Not Price Caps But By Increasing Production: How Centre Is Addressing Remdesivir Shortage

‘To meet the increasing demand of #Remdesivir and to enhance its availability and affordability, the Govt has capped its price (Sic)’, Union Health Minister Dr Harsh Vardhan tweeted yesterday. Obviously, this invited ridicule and scorn even from the supporters of the government who understand that price caps are no way to alleviate supply shortages and end up making matters worse especially in a crisis.

As it turns out that the Central government didn’t take any such action and the ones outraging were misled by Dr Harsh Vardhan’s wrongly worded statement. The ‘official memorandum’ shared by the minister makes it clear that the prices have been cut voluntarily by all the leading manufacturers/marketers of the Remdesivir injection in the country.

The revised prices compared to earlier MSP are as follow (per 100mg/vial)

One cannot help but credit the government’s intervention for reduction in prices by other manufacturers. Though there is no price cap officially, everyone ‘volunteered to reduce the price to less than Rs 3500‘. This seems to be an upper cap communicated by the government. No wonder, Hetero has priced its vial at Rs 3490.

However, the reduction in price ranges from a high of 67.89 per cent by Cadila Healthcare to low of 25 per cent by Cipla which clearly indicates that the adjustments have been done by the companies as per their own comfort. In fact, Cadila had decided to slash its prices to Rs 899 on 24 March itself.

A big reason for this step is increase in demand and the government’s decision to fast track approvals for more production at seven more sites by these manufacturers which will allow them to more than double the supply of injections in the market thereby meeting the demand at lower rates but without compromising their financials.

The Centre has been working to fix the supply shortage for more than a week now. On 11 April, Director General of Foreign Trade had declared a ban on export of Remdesivir‘s API and formulation. This is set to divert four lakh additional vials for domestic market. On meetings held by the government on 12 and 13 April with manufacturers, it provided fast-track approval for seven additional sites with production capacity of 10 Lakh vials /month to six manufacturers.

This will help ramp up the production capacity currently from 38 lakh vials per month to around 78 lakh vials/month in future. Right now, Hetero can produce 10.50 lakh, Cipla 6.20 lakh, Zydus Cadila 5 lakh and Mylan 4 lakh vials per month.

The two-fold increase from current levels is going to be achieved sooner than later. Already, supplies have increased to 2,06,000 on 15 April from just 67,900 vials on 11 April. This jump has come in matter of four days. From May onwards, India should be producing close to nine million vials per month. This would be quite a leap from normal production output of 27-29 lakh vials per month in January-February.

”We have already started producing around 1.5 lakh vials per day which will increase to 3 lakh vials per month within next 15 days. Apart from present 20 plants, permissions have been given to another 20 to start production,” Minister of State for Chemicals and Fertilisers Mansukh Mandaviya informed via a video message he posted on Twitter today.

“We are making every effort to ensure that Dr Reddy’s remdesivir, sold under the brand name Redyx, reaches as many patients in India as possible. We are ramping up production and are also bringing to market a liquid product that is faster to make and supply," the company said as it slashed prices of its vial by half.

“Sun Pharma, in collaboration with Syngene, is increasing capacity for remdesivir to fulfil the increase in demand. Sun Pharma has already increased the production and is now manufacturing remdesivir at two plants. The decision to add one more manufacturing site was taken recently to help boost our production," Sun Pharma’s representative said.

Earlier, Dr Harsh Vardhan had informed that the reason behind shortage was reduction in the production of Remdesivir due to fall in COVID-19 cases. Many manufacturing units had completely stopped its manufacturing due to lack of demand. But due to sudden increase in case load, the demand has skyrocketed and supply will take some time to catch up.

Remdesivir was first manufactured in 2014 by Gilead Sciences Inc. of the USA and was originally intended for treating Ebola virus. It was later used in treatment of Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS). It is now being used to treat patients ill with SARS CoV-2 even though some experts, including the World Health Organisation, have doubted its efficacy in curing Covid-19.

Designed to attack the replication of the virus (and subsequent copies of the same), Remdesivir came to India last year after the Drug Controller General of India approved its emergency use on 1 June and companies like Cipla, Mylan, Dr Reddy’s Laboratories, Hetero Healthcare, Jubilant Generics and Zydus Cadila tied up with Gilead to manufacture generic versions of remdesivir under a voluntary licence.