The Daily - The Struggles of India’s Vaccine Giant

Episode Date: June 24, 2021

When the coronavirus hit, the Serum Institute of India, the world’s largest vaccine maker, seemed uniquely positioned to help. It struck a deal with AstraZeneca, promising a billion vaccine doses to low- and middle-income nations. Earlier this year, a ban instituted by Prime Minister Narendra Modi put a stop to those plans. What has that meant for the nations promised millions of doses?Guest: Emily Schmall, a South Asia correspondent for The New York Times based in New Delhi. Sign up here to get The Daily in your inbox each morning. And for an exclusive look at how the biggest stories on our show come together, subscribe to our newsletter. Background reading: The Serum Institute vowed to protect its country from the coronavirus and inoculate the world’s poor, but India’s crisis has pushed it past its limits.Big-power muscle flexing helps explain many of the world’s vaccine inequities, but there’s another problem: The manufacturing challenge is unprecedented.For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday. 

From The New York Times, I'm Michael Barbaro. This is The Daily. Today. With plenty of vaccine available, COVID is now in retreat in North America and also in Europe, but not so in the global south. While the United States has vaccinated almost half its population and begun to fully reopen. Nepal is experiencing a devastating wave of COVID-19. Bangladesh is also dealing with a rise in coronavirus. Dozens of countries are lagging far behind.

In South Africa, for example, only 1% of the population has had their first jab. It turns out a big reason why is that they were all counting on a single vaccine maker in India. There are many people here in India who believe that the Serum Institute and the government overpromised when it came to those commitments for vaccines. Kevin Roos spoke with our colleague, Emily Schmall, about what went wrong. It's Thursday, June 24th. Emily, tell me about the Serum Institute.

So the Serum Institute is located in Pune, which is a city in central India. Hello and welcome. We're inside the Serum Institute, the world's biggest manufacturer of vaccines. And it's the world's largest vaccine maker. Produced by this man, Dr. Cyrus Poonawalla, who was a very wealthy horse breeder. Horses, cars, or the Institute? What's your first love? In my college days, it was cars. Later on, because of family inheritance, it was horses. Passion is still there very much.

And he had been loaning his horses to other companies to make serum, which is often used to make vaccine, until he realized he could do it himself. And sort of thus was the origin of this massive vaccine empire. Huh. Joining us now, the Serum Institute CEO. Adar Poonawalla, fantastic search. About a decade ago, his son, Adar Poonawalla, took over. Nice to speak with you again, Julia.

You know, a lot of people have heard about us and our capabilities and our vital role in this. And when you say massive vaccine empire, like how big are we talking? So Serum Institute makes a huge amount of vaccines. Today we are supplying to almost 170 countries more than 1.5 billion doses every year. They actually produce 1.5 billion doses of vaccines every year. And these are vaccines that go everywhere around the world. So they make tetanus vaccines, polio vaccines, measles, mumps and rubella vaccines.

They estimate that... About 65% of the world's children have taken at least one of their vaccines. So when the coronavirus pandemic hit, Adar and his dad Cyrus thought that this was the perfect opportunity for Serum Institute to get in early and to make a vaccine that could reach every corner of the world. and to make a vaccine that could reach every corner of the world. And how did the Serum Institute take on this massive challenge of making and distributing COVID vaccines all over the world? So in the spring of 2020, the Serum Institute is looking around.

There are all of these vaccine candidates in various stages of clinical trials all over the world. And they know they want to partner, not develop a vaccine in-house, but partner with a research organization or a big pharma company that is developing its own vaccine. So they find this Oxford AstraZeneca vaccine that's in clinical trials in the UK, and they think they've found a winner. Why do they think that? What is it about this AstraZeneca vaccine that they like? So this vaccine candidate, unlike most other candidates, doesn't require ultra-cold storage, which they know a lot of countries in the world don't have. They also think that they can make this vaccine cheaply and quickly. And by the summer, AstraZeneca has signed a deal with the Serum Institute for them to start manufacturing this vaccine in huge quantities.

AstraZeneca wants Serum Institute to produce a billion doses, but the contingency in the agreement is that these doses will be destined to low- and middle-income countries, like India, like South Africa, like many parts of the world. But the goal is explicit in the agreement that the doses made in India are meant for the developing world. It's a huge endeavor. And in fact, Serum says they have to put in about $450 million of their own money up front to finance this. Wow. And this is before the effectiveness of the vaccine is actually known yet. So this is a huge risk they're taking, right? That's right. Yeah. This is months before any country in the world has authorized the AstraZeneca vaccine for emergency use. And what is the Serum

Institute getting out of this? Why are they taking such a big risk? So they agree with AstraZeneca that they're going to make a billion doses for the world's developing countries. But after that, all bets are off. And the Serum Institute at that point can sell the same vaccine commercially for the prices it decides to sell them for. So they see a huge potential upside. And this is a chance for Adar Poonawalla and the Serum Institute to really shine. And it coincides really nicely with what the Indian government wants. nicely with what the Indian government wants. I want to reiterate that India stands in solidarity with the world.

Which is to make the world see that India has become a global partner. Our proven capacity to produce quality medicines and vaccines at low cost. Our own domestic experience in rapidly expanding immunization. These are all at the service of humanity. India wants to be the world's pharmacy, and the Serum Institute can help them do that. And countries are paying attention. So by the fall... Finally, the wait for the people of Bangladesh is coming to an end. India and Bangladesh have signed a crucial deal on vaccines against COVID-19.

Countries like Bangladesh and Bahrain and South Africa have placed their own orders for vaccine doses. Whenever the vaccine is ready, the Serum Institute will give Bangladesh 30 million doses in the first phase. And by the end of it, Serum Institute has a billion dollars in advance purchase agreements. Oh, wow. So at the same time, Adar Poonawalla makes a point that half of all the production is going to go to India. But something happens in India that fall,

which is that cases dramatically fall off. So Prime Minister Narendra Modi is pretty confident. In fact, he gives this speech at the World Economic Forum in Davos last January, where he says, that experts were predicting a tsunami of cases, but India successfully managed the outbreak. And that the coronavirus really was imposing so many problems. So India could afford to be generous.

And Mr. Modi starts buying doses and rather than putting them into India's vaccine program, starts giving them as gifts to countries in South Asia, countries in the Middle East, Africa, even the Caribbean, as a gesture of goodwill, but as a show of vaccine diplomacy and a show of strength. Huh. So rather than buying and distributing doses of this vaccine to Indian people,

to the people of his own country, Modi was instead focused on buying doses and then offering them to other countries, basically to elevate his own standing and India's standing, with the assumption being, of course, that COVID is mostly over in India and they don't actually need all those doses. Yeah, except then in late March. Let's take you to India now, where a severe second wave of COVID-19 is threatening to overwhelm the country's health systems. India's second wave of the coronavirus hits hard, it hits fast, and... The country has repeatedly shattered global daily records for infections. Hospitals face shortages of staff, beds, blood and oxygen.

And India is very quickly in a very bad place. People queue outside a vaccination center in Mumbai. Even though the country is a major coronavirus vaccine maker, many fear there is not enough to go around. So then... India has suspended all major exports of the AstraZeneca COVID vaccine following a surge in the number of infections in the country. The Modi government decides it's going to halt all exports of vaccine.

Officials said it was a temporary squeeze on exports due to the rising demand for the jabs inside India itself. And all of serum's capacity from late March will go to India. But certainly it's a move that will hit several countries given that the Serum Institute of India is the world's largest vaccine manufacturer. So the donations stop and so do the commercial deals that Serum has struck with all of these countries. It does seem like India's vaccine diplomacy is going to have to take a backseat at least

for now. So all these developing countries that had struck these deals, what I imagine must have felt like airtight deals with the Serum Institute for millions of doses of this vaccine, some of them have already started dispensing that vaccine. And now, because the Indian government needs these vaccines for itself and its own citizens, these countries have basically had the rug pulled out from under them.

Yeah, that's right. So in Nepal, which is one of the poorest countries in Asia, they bought 2 million doses of vaccine from the Serum Institute. And before March, they'd managed to give out about a million of these doses. But then when India institutes this export ban, Serum actually goes to Nepal and says,

we'll give you your money back. But Nepal says no, because they're holding out hope that they'll eventually get these doses they'd already paid for. So it seems like this action by the Indian government to ban vaccine exports must put the Serum Institute in a pretty awkward position. They've promised all these vaccine doses. They've signed these deals. Now they're having to renege on many of those deals. What's their response? Right. So my colleagues and I were pretty curious about that because we saw all of these people in and outside of India accusing the Serum Institute of falling down on the job, of failing.

accusing the Serum Institute of falling down on the job, of failing. And we wanted to know what it felt like for Adar Poonawalla, the CEO, who was, we were sure, you know, shouldering a lot of this burden. So we gave him a call. We'll be right back. So, Emily, tell me about this call with the CEO of the Serum Institute. Yeah, so it took a few weeks to organize. Obviously, Adar Poonawalla had a lot of people wanting to talk to him, and I was really excited to do it.

But then a couple days before the interview, I tested positive for COVID. Oh, wow. It would turn out that everything was fine, but during that time, I wasn't able to work. Just to let it clear, can you call me on WhatsApp or on FaceTime audio? Sure, yeah, I can do that. So my reporting colleague, Karan Deep Singh, conducted the interview. Got it. I was curious, how does it feel to be the chief executive of Serum Institute right now?

How does it feel to be the chief executive of Serum Institute right now? Well, you know, it's very stressful because everyone is depending on us to be able to give this magic silver bullet in an almost infinite capacity, which is obviously not possible. So when we talked to Adar Poonawalla in May, the pressure is really building. COVID is racing through India. The government of India needs doses to ramp up its vaccine program. Cities and states are also putting in orders to the Serum Institute for doses. And people's expectations are just, just, you know, unimaginable that they just can't understand why there isn't enough vaccine for the whole of India immediately. And serum just can't deliver. It can't possibly produce as many doses as are needed right then. Normally, you have multiple manufacturers for any product, whether it's a pair of shoes, whether it's an antibiotic.

In our case, we're supplying 90% of the vaccines to India because the other manufacturers are still going to take some time scaling up. The Serum Institute at this point is tasked with supplying 90% of the vaccine doses for a country of 1.4 billion. And he points out that... People are not very happy with me at the moment. It's hard being in this position because unlike any other commodity, there's only him. There's no one else to step up and take off some of the pressure. The whole country is dependent on one person. So it's a very stressful situation.

but also how he felt about the government halting exports, which made it impossible for the Serum Institute to deliver on its agreements and get vaccine to all of these other countries. When the government decided that, you know, India would halt its exports, could you describe for me just quickly what those moments were for you? Well, at that time, we had legal notices flying around. We had unpleasant conversations. They all said they had put their faith in me. And let me tell you, Siram has never been in this position ever before.

So it was an emotional moment for me. And it was kind of impacting my brand globally as well, as you can imagine, because people felt that now we're unreliable. He's really worried that the Serum Institute's brand is on the line. Right, that instead of being hailed as a kind of global savior, he could become kind of a scapegoat.

Yeah. All I could explain to them is that what happened was really unexpected, and to be honest, even I didn't expect such a bad second wave. Yeah, nobody did. Nobody could have predicted this. So,

you know. Okay. But like, this isn't his fault, right? Like, none of this would be happening. Nobody would be blaming him if the Indian government hadn't taken the step of banning vaccine exports. So does he blame the Indian government and Prime Minister Modi for essentially preventing him from fulfilling his obligations from exporting these vaccines around the world? No, he told us that he doesn't. Don't forget, my first priority comes from my nation first, which has given me everything. And after all, I am an Indian. What happened in early March in India, the cases started to skyrocket. And there was panic. Also, combine that with the

fact that there was nationalism going on in Europe and US, everywhere else, in exporting vaccines. So even India said, why should we export? And so I may be a global Indian company, but the fact is that we're in India. We need to take care of our own. Like America is taking care of their own. Europe is taking care of their own and put restrictions on exports as well. different than what the U.S. did or what Europe did in making sure that vaccines were prioritized for their own citizens first. After all, much of India's large population is very poor and needs these vaccines just as much as anyone anywhere else. We have only temporarily deferred our commitments to Africa and these other countries. So I stand very, I stand fully committed and I really look forward to the day where I can start helping them out as well. But right now it's just on a priority basis. That's all it is. They have told all of these countries, they've told AstraZeneca that they fully intend to meet the terms of the, only about 5% of the population is fully vaccinated. And how quickly, realistically, the government can vaccinate nearly 1.4 billion people

is anyone's guess. Right. And for those countries who are waiting for those vaccines, they might end up waiting a pretty long time. Yes. The concern is that while the government is trying to vaccinate all these people, there could be another wave and it could be even worse than the last. And there would be another major disruption to the vaccination campaign. there would be another major disruption to the vaccination campaign. So it's really difficult to predict when Serum Institute will actually be able to fulfill these promises to the rest of the world. It's just our population is so big that what can we do? It's just our population is so big that what can we do?

We just have to wait and manage the situation and hope that we can save as many lives as we can. So what can all these other countries who were counting on getting the Serum Institute's vaccines actually do in the meantime? Like, are they just waiting? Are they trying to get vaccines from somewhere else? What are their options? Yeah, so other countries are exploring their options. And for some of them, it's about putting pressure on the U.S. government to share some of its stockpile of AstraZeneca vaccine that it's not using. It's also asking diplomats in Europe and elsewhere to share any spare AstraZeneca vaccine they have. And short of that working out, they're hoping to strike deals to

buy vaccine from Russia, the Sputnik V vaccine from Russia. They're also receiving donations from China. But right now, everything is really up in the air for a lot of these countries. Their vaccination campaigns are in disarray. And what they want most of all is still the AstraZeneca vaccine, because that's the vaccine they began their vaccination programs with. And that's the one they're hoping will get them out of this pandemic. It seems like one broad takeaway from this story is that if you are a country that's trying to stop a pandemic, you basically need your own vaccine-making capability. You need companies making vaccines inside your own borders. And if you don't have that capability, if you're

a small country or a poor country or a country that doesn't have a lot of pharmaceutical manufacturing, you're basically at the mercy of the countries that do. And if those countries need vaccines for their own people, you're kind of out of luck. Yeah, that's right. I mean, I think this coronavirus pandemic from the outset has exposed coronavirus pandemic from the outset has exposed lingering global inequities. And the story of the Serum Institute and India and the ban on vaccine exports that were meant to help the developing world combat this pandemic are a great example of that. There were all of these countries that put their stock in with the Serum Institute and with the AstraZeneca vaccine. And now they're basically in a position of having to beg wealthy countries to give up some of their share. And I mean, a subthread here that I've been sort of thinking about is that,

you know, for a long time, there was this kind of dream of a globalized economy. And we sort of forget that nations have borders, that trade, you know, can be restricted because we're just so used to everything we get here in the U.S. coming from somewhere else. And so it seems like the pandemic and the race to distribute vaccines has really kind of led to a reminder that nations have control of their economies, their factories. And that maybe when we're in a crisis like this, the economy isn't so global. Right. And similarly, even though this emergency is global, the response really hasn't been. and I think with the best of intentions, decided that they wanted to make sure that vaccine doses were distributed equitably, that just hasn't happened.

What's happened instead is that wealthy countries have gobbled up as many vaccine doses as they need, and only after that have they thought about the rest of the world. Right. In the end, in a sense, nationalism won. and only after that have they thought about the rest of the world. Right. In the end, in a sense, nationalism won. Right. And this pandemic could have provoked a different kind of response. It could have broken systems that were nationalistic and instead it's kind of reinforced them.

Emily, thank you so much. Thank you. We'll be right back. Here's what else you need to know today. In a major ruling on free speech, the Supreme Court found that a Pennsylvania school district violated the First Amendment by punishing a student for a vulgar social media message sent while she was off campus. social media message sent while she was off campus. The case revolved around a then high school freshman, Brandy Levy, who posted the angry message after being passed over for the varsity cheerleading squad. As punishment, she was suspended from the junior varsity team. By a vote of 8-1, the justices found that that punishment went too far, with Justice Breyer writing, quote,

The school's interest in teaching good manners is not sufficient, in this case, to overcome the student's interest in free expression. Today's episode was produced by Austin Mitchell, Aastha Chaturvedi, and Rochelle Banja, with help from Soraya Shockley. It was edited by Lisa Chow and engineered by Chris Wood. Original music by Dan Powell. Special thanks to Karan Deep Singh. That's it for The Daily. I'm Michael Barbaro.

See you tomorrow.