Covaxin maker Bharat Biotech on Tuesday said supplying the coronavirus vaccine to the Centre at Rs 150 per dose was “clearly not sustainable in the long run”, PTI reported. Therefore, a higher price in private markets was necessary to offset part of the costs, it added.

The Hyderabad-based vaccine maker released a statement amid questions on the differential pricing for supplies to government and private sector.

While supplying to the Centre at Rs 150 a dose, the company has set Rs 400 as the rate at which it will provide the vaccines to state governments and Rs 1,200 to private sector.

“The Centre’s supplying price is pushing the pricing structure for the private sector upward,” Bharat Biotech said. “Fundamental business reasons ranging from low procurement volumes, high distribution costs and retail margins, among few others, contribute to higher pricing of Covaxin to the private sector.”

It added that as directed by the Centre, less than 10% of the production of Covaxin till Tuesday, has been supplied to private hospitals, while most of the remaining stock was sent to the central and state governments.

“In such a scenario the weighted average price of Covaxin for all supplies realised by Bharat Biotech is less than Rs 250/dose,” the statement said. “Going forward, approximately 75% of the capacity will be supplied to state and central governments with only 25% going to private hospitals.”

Justifying its pricing for private players, Bharat Biotech said it has so far invested over Rs 500 crore for product development, clinical trials and setting up of manufacturing facilities for Covaxin. “The pricing of vaccines and other pharmaceutical products heavily relies on a series of factors such as the cost of goods and raw materials, product failures, at risk product development outlays and product overages, besides other regular business expenditures,” it added.

The company said it will pay royalties to the Indian Council of Medical Research and the National Institute of Virology based on sales. The vaccine was partly funded by taxpayers’ money.

“Unlike most medicines and therapeutics, vaccines are provided free of cost by the government of India to all eligible Indian citizens,” the statement said, adding that procurement of vaccines by private hospitals was optional and not mandatory.

Bharat Biotech also mentioned that it has not sought indemnity from liability or legal protection from the government for any severe side effects of its coronavirus vaccine. Reports said this was a key condition put forth by pharmaceutical companies Pfizer and Moderna for supplying doses to India.