A bad look


Due to an ongoing investigation into “irregularities” in Brazil’s $ 324 million deal for Indian shot Covaxin, the contract has now been suspended. Vaccine maker Bharat Biotech issued a statement following the suspension stating that it had not received any advance payment and that Brazil’s purchase of Covaxin was done on a “step-by-step” basis. To briefly recall the events leading up to this moment, the Brazilian Ministry of Health reached an agreement in February of this year to import 20 million doses of Covaxin from India for $ 324 million. This effectively put the cost per dose of the vaccine at around $ 15. Head of medical imports at the Brazilian Ministry of Health, Luis Ricardo Miranda found many red flags in this agreement early on. First, the price offered for USD 15 per dose was much higher than what Brazil was paying for other already approved vaccines. Indeed, reports indicate that Bharat Biotech had offered a price of $ 1.34 per dose but for some reason a price of $ 15 was set. Second, the deal was approved at a time when Covaxin had not been approved by the Brazilian drug regulator ANVISA for use. Third, the company involved in the purchase as an intermediary was Precisa Medicamentos, a company with a history of irregularities in the performance of public contracts. Fourth, and perhaps the most unusual, was the involvement of another company by the name of Madison Biotech in Singapore. An invoice reached Luis Ricardo Miranda’s office at one point for an advance payment of $ 45 million to Madison Biotech. Considering that the company was never listed anywhere in the purchase contract, it was ultimately the only irregularity that caused Miranda to take serious note of the deal and its irregularities. According to statements he made later, he referred to the irregularities in the agreement that had been identified with President Jair Bolsonaro. While Bolsonaro had promised to act, nothing was done for several months until details of the deal became part of two parallel investigations by federal prosecutors and the Brazilian Senate. The angle under investigation, particularly in the Senate, is whether Bolsonaro and / or his associates profited from this irregular deal in any way. For now, Bolsonaro and his Department of Health have denied any wrongdoing, but given that Bolsonaro is already under investigation for its disastrous response to Covid, his denial of wrongdoing doesn’t mean much- thing for investigators. But what about Bharat Biotech and Covaxin? As mentioned above, the company tried to break the deal for good and claimed it followed standard procedure to negotiate the deal. So far, there is no evidence to suggest wrongdoing on the part of the company, and neither of the two investigations has currently uncovered such an angle. But even given all of this, this suspension of the deal and the scandal that sparked it is a bad look for Bharat Biotech. Covaxin is a critical part of India’s vaccine diplomacy overseas as it is India’s own COVID vaccine. Considering that India’s second wave of COVID infections and the resulting vaccine shortages have already significantly derailed the country’s vaccine diplomacy plans, the Covaxin scandal in Brazil is not easily affordable. It doesn’t help that the term “Covaxingate” is all the rage on Brazilian social media and beyond. It is also possible that other investigations in Brazil shed an unflattering light on Bharat Biotech’s relationship with Madison Biotech. This week again, the Brazilian Senate is debating the proposal to unblock Madison Biotech’s banking files. Regardless of its claims of no wrongdoing, Bharat Biotech is likely to come under scrutiny in Brazil, where Covaxingate has emerged as a dominant feature in news cycles. It is difficult to say at this time what this might mean for the business and India’s vaccine diplomacy plans in general. The company is currently seeking WHO approval for its vaccine and has also approached the United States to initiate the full approval process for Covaxin in the country. Now is the time for transparency and effective communication from Bharat Biotech so that it can eliminate the hovering cloud of a potential misname. Maybe the company could put their PR department into action to avoid any possible damage.


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