Apple for Apple ? Vaccine against Vaccine ?

 

Several Indian States have recently floated Global Tenders for supply of millions of dozes of Covid vaccine. May be close to 12 States asking for 500 million dozes of vaccines

These figures must be looked in the light of following :

Ø  Currently there are only 2 Indian Manufacturers

Ø  During the next 6 months ( June-Dec ), another 4 / 5 Indian manufacturers may start production

Ø  Russia has already started supply of SPUTNIK V( though only a few million dozes )

Ø  Other Foreign Manufacturers are unlikely to quote against Indian tenders( they get much higher prices from other countries )

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Now, it is apparent that :

Ø   Demand is far in excess of supply

Ø  Tenders floated by State Govts can be expected to be shoddily drafted ( - on purpose ? )

Ø  Within India, several States will be simultaneously negotiating with very few manufacturers, pitting one state against the other, for the SAME capacity

Ø  Manufacturers / Suppliers are bound to take advantage ( of this scarcity situation, leading to intense and unhealthy competition amongst states and, as a result, pushing up the prices )

Now there is no denying that a DECENTRALIZED MANNER of purchase process could, well be much FASTER as compared to a CENTRALIZED purchase on behalf of the States

 But,

Ø  Was it impossible for all State Tender Inquiries to be posted on central govt purchase e-Portal ?

Ø  The QUOTATION FORM was so STANDARDIZED that it would be very easy to prepare a COMPARATIVE TABULATION of all the offers as shown below ?

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               AN “ APPLE FOR APPLE “ COMPARISON OF OFFERS RECEIVED

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	Vendor A	Vendor B	Vendor C
PARAMETERS FOR COMPARISON:
( A )   Product Specifications
#  Manufacturer / Brand
#  Whether WHO approved
#  Efficacy %
#  Storage Temperature Range
#  Expiry Period
( B )  Tenderer / Local Agent Details
( C )  Country of Manufacture
( D )  Base Price ( $ per dose of 10 )
( E )   If Imported :
#  Price Basis ( FOB – CIF )
#  Import Duty %
#  Landed Cost
( F )   Local Taxes ( GST )
Final Total Delivered Price ( $ per dose )
( G )  Total Quantity being offered ( Millions )
( H ) Delivery to commence from ( date )
( I )  Weekly Supply Rate
( J )  Commercial Terms
#  $ / Rs Exchange Rate assumed
#  Letter of Credit / Progress Payment Terms
#  Penalty Clause acceptance
#  Liquidated Damages Cost acceptance
#  Risk Purchase Clause acceptance
#  Force Majeure clause acceptance
#  Offer Validity date
#  Product Liability acceptance
#  Indian Court of Jurisdiction acceptance

 

RELATED  READINGS :

These scenario need to be looked at from the following data :

( source : THE 2BN DOSE QUESTION / Eco Times / Deep Dive / 23 May 2021 )

HEALTH MINISTRY PROJECTIONS FOR VACCINES ( Period : Aug-Dec 2021 / No of Doses in Millions ) :

Ø  Covishield……………. ……………….750

Ø  Covaxin………………… ……………….550

Ø  Sputnik V……………………………..  156

Ø  Biological E……………………………….300

Ø  Covavax( SII-Novavax )……….. 200

Ø  Bharat Biotech Intranasal…………100

Ø  Zydus Cadilla………………………………50

Ø  Gennova……………………………………..60

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           TOTAL…………………………………….  2166

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VACCINES PROCURED BY GOI ( Jan – May 2021 / No of doses in Millions ) :

Ø  Covishield…………………………………… 276

Ø  Covaxin………………………………………….80

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          TOTAL…………………………………………..  356

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Now here is the justification for :

Ø  Apple for Apple comparison

Ø  A single / common JOINT NEGOTIATING COMMITTEE ( with representation of all States + Centre )

 

 Mumbai civic body gets 3 bids for Sputnik, but firms show no proof of deal with manufacturer 

Extract :

The Mumbai civic body has received three bids for the supply of the Russian-made Sputnik V Covid-19 vaccine but none of the companies have produced any documentation connecting them with the vaccine manufacturer.

It has, meanwhile, asked the three companies that have put in bids, to submit more documents.

“The issue is that the three companies who claim that they can supply the Sputnik vaccine have not given any documents that connect them with the manufacturer,” P. Velarusu, additional municipal commissioner, told ThePrint. 

“We don’t know from where they intend to procure the vaccine. We have asked them to provide these documents, show what agreements they have with manufacturers and so on.”

Of the three companies that have submitted bids, one is from the United Kingdom while the other two are based in India.

A senior BMC official said the two Indian companies seem more like medicine importers.

The BMC does not know if these companies have supplied Covid vaccines anywhere else in the world.

“That was not a requirement in our tender conditions. But what we are absolutely firm on is that these companies must have authorisation from the manufacturer,” said the official quoted above.

He added that so far there haven’t been any queries, either formally or informally, from any other companies in response to the global tender.

The three companies that have shown interest in supplying Sputnik V for Mumbai have all quoted price points between $18 and $20 per two doses.

“At the current rate, this works out to Rs 750 per dose, which is more expensive than the domestic manufacturers. But we are fine with that,” the civic official quoted above said.

Serum Institute of India is supplying Covishield, the Oxford-AstraZeneca vaccine, at Rs 300 per dose to state governments, while Hyderabad-based Bharat Biotech is supplying the indigenous Covaxin at Rs 400.

Other than the BMC, civic bodies of Navi Mumbai and Thane, Mumbai’s satellite towns, have also floated global tenders for Covid-19 vaccines. The Maharashtra government too has floated its own global tender for the supply of Covid vaccines.

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Raj may move SC for uniform vaccine pricing  /  HT  /  24 May 2021

Extract :

Ø  The Rajasthan government is planning to approach the Supreme Court to ask for a new policy that ensures uniform distribution and pricing of Covid-19 vaccines, said a senior official familiar with the development. It will be the second state to do so after West Bengal, which had on May 7 moved the apex court for the exact same reason and demanded that the states be given the vaccines free of cost

Ø  The state has also floated a global tender to procure 1 crore doses but says that this should have been done by the Centre. 

“TThe state can bear the expenditure, but the tender should be floated by the government of India. The Centre can negotiate for a uniform rate, and check the credentials and credibility of the vendors,”

Ø  The differential pricing, the official said, will result in competition among states, as the vendors participating in the global tender are quoting more than twice the price of vaccine — ₹300 per dose plus GST.

Ø  Vaccine manufacturers SII and Bharat Biotech have been charging ₹150 per dose from the Centre, and ₹300-400 per dose from the states. The price should be capped at a uniform rate of ₹150, the official said

 

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States may hit a roadblock in Global Sourcing quest  /  Business Line  /  24 May 2021

Extract :

Ø  Pfizer has indicated that its discussions will be ONLY THROUGH the Central Government

Ø  ….. across the World, Pfizer will supply the COVID – 19 vaccine ONLY to Central Governments and supra-national organizations for deployment in national immunization programmes. The allocation of doses and implementation plan within a country is a decision for local governments based on local health authority guidance

Ø  Moderna, too is said to have told the Punjab government that it would deal ONLY WITH THE CENTRE

Ø  Besides , there is no excess vaccine supplies as companies have already committed much of their supplies for the next several months, he ( former Health secretary, JVR Prasad Rao ) added. States competing for vaccines will push up the price of vaccines, he said, and the coutry loses its bargaining power and economies of scale that come from procuring as a single entity

Ø  An industry representative explained: since vaccines have emergency authorizations in most countries, they will be available ONLY THROUGH GOVT CHANNELS – meaning, there is no excess stock to tap

Ø  Except for Sinopharm and may be Sputnik-V, it looks unlikely others have capacity to supply to individual states

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Dear Chief Ministers of States :

In any industry, it takes months ( if not years ) to :

Ø  Put up Greenfield manufacturing facilities

Ø  Ramp up existing manufacturing capacities

Hence, all these brave talk of DECENTRALIZED PROCUREMENT, in itself, is unlikely to get us 2166 million doses in Aug-Dec ( 5 months @ 430 million doses per month – as against actual procurement of a meagre 356 million doses in Jan-May , @ 70 million per month ! )

There is just no way, Pharma Industry can ramp-up vaccine production by 6 TIMES in June-July !

It is time to accept this ground reality of life and collaborate / cooperate with the Central Government for a

Ø  united / joint evaluation of tender offers  

Ø  joint negotiations with suppliers  

Ø  single order placement ( on behalf of all the States )

Ø  Single Delivery Schedule Instruction to each supplier

It is time to pull together in one direction rather than pulling in different directions

Through this E-Mail, I am requesting Dr HarshVardhanji to file appropriate AFFIDAVIT in the Supreme Court , showing willingness of the Central Govt to coordinate vaccine procurement as suggested above

With regards,

Hemen Parekh  /  hcp@recruitGuru.com  /  24 May 2021