On Friday, the Congress party demanded that the Modi government should comment on the allegations of a scam in the purchase of Covaxin by Brazil, which has been levelled by Brazilian opposition parties against president Jair Bolsonaro. The Congress party said that although Bharat Biotech is a private company, the Covid-19 vaccine was developed in collaboration with ICMR, and as public money was used in it, the govt should not remain silent on the issue.
Congress spokesperson Supriya Shrinate said, “Taxpayers’ money was put into this and which is why we have a right to question: what has happened with that money and why is the government conspicuously silent on it?” She claimed that as ICMR is slated to get 5% from the sale of the vaccine, the govt agency is making a loss due to the ‘scam’, as she claimed that Bharat Biotech was selling the vaccine to a different company at a lower price, which was in turn supplying the vaccine to Brazil at the ‘high’ price of $15 per dose.
The deal to supply 20 million doses of Covaxin has been cancelled by the Brazil govt, after an opposition senator filed a complaint against president Bolsonaro alleging corruption in the deal. It was alleged that the president turned a blind eye to the allegations of wrongdoing in the deal, and subsequently the federal investigators have launched a probe in the deal.
However, a perusal of the available facts does not suggest any scam in the deal, and it seems a part of the effort of the Brazilian opposition to impeach the president to remove him from the post.
The allegations
In February this year, Brazil government had signed a deal with Bharat Biotech to purchase 20 million doses of Covaxin at a price of $324 million, at the rate of approx. $15 per dose.
The left-wing opposition parties also have been alleging that the price of $15 per dose is highest in the world, even higher than the Pfizer vaccine price. They have been claiming that the original price of the vaccine is $1.34, and it was jacked up to $15 when the deal was signed in February 2021.
The deal was cancelled after Brazilian Congressman Luiz Miranda claimed that he had warned the president about possible scam in the deal, but he was ignored. In testimony given to the Parliamentary Inquiry Commission (CPI) on June 25, Luiz Miranda said that he was tipped off about the ‘scam’ by his brother Luis Ricardo Miranda, a former health ministry official, who was in charge of signing deals with vaccine-manufacturers.
Luis reportedly said that he was pressurised to sign the deal despite irregularities in it.
Luis also said that a Singapore based company Madison Biotech had sent an invoice of $45 million to the Brazilian govt for 3 million doses, at the rate of $15 per dose. He said that it was irregular, as Madison was not mentioned in the contract, which was signed by Bharat Biotech, the Brazil govt and Precisa Medicamentos, the representative of Bharat Biotech in Brazil.
The left wing opposition parties have been using this allegations to attack the government, which forced the govt to cancel the deal and order an enquiry.
The reality
The Congress party repeated the claim of Brazilian opposition parties that while the price of Covaxin is $1.34, it is being sold to Brazil at $15, therefore, there is a scam in the deal. But the fact is, this claim is absolutely wrong. There is no proof that actual price of Covaxin is $1.34 or ₹100. The vaccine is being supplied to the Indian govt at a highly subsidised price of ₹150, but the company says it is a non-competitive price and not sustainable in the long run. The company is selling the vaccine to private hospitals in India at the rate of ₹1200 per dose, which is around $16, more than the price charged from Brazil.
In April, Bharat Biotech had announced that the export price of Covaxin will be $15-$20, which means the price charged from Brazil is lowest in the range. A statement issued by the company on June 30 on the allegations says, “the pricing of COVAXIN® has been clearly established between $15-20 per dose for supplies to Governments outside India. The pricing for Brazil has also been indicated at $ 15 per dose.”
The allegations of the scam are based on the wrong claim that original price of Covaxin is $1.34, which is even less than the subsidised price for Indian govt, and Bharat Biotech is not selling the vaccine at that price to anyone else, including state governments and private hospitals in India. The price of $15 for Brazil is in line with the price for Indian private hospitals. If the Congress party and the opposition party expects the vaccine to be available for Brazil at ₹100 per dose, clearly they are wrong.
Brazil govt has denied that the country is paying more for the vaccine. Onyx Lorenzoni, the Secretary-General of the Presidency, said that the vaccine is not overprice, and those made the allegations do not know how to count. He also said that no vaccine has been purchase, no payment has been made, so there is no question of any scam. He also said that one of the documents presented by Luis Miranda was fake.
Precisa Medicamentos has also said that the price fixed by Bharat Biotech for Brazil is same as the price charged from 13 other countries which are using Covaxin. They said that the price was fixed by Bharat Biotech, and there was no scam in it.
Now coming to the Singapore based company Madison, contrary to the allegations of the opposition parties in India and Brazil, the company is actually part of Bharat Biotech. A statement issued by Bharat Biotech informs that Madison Biotech was founded in 2020 by Bharat Biotech founder Dr Krishna Ella, and it is a Bharat Biotech group company.
The company informs that Madison Biotech acts as a global sales and marketing arm for Bharat Biotech. “Dr. Ella and his wife Mrs. Ella founded Bharat Biotech in 1996 with a mission to drive innovation and large-scale manufacturing in the field of human vaccines. Since then, Dr. Ella has also founded or acquired 13 other organizations. This includes Madison Biotech, which he founded in 2020 for the purpose of external R&D and sales and marketing of vaccines,” the statement by Bharat Biotech said.
“We wish to dispel any notion or implication of any wrongdoing whatsoever, as all these are affiliate companies founded / acquired and operated by Dr. Krishna Ella,” The company also added.
Brazil government has confirmed that the invoices were sent by Madison as it is authorised to do so by Bharat Biotech. The government displayed a letter from Bharat Biotech in the media, which said that Bharat Biotech has entered into a supply agreement with Madison Biotech to supply and distribute various products of Bharat Biotech in different regions and territories.
The letter specifically adds that all the channel partners and entities are requested to accept invoices raised by Madison Biotech Pte Ltd for the products supplied.
Responding to the allegations by the left parties in the opposition, president Bolsonaro said that no payment has been to Bharat Biotech, as the country has not received any vaccine from the company, so there is no question of financial irregularities in the deal. The company has also confirmed that they have not received any payment from Brazil.
Although the deal was signed in February, Covaxin was approved by the health authorities in the country only in June. As a result, no batch of vaccines was shipped to the country by Bharat Biotech before the deal was cancelled by the Brazil government.
From the above, it can be concluded that the alleged scam in the Covaxin deal for Brazil does not exist, as the price is similar to the export price announced by the company, and the Singapore-based company is a group company of Bharat Biotech, not a shell company. It shows that the Congress party is collaborating with the left parties in Brazil to attack the right-wing governments in both the countries.
