India and Its Vaccine Maker Stumble Over Their Pandemic Promises

NEW DELHI — Adar Poonawalla made big promises. The 40-year-old chief of the world’s largest vaccine maker pledged to take a leading role in the global effort to inoculate the poor against Covid-19. His India-based empire signed deals worth hundreds of millions of dollars to make and export doses to suffering countries.

Those promises have fallen apart. India, engulfed in a coronavirus second wave, is laying claim to his vaccines. Other countries and aid groups are now racing to find scarce doses elsewhere.

At home, politicians and the public have castigated Mr. Poonawalla and his company, the Serum Institute of India, for raising prices mid-pandemic. Serum has suffered production problems that have kept it from expanding output at a time when India needs every dose. He has come under criticism for departing to London amid the crisis, though he said it was only a quick trip. He told a British newspaper he had received threats from politicians and some of India’s “most powerful men,” demanding that he supply them with vaccines. When he returns to India, he will travel with government-assigned armed guards.

In an interview with The New York Times, Mr. Poonawalla defended his company and its ambitions. He had no choice but to hand over vaccines to the government, he said. He cited a lack of raw materials, which he has partially blamed on the United States. Making vaccines, he said, is a painstaking process that requires investment and major risks. He said he would return to India when he had finished his business in London. He shrugged off his earlier comments about threats, saying they were “nothing we can’t handle.”

But he also acknowledged that the Serum Institute alone doesn’t have the capacity to vaccinate India anytime soon, much less shoulder the burden of inoculating the world’s poor.

“The problem is nobody took the risk that I did early on,” he said. “I wish that others did.”

His position represents a dramatic turnabout for Serum and the Indian government. In January, when India launched its own vaccination program while also beginning exports, Prime Minister Narendra Modi pledged its vaccines would “save humanity.”

Instead, the unfolding tragedy has made it clear that India — even with the world’s largest vaccine maker at its disposal — cannot save itself.

India’s long-term vaccination prospects improved after the Biden administration on Wednesday backed waiving intellectual property protections for vaccines, which could make it easier for Indian factories to make them. Still, that won’t help India’s current crisis, which as of Friday had claimed more than 230,000 lives — a figure that likely represents a vast undercount.

Serum won Mr. Modi’s favor in part because it fit the government’s narrative of a self-reliant India that was ready to take its place among the world’s major powers. Now both Mr. Modi’s government and Serum have been humbled, and their ambitions are being called into question.

“Our capacity is extremely poor,” said Manoj Joshi, a fellow at the Observer Research Foundation in New Delhi, which focuses on Indian policymaking. “We are a poor country. I hope that we can build some humility into the system.”

Mr. Poonawalla took the reins of the Serum Institute a decade ago from his father, Cyrus, a horse breeder turned vaccine billionaire. Before the crisis, he was extolled in the Indian media as an example of a new class of young, worldly entrepreneurs. Photos of him and his wife, Natasha, were a staple of fashion spreads.

Last year, Serum struck a deal with AstraZeneca to produce a billion doses of its Oxford-AstraZeneca vaccine, called Covishield in India. Serum received a $300 million grant from the Gates Foundation to supply as many as 200 million doses of Covishield and another vaccine in development to the Gavi Alliance, the public-private partnership that is overseeing Covax, the program to donate vaccines to poor countries.

Serum pledged between January and March to sell about 1.1 billion vaccine doses in coming months, according to a review of purchase agreements supplied by UNICEF. By the time India largely stopped vaccine exports, Serum had exported only about 60 million doses, about half to Gavi. India had claimed more than 120 million.

Since then, AstraZeneca has served Serum a legal notice over delivery delays. Serum has just “temporarily deferred” its commitments, Mr. Poonawalla said, citing the Indian government’s halt of exports.

“This is something coming from India,” he said. “It’s not the supplier that is defaulting.”

The world is grappling with the ripple effect. A spokesman for Gavi said that India’s decision to prioritize “domestic needs” is having “a knock-on effect in other parts of the world that desperately need vaccines.” Still, in a sign of the lack of options for getting vaccines, Gavi on Thursday signed a purchase deal with an American vaccine company, called Novavax, involving doses to be made by Serum.

Nepal, India’s northern neighbor, changed its procurement law to pay Serum an 80 percent advance, or roughly $6.4 million, to purchase two million doses of Covishield. Serum delivered the first million doses but is offering Nepal its money back for the second million, said Nepal’s health department director, Dr. Dipendra Raman Singh. Nepal has refused, in hope of getting more doses as India’s catastrophe bleeds across their border.

Some of India’s needs are self-inflicted. It is manufacturing only two vaccines, Serum’s Covishield and one developed in India. A government deal to produce Russia’s Sputnik V in India has been tangled in red tape. If other manufacturers had started earlier, Mr. Poonawalla said, Serum might not face as much pressure.

Serum’s failure to deliver is also AstraZeneca’s, since it pledged with Oxford University that the vaccine would be made available to countries that couldn’t afford it.

“I felt very sad that we couldn’t continue helping them, but don’t forget my first priority comes to my nation first, which has given me everything,” Mr. Poonawalla said. “And after all, I am an Indian. I may be a global Indian company, but the fact is that we are in India. We need to take care of our own, like America has taken care of their own, Europe is taking care of their own.”

But Serum can’t meet India’s needs, either.

Serum’s plans were to split its doses 50-50 between India, either directly or through Covax, and the rest of the world. Now, Serum is contributing 90 percent of India’s supply and is still falling short. Less than 3 percent of the population has been fully inoculated. In some states, people are being turned away from vaccination centers that have run out of doses.

Serum has missed its expansion targets. Mr. Poonawalla said last fall that by early this year, Serum Institute would be pumping out 100 million doses per month, of which about four in 10 would go overseas.

But after a fire at a facility that was supposed to help the company ramp up vaccine production, Serum’s capacity has remained at about 72 million doses per month. A grant of more than $200 million from the Indian government should help the company reach its goal by summer, he said.

Understand the Covid Crisis in India

    • What to Know: Shortages of oxygen and hospital beds, along with low vaccination rates, have added to the surge in illness and deaths in India.
    • Case Counts: Experts say the true death count far exceeds official figures. This chart illustrates how known Covid cases have grown over the last few months across the country.
    • Travel Bans: The U.S. has begun to restrict travel from India, and Australia has banned all incoming travel from the country, including among its own citizens.
    • How to Help: Donors around the world are giving money for meals, medical expenses, P.P.E. and oxygen tanks, among other essential supplies.

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