Apropos your article entitled “Govt. incurring huge losses due to purchase of BCG vaccine from private parties” by Peethaambaran Kunnathoor, I regret to note that the facts and conclusions are inappropriate and misleading; hence need clarifications.
The Public Sector Unit, BCG Institute, Guindy which was manufacturing BCG vaccine was always in the red and huge funds from the Government were expended to keep it going. Merely looking at the direct cost to vaccine production at BCG Institute, Guindy for the erstwhile years is misleading. The total amount of cost of employees, including provision for pension and building upgradation and maintenance, as also the cost of interest on inventory, capital deployed of land & buildings etc. should be taken into account as a stand alone overall cost to the Institute. Obviously, if you take the whole cost expended by Government vis-à-vis the sale of the product, there will be a noticeable and substantial loss.
Mr. Peethaambaran Kunnathoor talks about the loss and cost, but he doesn’t look at the likely loss of lives if BCG vaccine was manufactured in bad manufacturing facilities at BCG Institute, Guindy, which is a threat to the lives of children. This was the prime reason why the Plant at BCG Institute, Guindy was shut down on the recommendations of WHO, as also the Drug Inspectors and Drug Controller found the manufacturing at BCG Guindy sub-standard and not complying with “Schedule-M” requirements as well as Drug & Cosmetic Rules. I am sure you will agree with me that preventing reactions or likely risk to the lives of our children are more important than a few crores of rupees?
The only factual and correct statement made in the article is that both Serum Institute and Green Signal Biopharma who are making the vaccine under good manufacturing conditions have quoted almost the same price and the Government is procuring the vaccine at Rs.29 for 10 doses, including VVM which cost Rs.3/-. The net price of the vaccine, for delivery to destination, therefore is divided by 10, which is only Rs.2.60 np. Forget about getting a cup of tea at this price, even a pan now a days cost more than this sophisticated vaccine.
Last but not the least, it would be relevant to point out that Serum Institute is supplying the vaccine at this low price of Rs.2.60 np, keeping in view the National interest; whereas the same vaccine in the Private market and also supplied to U N Agencies and globally is at three times higher, which please note.
Dr Cyrus S Poonawalla
CMD, Serum Institute of India Ltd
Peethaambaran Kunnathoor replies: The intention of writing the story, ‘Govt incurring huge losses due to purchase of BCG vaccine from private parties’, was to show the losses being incurred by government while procuring BCG vaccine from private companies for the National Immunisation Programme.
The government transferred seeds of BCG vaccine to Green Signal Biopharma based on some terms & conditions in 2006. As per the terms & conditions, the company has to supply 80 per cent of its production to the government' as and when needed by the government at the rate fixed by BCG VL, Chennai'. The rate fixed was
Rs.15 for one vial of 10 doses.
In 2006, the BCG VL in Chennai supplied BCG vaccine for the NIP at a rate of
Rs.15 for 10 doses including saline. Now government is getting the vaccine from private sources at a rate of
Rs.29 for the same quantity. Being so, for every 10 doses government could have saved
Rs.14 had they procured it from Green Signal based on the Terms & Conditions for the BCG seed transfer.
From the email of Dr Cyrus S Poonawalla, CMD, Serum Institute of India, I am reaching the conclusion that...
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Green Signal Biopharma is an 'efficient Private Manufacturer'.
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The company is meeting all the requirements for vaccine production and making the vaccine under good manufacturing conditions.
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They have also participated in the tender and quoted the same price.
The government's demand for BCG vaccine every year is 60 million doses (60 lakh vials). Since Green Signal is producing the vaccine by meeting all the requirements, the government could have purchased the vaccine from that company following the Terms & Conditions for the BCG vaccine seed transfer. If so, the difference in the rate of one vial would be Rs.14. Then the total amount of variation will come around
Rs.8, 40, 00,000/- (60 lakh X 14 ). This amount of
Rs.8.4 crore, the government could have saved every year had they followed the Terms & Conditions it made at the time of transferring BCG vaccine seed.