Explained: Why Bharat Biotech Ended Covaxin Deal With Brazil Manufacturer

After Bharat Biotech terminated its Covaxin deal with its Brazilian manufacturers Precisa, the Brazilian government has cancelled the vaccine's clinical trials in the country

On Friday, Hyderabad based Bharat Biotech announced that it has terminated its Covaxin COVID-19 vaccine deal with Brazilian manufacturers Precisa Medicamentos, and a Dubai-registered firm called Envixia Pharmaceuticals claiming that they found the Brazilian company used fraudulent documents for the deal.

Following Bharat Biotech's decision to end its deal with the manufacturer, the Brazilian regulatory body ANVISA (National Health Surveillance Agency) on Saturday suspended the vaccine's clinical trials in the country. Bharat Biotech said it was working with ANVISA to ensure that the vaccine is made available to the South American country. Earlier in June, ANVISA suspended a $324 million deal for 20 million doses Bharat Biotech had signed with the Brazilian government.

Whether the complete deal and purchase will be cancelled or a new manufacturer will come on board remains to be seen.

The termination of the deal and the suspension of the trials adds to the woes of the Bolsonaro government which is already facing corruption charges for the same. On June 25, 2021 a member of the Health Ministry Luis Ricardo Miranda and his brother federal deputy Luis Miranda acted as whistleblowers against the government. They said that the president was informed about the health ministry official being pressurised to accept a $45 million pay order from a Singapore based company- Madison Biotech, a subsidiary of the Indian Bharat Biotech.

The Senate holds the president accountable for not responding to the whistleblower's information and paying more money for a vaccine that was not even approved in the country. Bolsonaro claimed that he was incorruptible and that these invoices were fabricated. Bolsonaro is already facing heat for the handling of the pandemic with Brazil ranking second highest in COVID-19 deaths globally.

What Went Wrong Between Bharat Biotech And Brazil?

When the first reports of corruption in the deal emerged, Bharat Biotech remained tight-lipped and denied any fraudulent angle in their deal with the country. However, the executive director of the Brazilian company, Emanuela Medrades, appeared before the Senate on July 14 and passed the complete blame to the Indian company, reported The Wire. Along with the pricing of the vaccine, taxation and invoices, Medrades further alleged that the invoices that are suspected to be fabricated, also came from the Hyderabad based office. This statement changed the equation the two companies shared.

In response to these accusations, Bharat Biotech has now questioned the authenticity of the documents Precisa submitted to the Brazilian health ministry on Feb 25, 2021. Bharat Biotech and Precisa agreed to collaborate and signed on the dotted line on January 12, 2021. Published by O Globo News, in the documents Precisa Medicamentos declared that it was the "legal and exclusive representative of Bharat Biotech in Brazil" and that there was nothing to prevent it "from being authorized to (sign) contract with the ministry of health"

In its statement, Bharat Biotech said, "We have recently been informed that certain letters purported to have been executed by executives of the company are being circulated online. We would like to emphatically state that these documents have not been issued by the Company or its executives and vehemently deny the same. We also stress that all our actions, including our global dealings, are done in accordance with local laws and that Bharat Biotech follows the highest standard of ethics, integrity, and compliance at all times."

After the news of corruption broke, the Brazilian government immediately launched a Parliamentary Commission of inquiry (CPI) to decide whether to cancel Covaxin's order or allow it to be given to the one percent population as decided in early May.

Interestingly, Bharat Biotech was in talks with ministry health officials as well as the Brazilian company since November 2020. Till the declaration yesterday, the role of the Dubai third-party was never discussed. Bharat Biotech has chosen not to address questions towards the presence of this third party in the deal. All of the licensing, distribution, manufacturing was going to be handled by Precisa.

Bharat Biotech's journey in Brazil has not been smooth. In March, the ANVISA denied its appeal for emergency use authorisation. Before the suspension of the purchasing deal, ANVISA permitted the government to purchase only four million doses and to conduct clinical trials in the country in June.

The president of Precisa is expected to appear before the Senate in the first week of August. His reaction to the allegations of forgery will help in finalising the outcome of the CPI. The CPI is currentlly on a 15-day leave. However, one of the members of the Senate, Senator Simon Tebet told the Wire that Bharat Biotech's revelation of forged documents confirmed the CPI's suspicions of fraud in the deal.


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