactured at scale. In fact, one of the beneficiaries, like possibly a few others, is a leading Indian vaccine maker, who did not wish to be named but had already received a fraction of its total ask but then promised more depending on the research milestones the company is able to reach.

How the grant disbursement is broken up between the government and private sector is not clear. The goals seem laudable and the missions critical but talk to those in the industry and while most hail it all as good intent, not many seem to see it as one that can materially impact. “It is a good start but still a drop in the ocean,” says one industry leader without wanting to be identified and asks: “If this was enough then why are existing vaccine makers like Serum Institute and Bharat Biotech out seeking huge grants? The ask from Serum alone is Rs 3,000 crore.”

But then, costing and vaccine procurement is a bit of a fuzzy territory. With little transparency from the government on its exact procurement plans from companies, its far from satisfactory disclosures on the approvals process, lack of clarity on the pricing methodology for vaccines that are getting approved – for instance, there is still a question mark on what will be the price for the Sputnik V vaccine – it is the private sector estimates of costs and prices that are only being discussed and remunerative nature or the lack of it, labelled on vaccine manufacturing.

The industry, with options shut now to export and their inability to directly sell in the open domestic market and having the government as the sole buyer, is busy putting out a case for ensuring built-in viability. This is despite most talking the language of wanting to address a humanitarian need than being driven by attempts at profitability.

Case for a bigger kitty

Vaccine development cost estimates vary depending on who one is talking to. Talk to vaccine makers and estimates run as high as Rs 1,500 crore to create a new facility for making around 100 million doses a month.

Therefore, to some well-known vaccine makers, the Rs 900 crore grant is far from adequate to sharply ramp up supplies, which is what matters the most today. The Rs 900 crore when disbursed thinly across companies, some of them argue, could at best be for improving processes or for making some materials for clinical studies and for incurring the expenses for the consumables and related expenses.

How the vaccine costs add up

So, how much does it cost to make a vaccine? According to one major Indian vaccine maker, “if a company already has the infrastructure, plant, buildings, and machinery in place then making the COVID vaccine would entail anywhere between Rs 150 crore to Rs 300 crore depending on the size of the clinical trials and even higher if trials are to be in multiple countries involving 30,000 or more subjects in all. But then, some industry experts feel these numbers are high and it is quite possible to set up a greenfield facility for about Rs 250 crore. Also, the clinical trials need not be for a huge sample of 30,000 subjects, recruiting them is not easy apart from being a time-consuming activity. Instead, it is possible to do with around 5,000 subjects at a total cost of around Rs 25 crore working at an average cost of around Rs 50,000 per subject. The spending here is largely on administrative expenses and for the various tests that will have to be conducted on the subjects.

But then vaccine makers feel these are unreasonable and even though the cost of clinical trials in India is a fraction of what it costs abroad, the grants dished out abroad for vaccine research are much higher. They point to the US, where under the Trump administration huge sums were set aside for the vaccine research program. Called the Operation Warp Speed program, it allocated more than $ 12 billion to vaccine makers and even committed the number of doses it intended to procure from the vaccine makers.

At-risk manufacturing argument

Talk of vaccine procurement and that is another issue that seems to agitate many vaccine makers in India. A common complaint among them seems to be the big challenge of finding resources to produce the vaccines without purchase orders in hand from the government. The argument is that even after a company has secured the grant either from India or from abroad, the bigger worry is making the vaccines without any firm orders in hand. “Even to existing companies there are no firm orders, while orders for large quantities are not easily forthcoming from the government and therefore it adds worries for the companies on how to raise resources to pay for the imported inputs,” says one vaccine company promoter. The costs of inputs vary – for instance, one estimate put it at 75 cents per dose to be paid to book the input suppliers – could be for consumables and adjuvants needed in the vaccine.

Without orders in hand, companies say they even cannot approach banks and try and raise their working capital limits. The promoter has to advance the funds required for inputs and other manufacturing expenses and end up manufacturing at-risk.

The industry insiders, however, feel the government is well within its rights not to place an order till the product is approved and therefore it would make better sense for companies to marshal all their energies working with the government to get the products approved at the earliest and then make a case for placement of advance purchase orders from the government.

Financial Express Online has not been able to independently verify this from the government and there is little clarity from the government statements on its exact procurement plans and firm commitments given to specific companies.

Active since early 2020

The official response that Financial Express Online got from the Department of Biotechnology (DBT) in fact lays out the background to the current development and talks of a clear understanding on a need way back in early 2020 itself: “In light of the COVID-19 pandemic, the Department of Biotechnology announced the ‘DBT-BIRAC COVID-19 Research Consortium’ call, in early 2020, as part of the comprehensive efforts to facilitate development of indigenous research solutions to tackle COVID-19.” The reason was apparent: “Strengthening COVID-19 vaccine development efforts was a key focus area under the call. DBT and its public sector undertaking Biotechnology Industry Research Assistance Council (BIRAC), are supporting nearly 15 vaccine candidates by industry and public sector laboratories at a cost of about Rs 100 crore.” This again, may not seem a huge amount to many but then, it says, “three of these indigenously developed vaccine candidates have progressed from proof-of-concept to the clinical development stage and are currently undergoing clinical trials and two vaccine candidates are in advanced pre-clinical stage.” It then goes on to give names of companies and the area of activity like Zydus Cadila (DNA), Biological-E (RBD), Gennova (mRNA), Bharat Biotech (Nasal Vaccine and Rabies Platform).”

It is in light of this, it says. “to further reinforce and accelerate the COVID-19 vaccine development efforts, ‘Mission COVID Suraksha the Indian COVID-19 Vaccine Development Mission’, was announced by the Government as part of the Atmanirbhar Bharat 3.0 package, to address the urgent need for a safe and efficacious COVID-19 vaccine.” The time is apparently ticking and outcomes as deliverance with the vaccine vials is all that people seem to be hoping for, at least, at the moment.

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