World’s largest vaccine maker says it is slashing production by half until it receives more orders

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Serum Institute produces AstraZeneca vaccines under the label Covishield  (Image/Stuti Mishra)
Serum Institute produces AstraZeneca vaccines under the label Covishield (Image/Stuti Mishra)

Serum Institute of India (SII), the world’s largest vaccine producer, has said it will halve its production of AstraZeneca Covid-19 vaccines from next week because it doesn’t have enough orders, either from India or other governments.

The company produces AstraZeneca vaccines under the label Covishield, which constitutes 90 per cent of the Covid vaccine doses administered in India. The company had increased its production rapidly to meet the growing demand during the pandemic, when India faced severe shortages.

But the CEO of the pharmaceutical giant, Adar Poonawalla, told Indian media outlets on Tuesday that his company was now looking at reducing production because there was more supply than demand — a “dilemma” he had never imagined.

“I am going to be reducing production by at least 50 per cent to begin with, going forward on a monthly basis, until orders again pick up either in India or the world,” Mr Poonawalla told CNBC TV18.

The company announced only last month that it planned to resume vaccine exports, which had been halted for a long time due to India’s devastating second wave in April and May. It had also announced that it reached its goal of producing one billion doses of Covishield by the end of the year.

Though India was dealing with a vaccine shortage a few months ago, Mr Poonawalla said that his company does not have any future orders.

“I am actually in a dilemma that I never imagined... we are producing 250 million doses a month but the good news is that India has covered up a large part of its population and we [will] have completed all our orders to the Ministry of Health in a week’s time,” Mr Poonawalla said.

The company also exports vaccines to other nations, especially to lower and middle income countries under the international vaccine-sharing alliance Covax. However, Mr Poonawalla said that he lost a significant number of orders during the Indian government’s ban on exporting vaccines during the second wave.

“Over the eight months when we could not export, other countries managed vaccine supplies from donations from the US and elsewhere and we have lost a lot of market share,” he said, adding that the company would need to wait another season for orders to pick up.

The falling demand for vaccines in India comes as a surprise because the country has only managed to fully vaccinate 35 per cent of its massive 1.4 billion population so far. If only the adult population is considered, only a little more than 50 per cent have been fully vaccinated, indicating that India still has a long way to go.

Fears of the highly-mutated omicron variant, of which India has reported 23 cases so far, have led to calls for booster doses around the world.

But the Indian government is yet to announce if booster jabs will be administered to Indians and has said that its expert committee is studying the need for additional vaccine doses.

“I am actually in a dilemma that I never imagined... we are producing 250 million doses a month but the good news is that India has covered up a large part of its population and we would have completed all our orders to the Ministry of Health in a week’s time”

Adar Poonawalla, CEO, SII

Lack of clarity by the Indian government over booster doses has led to questions from vaccine manufacturers. Both Mr Poonawalla and Sputnik’s Indian distributor, Dr Reddy’s Laboratories, have approached the health ministry to understand its requirements.

While SII gets the majority of orders in India, about 1.2 million doses of Sputnik V have been administered in the country, government data showed.

Dr Reddy’s is now worried about the rest of its stock.

India had approved Sputnik V in April, yet it is still not yet widely available. The vaccine has not yet been approved by the World Health Organisation either.

“We are talking to the regulator to allow it as a booster dose,” GV Prasad, the managing director of Dr Reddy’s, said in a recent interview about the single-dose Sputnik Light. “Right now, there’s no demand, the market is fully supplied by the Serum Institute. Internationally also, supply is not a constraint anymore.”

The Reuters news agency on Wednesday cited a source with direct knowledge of the decision as saying that another pharma company that was supposed to produce more than 100 million Sputnik doses has put the plan on hold without making a single commercial dose.

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