Brazil Pulls Out of US$324 Million Covaxin Contract Amid Cries of Corruption

Published: 01 July 2021

Jair Bolsonaro FlickrBrasilian President, Jair Bolsonaro, has defiantly rejected measures to control viral spread and continues to deny calls of graft and corruption. (Photo: Jeso Carneiro, Flickr, License)

By Emily Tian

Brazil will suspend its US$324 million contract for India’s Covaxin COVID-19 vaccine upon the recommendation of Brazil’s Comptroller General office (CGU), Health Minister Marcelo Queiroga said Tuesday.

“According to preliminary analyses, there are no irregularities in the contract but, for compliance, the health ministry opted to suspend the contract for further analysis,” Queiroga tweeted.

The CGU, Brazil’s audit branch, will decide whether to terminate the contract after a complete investigation.

Queiroga said the government has not yet paid for the Covaxin vaccine and that the measure will not compromise the pace of vaccine distribution in Brazil.

The Covaxin saga has generated public ire and distrust in the government’s vaccination response. Covaxin is not only more expensive than BioNTech Pfizer but is also still unapproved by the World Health Organization (WHO) — leaving many to question why the Bolsonaro administration has pursued this particular shot while cheaper, authorized options were on the market.

A CGU evaluation of the Covaxin contract obtained by CNN Brasil on Tuesday lists several reasons to be suspicious of the deal, including that the government attempted to make an advance payment outside of the terms laid out in the contract and may have also paid through a third-party company not included in the contract. According to the CGU report, Bharat Biotech also did not meet deadlines for vaccine delivery and did not include a pricing justification in the contract.

Allegations of corruption and graft within the Bolsonaro administration have been mounting all week.

The contract’s suspension arrives shortly after Monday’s news that Senator Randolfe Rodrigues filed a criminal complaint against Bolsonaro with the country’s highest court, urging an investigation into potential graft in COVID-19 vaccine purchases.

Brazilian newspaper Folha de S. Paulo also reported on Tuesday that Ministry of Health logistics chief Roberto Ferreira Dias had attempted to negotiate a bribe of a dollar per dose of AstraZeneca’s vaccine to a medical supply company representative. He was dismissed from his post that same day.

The same deal is currently being investigated by Brazil’s federal prosecutor’s office after prosecutors noted the high price per dose and that ministry officials apparently disregarded a history of alleged irregular government contracts with Bharat Biotech representatives.

Jair Bolsonaro, the president of Brazil, has defiantly rejected measures to control viral spread and continues to deny calls of graft and corruption.

Bolsonaro has seen his popularity fall sharply in the past year due to his administration’s mishandling of the pandemic. The latest string of scandals has led a coalition of politicians and civic leaders to call for his impeachment, while a Senate probe into the government’s management of the pandemic, opened in April, marches forward.

Meanwhile, Bharat Biotech issued a press release on Wednesday to address the ongoing investigation.

According to the biotech company, the pricing of Covaxin has been set in Brazil at $15 per dose, in line with the $15-20 pricing range established for governments outside of India.

The Ministry of Health began meeting with Bharat representatives last November and obtained emergency use authorization on June 4. Bharat Biotech confirmed that it has neither received any advance payments nor supplied any vaccines to Brazil yet.

“A step-by-step approach has been followed towards contracts, and regulatory approvals, during this [approximately] 8-month-long process,” the press release said.

Bharat Biotech initially failed to meet manufacturing conditions laid out by the National Health Surveillance Agency (ANVISA) in late March, but ANVISA later approved the proposal to import Covaxin in June.

Patient treatment and vaccination distribution have been beset by numerous delays while the government has repeatedly failed to organize a centralized and effective pandemic response. The number of Brazilians who have died from COVID-19 has climbed past half a million, making the country second only to the US in COVID-19 deaths.