Brazil Health Minister Marcelo Queiroga on Tuesday that the country will suspend its Covid-19 vaccine contract with India’s Bharat Biotech, amid allegations of corruption in the deal, reported Reuters.

A federal investigation is underway into alleged irregularities in a contract between Brazil’s health ministry and Bharat Biotech for 20 million (2 crore) doses of Covaxin.

“According to the preliminary analysis of the CGU [Comptroller General of the Union], there are no irregularities in the contract but, for compliance, the Health Ministry chose to suspend the contract for a more in-depth analysis,” the ministry said in a statement.

Queiroga said that his team would investigate the allegations while the suspension was ongoing. Brazil President Jair Bolsonaro has denied any wrongdoings.

The corruption allegations pertain to buying the Covaxin doses at a higher price. To buy vaccines, the Brazilian health ministry will have to pay $320 million (Rs 2,375 crore approximately) to Precisa Medicamentos, Bharat Biotech’s intermediary in Brazil. So each dose of Covaxin will cost Brazil $15 (approximately Rs 1,100).

This is significantly higher than what the health ministry paid for American pharmaceutical giant Pfizer’s vaccine, which has already obtained regulatory approval in Brazil.

Officials from the Brazilian health ministry also reportedly did not consider that Precisa, Bharat Biotech’s intermediary, had a history of alleged irregularities in contracts with the federal government.

Luís Ricardo Miranda, an official from the logistics department, had told the federal prosecutors on June 23 that he was pressured by one of Bolsonaro’s closest allies to buy Bharat Biotech’s vaccine.

Bolsonaro has claimed that the vaccine price agreed to with Bharat Biotech was mostly in accordance with the amount being paid by other countries. The Brazilian president promised to take action if the corruption charges were proved.

Bharat Biotech has been allowed to conduct third phase trials of Covaxin in Brazil. However, it is yet to receive approval for public use. Last week, the company said it was yet to supply the vaccines to Brazil and claimed that it was transparent about the pricing.

Covaxin, a made-in-India vaccine, had been found to be 77.8% effective against the coronavirus disease in phase 3 trials. The data has not yet been published in a peer-reviewed journal. However, Bharat Biotech can now approach the World Health Organization for emergency use listing of the vaccine, which would make it easier for Covaxin to receive approvals in other countries.

The Indian government and Prime Minister Narendra Modi have taken pride in showcasing Covaxin as the country’s first indigenously developed vaccine against Covid-19. Bharat Biotech developed the vaccine in collaboration with the Indian Council of Medical Research and the National Institute of Virology.