India’s Serum Institute Struggled to Meet Its Covid-19 Vows

NEW DELHI – Adar Poonawalla made great promises. The 40-year-old boss of the world’s largest vaccine company pledged to take a leading role in the global effort to vaccinate the poor against Covid-19. His India-based empire signed hundreds of millions of dollars in contracts to make cans and export them to suffering countries.

Those promises have fallen apart. India, embroiled in a second wave of coronavirus, is laying claim to its vaccines. Other countries and aid groups are now trying to find scarce doses elsewhere.

At home, politicians and the general public have charged Mr Poonawalla and his company, the Serum Institute of India, with price increases during the pandemic. Serum has had production issues that have prevented it from ramping up production at a time when India needs every dose. He has been criticized for leaving for London in the middle of the crisis, although he said it was only a short trip. He told a British newspaper that he had received threats from politicians and some of India’s “most powerful men” demanding that he provide them with vaccines. When he returns to India, he will travel with government-appointed armed guards.

In an interview with the New York Times, Mr. Poonawalla defended his company and its ambitions. He said he had no choice but to give vaccines to the government. He cited a shortage of raw materials, which he had partly blamed on the United States. The manufacture of vaccines is a laborious process that requires investment and great risks. He said he would return to India when he finished his business in London. He shrugged off his previous comments on threats, saying they were “nothing we cannot deal with”.

But he also admitted that the Serum Institute alone will not be able to vaccinate India anytime soon, let alone bear the burden of vaccinating the world’s poor.

“The problem is, no one took the risk I took early on,” he said. “I wish others had.”

His position is a dramatic turnaround for Serum and the Indian government. In January, when India was launching its own vaccination program and exporting at the same time, Prime Minister Narendra Modi promised that its vaccines would “save humanity”.

Instead, the looming tragedy has made it clear that India – even with the world’s largest vaccine maker – cannot save itself.

India’s long-term vaccination prospects improved after the Biden government on Wednesday supported the waiver of intellectual property protection for vaccines, which could make it easier for Indian factories to manufacture those vaccines. Still, this will not help the current crisis in India, which had claimed more than 230,000 lives as of Friday – a number that is likely to be vastly outnumbered.

Serum won Mr. Modi’s favor in part because it fitted the government’s tale of a separate India poised to take its place among the world’s great powers. Now both Mr Modi’s government and Serum have been humiliated and their ambitions are being challenged.

“Our capacities are extremely poor,” said Manoj Joshi, a staff member at the Observer Research Foundation in New Delhi, which focuses on Indian politics. “We are a poor country. I hope we can build some humility into the system. “

Mr. Poonawalla took over the running of the Serum Institute a decade ago from his father, Cyrus, a horse breeder who became a vaccine billionaire. Before the crisis, he was hailed in the Indian media as an example of a new class of young, secular entrepreneurs. Photos of him and his wife Natasha were a staple of fashion.

Last year Serum signed a contract with AstraZeneca to manufacture one billion doses of its Oxford-AstraZeneca vaccine called Covishield in India. Serum received a $ 300 million grant from the Gates Foundation to deliver up to 200 million doses of Covishield and another vaccine under development to the Gavi Alliance, the public-private partnership that provides Covax, the program for the donation of Vaccines to poor countries, monitored.

According to a review of sales contracts supplied by UNICEF, Serum committed between January and March to sell approximately 1.1 billion doses of vaccine in the coming months. By the time India largely stopped exporting vaccines, Serum had only exported about 60 million doses, about half to Gavi. India had asked for more than 120 million.

Since then, AstraZeneca Serum has issued a legal notice regarding delivery delays. Serum has only “temporarily postponed,” said Poonawalla, citing the Indian government’s export ban.

“That comes from India,” he said. “It is not the supplier who is behind schedule.”

The world is wrestling with the ripple effect. A spokesman for Gavi said India’s decision to prioritize “domestic needs” “has an impact on other parts of the world that are in dire need of vaccines.” Even so, Gavi signed a purchase agreement with an American vaccine company called Novavax on Thursday that included the doses of serum to be administered.

Nepal, India’s northern neighbor, changed its public procurement law to pay serum an 80 percent advance, or around $ 6.4 million, for the purchase of two million cans of Covishield. Serum delivered the first million doses but is offering Nepal its money back for the second million, said Dr. Dipendra Raman Singh, Director of the Nepalese Ministry of Health. Nepal has refused in hopes of getting more doses as India’s disaster bleeds across the border.

Some of India’s needs are self-inflicted. Only two vaccines are made, Serum’s Covishield and one that was developed in India. An intergovernmental agreement to manufacture Russia’s Sputnik V in India is embroiled in bureaucracy. If other manufacturers had started earlier, said Mr Poonawalla, serum might not have been exposed to as much pressure.

Serum’s failure to deliver is also AstraZeneca’s, as it has pledged to Oxford University that the vaccine will be made available to countries that cannot afford it.

“I was very sad that we couldn’t help them, but don’t forget that my first priority is my nation, which has given me everything,” said Poonawalla. “And after all, I’m Indian. I may be a global Indian company, but the fact is we are in India. We have to take care of ourselves just as America has taken care of itself, Europe takes care of itself. “

But serum cannot meet India’s needs either.

Serum planned to split its 50-50 doses between India, either directly or through Covax, and the rest of the world. Serum now accounts for 90 percent of the Indian supply and is still inadequate. Less than 3 percent of the population have been fully vaccinated. In some states, people are turned away from vaccination centers when they run out of doses.

Serum has missed its expansion goals. Mr Poonawalla said last fall that the Serum Institute would pump 100 million doses a month earlier this year, of which about four in ten would go overseas.

Serum capacity remained at around 72 million doses per month after a fire at a facility designed to help the company ramp up vaccine production. A grant of more than $ 200 million from the Indian government should help the company meet its goal by the summer, he said.

Understand India’s Covid Crisis

Mr. Poonawalla has also cited raw material supplies. In April, he called on President Biden on Twitter to lift the embargo on raw materials used to manufacture Covid-19 vaccines. White House officials said Mr. Poonawalla misrepresented his situation. Still, the United States said it would send raw materials to the Serum Institute to increase vaccine production, even though Mr Poonawalla said they had not arrived yet.

Mr Poonawalla has also been investigated for charging different prices to the central government, Indian states and private hospitals. Two weeks ago, Serum said it would charge state governments about $ 5 per dose, about $ 3 more than Mr. Modi’s government.

Last week, after criticism, Mr Poonawalla lowered the price to $ 4. Nonetheless, the critics point to an interview in which Mr Poonawalla said that he was making a profit even at the price of central government.

Mr Poonawalla said that serum could be sold to the Indian central government at a lower price because they were ordering larger quantities.

People don’t understand, ”Poonawalla told the New York Times. “They just take things in isolation and then slander you without realizing that these goods are sold worldwide for $ 20 a dose and we are getting them in India for $ 5 or $ 6. There is no end to cribbing, complaining, criticizing. “

Mr Poonawalla said he had received more than just complaints. His company last month asked the Indian government to keep him safe, citing threats that the company has not made public. The government assigned him a detail two weeks ago that includes four to five armed workers.

In an interview with The Times of London newspaper published last week, he described how he received constant aggressive calls demanding vaccines immediately. “‘Threats’ are an understatement,” he told the newspaper.

He downplayed the threats in his interview with the New York Times, and his office declined to provide further details. Nonetheless, the comments caused an uproar in India. Some politicians have asked him to give names.

In a petition before the Bombay Supreme Court on Wednesday calling for additional security for Mr Poonawalla, Datta Mane, a Mumbai lawyer, said the vaccine tycoon had been threatened by prime ministers – India’s equivalent to governors – and business leaders. The company said it has no relationship with Mr. Mane and was not involved in the petition.

The Times of London reported that the threats had become so ominous that Mr Poonawalla fled India to the UK, an allegation that Mr Poonawalla denied. Instead, he said he was there on a business trip to see his children who attended school there last year.

His presence in London only fueled his critics, who angered the price hikes of serum. Sunil Jain, editor-in-chief of The Financial Express newspaper, tweeted that Poonawalla’s departure to London was “shameful” and that he should cut prices.

The Serum Institute is planning a significant expansion in the UK, investing nearly $ 335 million in research and development to fund clinical trials, expand its sales office and potentially build a manufacturing facility, Poonawalla’s office said.

“Everyone depends on the fact that we can deliver this magical silver ball in an almost infinite capacity,” said Poonawalla. “There is tremendous pressure from state governments, ministers, the public, friends and anyone who wants the vaccine. And I’m just trying to distribute it fairly as best I can. “

Selam Gebrekidan in London and Bhadra Sharma in Kathmandu, Nepal contributed to the coverage.

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