A bad look

Due to an ongoing investigation of 'irregularities' in Brazil's USD 324 million deal for India's Covaxin shot, the contract has now been suspended. Vaccine manufacturer Bharat Biotech released a statement following this suspension saying that it had not received any advanced payment and that the procurement of Covaxin by Brazil was done through a 'step-by-step' approach. To briefly recall the events that led up to this moment, the Brazilian health ministry struck up a deal in February this year for 20 million doses of Covaxin to be imported from India at USD 324 million. This effectively put the per-dose cost of the vaccine to be around USD 15. Head of medical imports at the Brazilian health ministry, Luis Ricardo Miranda found many red flags in this deal early on. First, the price that was being quoted for USD 15 per dose was far higher than what Brazil was paying for other already approved vaccines. Indeed, reports say that Bharat Biotech had quoted a price of USD 1.34 per dose but for whatever reason, a price of USD 15 was fixed. 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 some history of irregularities in fulfilling government contracts. Fourth, and perhaps most unusual, was the involvement of yet another company by the name of Madison Biotech in Singapore. An invoice reached Luis Ricardo Miranda's desk at some point for an advanced payment of USD 45 million to Madison Biotech. Considering that the company had not previously been listed anywhere in the purchase contract, this was finally the one irregularity that made Miranda take serious note of the deal and its irregularities. According to statements he made later, he brought up the irregularities in the deal that had been identified with President Jair Bolsonaro. While Bolsonaro had promised action, nothing was done for several months until details of the deal became a part of two parallel investigations by federal prosecutors and the Brazilian Senate. The angle being investigated, particularly in the Senate, is whether Bolsonaro and/or his associates profited off this irregular deal in any way. For now, both Bolsonaro and his health ministry have denied any wrongdoings but given that Bolsonaro is already under investigation for his disastrous Covid response, his denial of wrongdoing does not mean much for investigators. But what about Bharat Biotech and Covaxin? As mentioned above, the company has tried to make a clean break from the deal and claimed it followed standard procedure in negotiating the deal. Till now, there is no evidence to suggest any wrongdoing on the company's side and neither of the two investigations has currently uncovered such an angle. But even given all that, this deal suspension and the scandal that caused it is a bad look for Bharat Biotech. Covaxin is a critical part of India's vaccine diplomacy abroad as it is India's own COVID shot. Considering that India's second wave of COVID infections and resulting vaccine shortages already significantly derailed the country's vaccine diplomacy plans, the Covaxin scandal in Brazil is not easily afforded. It doesn't help that the term 'Covaxingate' was trending on Brazilian social networks and beyond. It is also possible that further investigations in Brazil could throw an unflattering light on Bharat Biotech's relation with Madison Biotech. Just this week, the Brazilian Senate is debating the proposal to unlock the bank records of Madison Biotech. Regardless of its assertions of no wrongdoing, Bharat Biotech is likely to face intense scrutiny in Brazil where Covaxingate has become a dominant fixture of news cycles. It is hard to say at the moment what this could mean for the company and India's vaccine diplomacy plans at large. The company is currently applying for WHO approval of its vaccine and has also approached the US for starting the process of fully authorising Covaxin in the country. It is a time for transparency and effective communication on the part of Bharat Biotech so that it could remove the hovering cloud of potential bad-naming. Perhaps the company could set its Public Relations department in action to avoid any possible damages.