Brazilian Health Minister Tuesday announced the suspension of a $324 million contract with the Indian company Bharat Biotech.
At a time when a parliamentary inquiry has been initiated against the Brazilian government over allegations of corruption and irregularities in its vaccine deal with Bharat Biotech, the country’s health minister Tuesday announced the suspension of a $324 million contract with the Indian company.
Marcelo Queiroga, the health minister, made the announcement about the suspension of the Covaxin deal. He added that his team would probe the allegations during the period of the suspension of the contract.
“According to the preliminary analysis of the CGU, there are no irregularities in the contract, but for compliance, the health ministry chose to suspend the contract,” a statement from the ministry read.
What Was The Deal?
In January 2021, Covaxin maker Bharat Biotech signed an agreement with Precisa Medicamentos, a firm in Brazil, to supply the COVID-19 vaccine candidate to the Latin American country.
“In principle, it is understood between both parties that supplies of Covaxin [is] to be prioritised for the public market, through a direct procurement by the government of Brazil. Supplies to the private market would be based upon receipt of market authorization from ANVISA, the Brazilian regulatory authority,” a release from Bharat Biotech said.
On 25 February 2021, Bharat Biotech International Limited announced that the company has signed an agreement with Brazil for the supply of 20 million doses of its covid-19 vaccine COVAXIN.
“The company has signed an agreement for delivery of COVAXIN®️ during Q2 and Q3 2021. The company is delighted to partner with Brazil in its battle against Covid-19 and aid its immunization program against the virus,” Bharat Biotech said in a statement.
A 1.6 billion reais ($323 million) deal for 20 million doses of COVAXIN was signed by the Brazilian government and Bharat Biotech, with the first batch of 8 million doses expected in March.
Regulatory Issues
On 1 April 2021, the Brazilian health regulator Anvisa – short for Agência Nacional de Vigilância Sanitári – denied a request to import doses of Covaxin, made in India by Hyderabad-based pharma company Bharat Biotech, for use in the nation’s COVID-19 vaccination drive.
This move by Brazil’s regulator came after it had also denied a certificate of good manufacturing practices to Bharat Biotech on March 30.
Bharat Biotech had failed to comply with manufacturing standards, including not adhering to demands for documentation and maintaining the integrity of containers and methods of analysis, as per a report by The Wire Science.
In its statement, Anvisa said that if these issues persist, the vaccine’s quality could be affected and thus potentially endanger its recipients. The statement also said that Bharat Biotech’s action plan also seemed insufficient in the face of the quality issues.
Covaxin is yet to receive approval for public use, although it has received permission to conduct a phase 3 clinical trial via a Brazilian partner company.
Where did it go wrong?
After the deal signed in February, the comparatively high prices for Covaxin, which had not cleared regulatory hurdles, drew prosecutors’ attention to the deal. Brazilian federal prosecutors began an investigation into the deal on 24 June.
According to a document sent to AP by the prosecutor general’s office, the health ministry has to pay $320 million (Rs 2,375 crore approximately) to Precisa Medicamentos, the intermediary for Bharat Biotech in Brazil. Each dose costs $15.
The amount was significantly higher than what the health ministry paid for American pharmaceutical giant Pfizer’s vaccine, which had obtained regulatory approval.
Health ministry officials also did not take into account Precisa’s history of alleged irregularities in previous contracts with the federal government. “The history of irregularities involving Precisa partners and the high price paid for the contracted doses require a thorough investigation in both civil and criminal matters,” federal prosecutor Luciana Loureiro Oliveira said on June 16.
The contract also drew attention from the Brazilian Senate Commission. “It has drawn our attention because it is an unusual acquisition in all aspects,” said Senator Renan Calheiros, the commission of inquiry rapporteur. “So, we will have a week to go deeper into everything that happened in the background.”
The panel, which is also investigating the government’s handling of the pandemic, has documents to show that Bolsonaro’s government aggressively pushed for a contract with Bharat Biotech, according to The Wire.
Miranda Brothers
Luis Ricardo Miranda, the whistleblower who worked at the logistics department of the Health Ministry, raised suspicions about the vaccine deal with India’s Bharat Biotech. He is the brother of Congressman Luis Miranda.
On Friday, Congressman Luis Miranda arrived at a Senate commission inquiry. He was wearing a bullet-proof jacket for safety.
According to the Miranda brothers, they met with Bolsonaro in March and said they warned him of the suspicious contract, but that nothing was done to investigate the deal.
Head of imports at the Ministry, Miranda told senators he refused to approve an import license because an invoice for a first shipment asked for up-front payment and was sent by a company not mentioned in the contract, Singapore-based Madison Biotech.
Alex Lial Marinho, an aide to one of Bolsonaro’s closest allies, former Health Minister Eduardo Pazuello, pressurized him, Miranda told prosecutors. Both Pazuello and Bolsonaro face inquiries with similar charges relating to the mismanagement during the pandemic.
The Senate inquiry coordinator has called for protection for the Miranda brothers, and also for the owners of the Brazilian company Precisa Medicamentos.
“Incorruptible” Bolsonaro
Far-right leader and President Jair Bolsonaro, who’s under growing pressure to explain the deal with Bharat Biotech, said on Friday that there were no irregularities in the contract for the Indian drugmaker’s Covaxin shot.
“There is nothing wrong with the Covaxin contract, there is no overpricing,” he said at a news conference.
Bolsonaro added that his enemies were trying to stain his government with unfounded accusations of corruption.
“I am incorruptible,” Bolsonaro declared.
Earlier on Thursday, he said Brazil never paid for or received any doses of a coronavirus vaccine developed by Indian company Bharat Biotech.
“We didn’t spend one cent on Covaxin. We didn’t receive one dose of Covaxin. What sort of corruption is this?” Bolsonaro said.
Bharat Biotech On Allegations
Bharat Biotech, last week, said in a statement that it had yet to provide vaccine supplies to Brazil and that it has been consistent and transparent in its pricing with all governments.
“We strongly refute and deny any kind of allegation or implication of any wrongdoing whatsoever with respect to the supply of COVAXIN,” it said.
However, after the Brazilian government suspended the deal on Wednesday, Bharat Biotech said it followed a “step-by-step” approach for the regulatory approval and supply contract of its COVID-19 vaccine in Brazil, and that it has not received advance payments from the Brazilian health ministry.
Implications For Bolsonaro
Accusations against Bolsonarao that he turned a blind eye to possible corruption in a deal to purchase coronavirus vaccines have caused a great risk to the far-right leader’s Presidency. There are chances of a criminal charge being invoked against the President for his alleged inaction.
The charges have provided momentum to the opposition’s impeachment drive and may have caused discomfort for Bolsonaro’s allies in Congress, evaluating whether it is worth standing by the President.
While he faces massive protests in the streets in the last few weeks, Bolsonaro has called the Senate committee investigating the government’s Covid-19 response a “national shame” aimed at undermining his administration.
The nationally televised hearings for the last two months, where Bolsonaro’s handling of the pandemic has been probed, have significantly brought down his popularity.
The recent testimonies of the Miranda brothers have turned up the heat even more for Bolsonaro.
Admission of Guilt?
After frequently defending the contract with Bharat Biotech, Bolsonaro, and the Brazilian government suspended the contract. This came just a few days after Bolsonaro said that there were no irregularities in the contract.
“Incorruptible” Bolsonaro has now taken a step back by suspending the deal. However, whether the decision is an outcome of the mounting public pressure or whether it is an admission of guilt from the Brazilian government, only time will tell!
Till then, Bolsonaro must worry that this ‘little flu’ and its consequences may take away his Presidency.
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