Explained: Why Brazil Suspended $324 Mn Deal With Covaxin
The regulatory approval body had permitted the use of Covaxin only for one per cent of the population before the purchase contract was suspended by the government
Brazil's Government has suspended the import of Hyderabad-based Bharat Biotech's COVID-19 vaccine Covaxin after the emergence of reports about corrupt practices performed in the purchasing process by President Bolsonaro's Ministry of Health. This incident has been dubbed as #CovaxinGate on social media.
Whether this suspension could lead to a cancellation of the 20 million doses ordered by the Brazilian government depends on the 10-15 day ongoing investigation conducted by the federal comptroller general (CGU). This investigation was launched after two Congressmen acted as whistleblowers and shared that one of them was pressurised to accept a $45 million advance payment towards Madison Biotechnology- a subsidiary of Bharat Biotech based in Singapore.
The two Congressmen- a Ministry of Health official Luis Ricardo Miranda and his brother federal deputy Luis Miranda took the stand at a parliamentary panel gathering and shared that President Bolsonaro was aware about an health ministry official facing pressure by his superiors. Bolsonaro, however, denied that there was any corruption in the deal signed for 1.6 billion reais ($324 million dollars, ₹2,400 crore).
This deal was signed when the National Health Agency ANVISA had not even approved Covaxin for use and the Brazilian government was paying the highest amount for Covaxin. The Bolsonaro government, which has been criticised for the way it has handled the COVID-19 pandemic in the country, was willing to pay $15-20 for one single dose of Covaxin and rejected the offer of the Pfizer vaccine, which was charging lesser for the doses.
In response to the allegations about their role in this brewing controversy, Bharat Biotech released a statement saying they had not received any advance payments, nor supplied any vaccine doses to Brazil. They also shared that all their deals with other countries are transparent as the price of Covaxin for foreign governments is fixed at $15.
This is not the first time that Covaxin has faced trouble in Brazil. ANVISA had on March 31 said that Covaxin did not meet the country's COVID-19 vaccine quality standards. Later, on June 4, ANVISA approved Covaxin for only one per cent of its population with many restrictive conditions.
What Led To The Suspension Of Covaxin?
On June 25, the Miranda brothers acted as whistleblowers for a scandal involving Covaxin and the Bolsonaro government. They testified at the senate that the two of them had informed the President about irregularities in a $45 million invoice raised by Madison Biotechnology, a Singapore-based company which was not a part of the original deal signed between Bharat Biotech, Precisa Medicamentos (the Brazilian company managing the import of the vaccine), and the government.
The health official, Miranda raised this concern in March, a month after the Brazilian government signed the deal with Precisa Medicamentos. He further testified that he faced atypical and excessive pressure by his superiors who kept calling him to approve the deal. The brothers even named Roberto Barros, a Bolsonaro ally who leads the coalition government in the lower house of the Brazil parliament. Federal Miranda also added that Bolsonaro asked him to not interfere with this deal.
Owing to the attention this scandal has received both in Brazil and internationally, the Parliamentary Commission of inquiry (CPI) and the CGU began investigating this scandal. In a preliminary eleven-page report justifying the suspension of Covaxin, the CGU notes, "Five points are listed to justify the suspension: Attempt to make advance payment, without contractual provision; possible payment through a company not a signatory to the contract; non-compliance with contractual deadlines; non-justification of price; and breach of contract by Bharat/Precisa as reported by ministry of health."
The committee formed to investigate the irregularities in the contract seems to blame Bharat Biotech, its offshore partner and its Brazilian representative in the report and not the Brazilian government, reported CNN Brasil.
Bolsonaro as reported by the Financial Express has said that he is incorruptible and that there are no irregularities in the contract. He even stated that they have not paid any amount to Bharat Biotech or received any doses.
How Did Bharat Biotech React?
Bharat Biotech corroborated Bolsonaro's statement that neither have they received any payment from Brazil nor have they exported any doses to the country, yet.
Denying any foul play in their deal, they clarified that they ask for advance payments against beginning the supply of doses from each country after the respective regulatory bodies have given approval to the vaccine. They said they have received advance payments from other countries.
Furthermore, defending the role of Madison Biotech, Bharat Biotech in its statement affirmed that the company was founded by Dr. Krishna Ella, Founder- Director of Bharat Biotech, in 2020 in Singapore. This company, according to the statement, was founded for external research and development as well as sales and marketing of vaccines.
Covaxin's Challenges In Brazil
In January 2021, Bharat Biotech shared that it was expanding its production of Covaxin and was collaborating with pharmaceuticals across the world. It even stated that it was going to start seeking emergency use authorisation in other countries.
Bharat Biotech signed a deal with Precisa Medicamentos on February 25, 2021 at $15 for one dose of the vaccine even before the vaccine was approved in the country. It sought Emergency Use Authorisation from ANVISA on March 8.
On March 31, ANVISA rejected the EUA as it said that Covaxin did not meet the quality and good manufacturing standards that were followed in Brazil. The ANVISA stated that the companies did not adhere to demands for documentation, methods of analysis, integrity of containers, methods used for sterilising, disinfecting, removing or inactivating viruses.
The ANVISA, later on June 4, allowed for the import and use of only four million doses of Covaxin instead of the pre-decided 20 million for only one per cent of its population. These four million doses were only to be used under specific conditions determined by the agency.
Citing huge gaps in the data submitted by Bharat Biotech, ANVISA asked the manufacturers to conduct Phase 3 trials in the country. It even highlighted that Bharat Biotech only submitted summaries of information needed to ensure safety and effectiveness. ANVISA asked the new trial to assess follow-up for 60 days after the second dose instead of the 45-day follow up submitted by Bharat Biotech.
Each batch of these doses were going to be subjected to a quality test at the National Institute for Quality Control in Health.
Before the government suspended this deal, ANVISA instructed the Brazilian Health Ministry to keenly assess all the doses in order to decide if they should import more doses or cancel them.
The lack of Covaxin data was also the reason for the US FDA declining emergency use to the vaccine in the country.
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