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Over the years, India has produced and exported more vaccines than any other country. However, its vaccination campaign against Covid-19, which it started in early January, faltered and faltered.

The most obvious response to this observation is that India’s population is large and fragmented-reaching a population of 1.39 billion is a complex and time-consuming task. Indeed, although the government’s vaccine delivery model—application crashes, pricing discrepancies, unclear information, and incomplete recordkeeping—is still worrying. But the real problem is the severe shortage of vaccines. This week, India opened up vaccination to people over 18 years old, but most states do not have enough stocks to provide vaccination. Adar Poonawalla, chief executive of the Serum Institute of India (SII), the world's largest vaccine manufacturer, warned that the supply contraction will continue for another three months.

In the local area, people are turned away from vaccination centers because vaccines are out of stock. In Mumbai, the city company completely suspended vaccination for three days. Other states have postponed plans to vaccinate citizens aged 18-45. As of this week, only 28.9 million Indians have received these two vaccines. Approximately 200 million people are waiting for the second attack, and 600 million people are eligible for the first.

Why is India, a vaccine factory facing the world, unable to find enough vaccines for its people? There is no single answer, but tracking the events of the past year reveals a dysfunctional timeline: government negligence, corporate profiteering, opaque contracts, and unfairness in the global pharmaceutical market have brought India to this moment of the vaccine crisis.

The coronavirus pandemic is raging in the United Kingdom and other parts of Europe, and the United States has declared a national emergency. Most parts of the world are under lockdown, including India. But teams around the world have been actively researching candidate vaccines, believing that immunization is the most reliable way to get rid of Covid-19.

In an interview, Adrian Hill, director of the Jenner Institute at Oxford University, described his team’s progress in vaccines. He doesn't believe in exclusive licenses. He said: "No one will make a lot of money from it." The open licensing system is a potential boon for India, which has dozens of vaccine factories across the country. The scientists in these factories have rich experience and low production costs. If the Oxford vaccine succeeds in the trial and obtains a license-which may take several months-India can find a way to put all these factories into production.

However, a few days later, AstraZeneca announced that it had obtained an exclusive license for Oxford Vaccines. Why the plan changed has never been completely clear, but the Gates Foundation may have a lot to do with it. A few months later, Bill Gates said to reporters: "We went to Oxford and said you did a great job." "You really need to form a team. We tell them a list of people who can talk to."

In an email to Quartz, Hill initially denied that his vaccine licensing plan had changed. When he read back the April 2020 quote to him, he did not respond.

AstraZeneca will produce vaccines in its own factory, but this is not enough, so it has signed production agreements with a few companies around the world. One of them is SII in the Indian city of Pune. SII has been producing vaccines for nearly half a century; before the pandemic, it produced 1.5 billion doses of human and animal vaccines each year, and supplied many projects carried out by the World Health Organization (WHO), the United Nations, and the United Nations Children’s Fund.

In May, AstraZeneca sent the first bottle of "seeds" used to cultivate vaccines to SII. The terms of the agreement between SII and AstraZeneca remain unknown. SII naturally hopes to provide its dosage to India. The company also continues to negotiate commercial transactions with other countries, but it is unclear whether the contract allows it to conduct its own transactions in Western countries where AstraZeneca is more active.

In addition, no one knows how much AstraZeneca made from the deal concluded by SII. Poonawalla's statement to the media has been confusing and contradictory. He once told a TV channel that SII paid 50% of the price to AstraZeneca as royalties. (Poonawalla did not respond to multiple requests for comment.) KV Balasubramaniam, who led another vaccine manufacturer, Indian Immunologicals, began to laugh when discussing SII's royalties. "Generally speaking, royalties account for 5% to 10% of net sales," he said. "I can't think of a situation where someone pays 50%."

Around the time SII began to produce the first batch of vaccines, the vaccine supply market was in turmoil. For example, the bioreactor bags (sealed disposable containers used to brew vaccines) have backlogged for several months. At this point, “the fastest construction of a new manufacturing plant from the ground up takes about 12 months,” said Murali Neelakantan, a lawyer with extensive experience in the pharmaceutical industry. "But the serum is not made from scratch." It already has land, personnel, and equipment. Some of its production lines can be prepared to start producing AstraZeneca vaccines, while at the same time purchasing more equipment and increasing production capacity.

Estimates of the investment required to produce these vaccines vary, but they do not differ much. Neelakantan cited a $45 million Norwegian project to build a production line that can produce 45 million doses per month. "And it will be cheaper in India, especially if you already have a factory and just increase production capacity," he said. Similarly, Balasubramaniam estimates that a 40 million dose facility will cost approximately US$40 million per month. The most generous estimate comes from a former Indian government official who requested anonymity, who believed that an increase of 100 million doses per month through increased production capacity would cost about 200 million U.S. dollars.

SII contracted to produce vaccines under the Covax facility. Covax is an initiative led by WHO, UNICEF, non-profit organization Gavi, and other organizations to raise funds from rich countries to purchase vaccines at a price of $3 or less per dose and supply them To 92 low-income countries. SII initially promised to provide 100 million doses; one month later, in September 2020, it agreed to produce another 100 million doses. (In addition, AstraZeneca has promised to produce 300 million doses of its own, probably from its other production bases.) In order to participate in the plan, a Gavi spokesperson said in an email that SII “promises that in addition to supplying India, it will give priority to Covax Multilateral The solution is for fair distribution."

To this end, SII received 300 million US dollars-funding from Gavi and the Gates Foundation. The funding is intended to help SII build its production capacity and "reduce" its operational risks: to make up for any losses that may occur if the vaccine has never been approved. And these approvals are still some way away; AstraZeneca has just begun phase 3 clinical trials, and the technology it uses has never been authorized for use in humans before.

Poonawalla has repeatedly stated that by 2020, this US$300 million is part of SII's US$800 million investment in the manufacture of AstraZeneca vaccines. (The other $250 million comes from SII’s own funds. The source of the remaining funds is unclear, although AstraZeneca may have also prepaid.) The same is true," Marini Isola, co-convenor of the All India Drug Action Network (Malini Aisola) said the network fights for fair access to medicines.

Using this money, Poonawalla hopes to be able to produce 1 billion doses per year, or about 80 million doses per month. But there are few details on how he did this: whether he temporarily switched other vaccine production lines to AstraZeneca injections, how much new equipment he bought, and how he spent money.

The first wave of coronavirus in India is waning, but the government has not yet placed any vaccine orders. It has not funded manufacturers to increase production capacity to obtain successful vaccines, as the United States did during Operation Distortion Speed. For Isola, this is understandable. SII has received a lot of funds from other places to equip itself. "The United States has money to spend," she said. "You can't put India on the same stand."

But the two former Indian government officials were tougher, accusing the government of inaction. One of the officials said: “Any fool can sit on a supply and demand list and figure out what the population is and how much dose we need.” “Poonawalla has always said that he needs money to expand. We should call him in September. Called and ordered vaccines and said,'This is an advance payment of 4,500 crore rupees ($640 million). Let's do it. But we hesitated." However, the official also wanted to know, given that SII has $800 million—" More than enough"-can put into its operation, why Poonawalla always asks for money. Modi views criticism of his government's handling of vaccines as "politics," saying his strategy is similar to that of other countries.

Although India’s resources are certainly not as good as those of the United States, it does have funds. The government has spent nearly US$3 billion on the development of new parliament buildings, including a magnificent prime minister’s residence. Even during the second wave of 2021, work on the project continued: workers were declared "essential" and were required to wear masks to work, although in many cases they were not paid. (In a response to the Indian news site Scroll, a government spokesperson said: "Only key activities are going on.")

Indian regulators approved the use of SII's AstraZeneca vaccine called Covishield. (They also approved Covaxin, another vaccine developed by an Indian company called Bharat Biotech.) Soon after, India placed its first order-an outrageously small order with only 11 million doses of Covishield And 5.5 million doses of Covaxin. Balasubramaniam estimates that to achieve herd immunity within a year, considering a 5% wastage rate, India will need approximately 200 million doses of vaccine per month.

By then, the pandemic had subsided in India so much that the government didn't even seem to anticipate that the entire population would have to be vaccinated like in many other countries. In fact, at the Virtual Davos Summit in the same month, Indian Prime Minister Narendra Modi (Narendra Modi) announced that India has decisively won the battle against the coronavirus. In doing so, he ignored the parliamentary panel report, which predicted a serious second wave. Another group of scientific experts will once again warn the government of the surge in diseases that will sweep the country in two months; they will also find themselves ignored. A healthcare expert who requested anonymity described the government's attitude as "ignorance plus arrogance."

SII sells its first batch of vaccines to the government at a price of approximately 210 rupees (3 US dollars) per dose. Poonawalla later admitted that this price made SII profitable. (AstraZeneca has promised not to profit from its vaccines during the pandemic. But SII did not clarify whether this extends to its own AstraZeneca vaccine sales.) Balasubramaniam suspects that the cost of producing a single dose is about Rs 30.

In late January, a fire broke out on the fifth floor of a building under construction on the SII campus. Poonawalla said that the accident will not harm Covishield's production, but will only affect the expansion of vaccine programs for other diseases.

Another month, another small order. India requested an additional 10 million doses of Covishield and 4.5 million doses of Covaxin. So far, SII claims to be able to produce approximately 60 million doses per month. India has exported tens of millions of such vaccines to other countries, although by March the cases had climbed again.

When the UK began to lack AstraZeneca vaccines, the company imported 5 million doses from SII. This seems to violate the agreement between SII and Covax that in addition to supplying India, the company will give priority to the production of Covax for low-income countries. As part of a secret exchange between the British government and AstraZeneca, the SII vaccine entered the UK.

These 5 million doses could have been shipped to India or other countries where vaccination programs are still struggling. A Gavi spokesperson stated that as of April, Covax had provided approximately 29 million doses of vaccine from SII to target countries. This is just over one-tenth of the 200 million capacity that SII has promised to supply in 2021; it is behind schedule. WHO Director-General Tan Desai said that as of the same month, only 0.3% of vaccines vaccinated globally were used in low-income countries.

With the arrival of the second wave of the epidemic, India finally placed its first major vaccine order: 100 million doses of Covishield and 20 million doses of Covaxin. It also took action to curb vaccine exports and redistributed most of its supplies to its citizens. Seth Berkley, CEO of Gavi, said: “We had expected that there would be about 90 million vaccine doses in March and April, but we suspected that we would get more and fewer doses. one question."

Poonawalla asked the government to allocate US$403 million to expand his production capacity to 100 million doses per month and to meet new orders from India.

According to his own statement, he has expanded his manufacturing scale to that capacity, so this is a puzzling new attraction. On the one hand, Poonawalla now claims that the fire on his campus in January hindered his Covishield production goals, which contradicts his previous statement. But through one of his other companies, he just bought a 60% stake in a financial services company for about $500 million-a move that has nothing to do with the pandemic, but it shows that he is financially sound. In a few weeks, he will announce an investment of US$333 million in a new research facility in the UK.

"It's like blackmail," Isola said of Punawara's request. “The country is facing huge public pressure, the pandemic is getting worse, people are clamoring to open vaccination to all ages. The private sector is asking for permission to sell vaccines.” She said, considering how much Poonawalla has raised Funds, this is "a heinous request".

The government provided SII with US$403 million as an advance payment for vaccine orders. (For the same purpose, it also provided Covaxin manufacturer Bharat Biotech with US$214 million.) But given the US$800 million raised by SII last year, no one seems to understand how it needs more funding. "I mean," Neelakantan, a lawyer in the pharmaceutical industry, said with a wry smile, "I guess they didn't just deposit it in a fixed deposit." When SII tried to sell its drugs to the Indian state governments at 400 rupees per dose. When it further increased its profit margins, it caused an uproar. As a "charity gesture", Poonawalla reduced it to 300 rupees.

Aisola said that the government also allows SII to be sold directly to private hospitals, and a couple has started to promote injections at 800-900 rupees. From a systemic point of view, there is now an incentive for SII to sell its products to the private sector first in order to increase its own profits. Aisola pointed out that India has transformed from a supplier of low-cost vaccines to a consumer of one of the most expensive Covid-19 vaccines in the world.

In addition, Poonawalla claimed that US restrictions on the export of vaccine raw materials are hindering SII's plan to produce another vaccine production line developed by Novovax. Subsequently, as the second wave intensified, the United States lifted the legal barriers surrounding these exports. But the Biden administration did not distribute excess vaccines, nor did it grant broader licenses to produce vaccines developed in the United States.

On April 30th-the exact year when Oxford and AstraZeneca announced the transaction-Adrian Hill company Vaccitech, which holds vaccine patents, was listed on the Nasdaq with a valuation of approximately US$464 million. The company's single largest shareholder is a company founded by Oxford University to take advantage of the university's innovations. It is itself partly owned by asset management companies, sovereign wealth funds and Chinese conglomerates.

While India was registering about 400,000 new cases every day, Poonawalla temporarily evacuated to London on the grounds of aggression and threats by the Chief Minister and corporate executives. He told reporters that the Indian government did not place enough orders to guarantee a further increase in production: as a result, there was a shortage.

However, Poonawalla quickly retracted his statement. He said that SII is working closely with the government to produce vaccines for all of India "not easy." On the same day, the Indian government announced a new vaccine purchase: 110 million doses of Covishield and 50 million doses of Covaxin, prepaid and delivered by July. In total, India has ordered nearly 350 million doses of vaccines: enough for 175 million people, about 12% of the Indian population. The government claims that this is a new phase of India’s vaccine strategy and will lead to “expansion of vaccine coverage”.

If vaccine shortages persist, India still has many options. In one extreme case, the government can completely ban exports, forcing SII to use all of its production capacity for the domestic market. "This is a precedent," Neelakantan said. "AstraZeneca knows that it cannot win a legal battle with SII in the UK." The government can order SII to stop producing Novovax and other vaccines and focus on Covishield; it can use the World Trade Organization to provide An exception to the “compulsory license” allows other Indian companies to produce Covishield, regardless of whether AstraZeneca agrees.

But Nila Kantan said these are all nuclear options. Even setting aside this, India can force other domestic manufacturers to temporarily "loan" their factories to SII: "Just say,'In the next six months, we will apply serum to this factory', and then Start manufacturing there.” The government can also force Bharat Biotech, the producer of Covaxin, to license it to other Indian manufacturers—especially because the government agency Indian Medical Research Council plays an important role in developing vaccines and co-owns its intellectual property.

At least a dozen other companies and institutions have the resources to expand the production scale of Covishield or Covaxin. "They are mature facilities, and they will know what to do," Neelakantan said. "If we did this in December, then we have the product now. On the contrary, the government was very satisfied with itself in January, thinking it had gotten rid of Covid, and had no plans at all."

Correction: The Indian government paid SII US$403 million as an advance payment for vaccine orders. An earlier version of this article described it as a grant.

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