Bharat Biotech’s Covaxin vaccine is running into deeper troubles abroad

Bharat Biotech may be in a hotter soup in Brazil.

The Brazilian government’s inquiry into Bharat Biotech, which has developed and manufactures India’s homegrown Covid-19 vaccine Covaxin, has intensified over the past two weeks. The Brazilian parliamentary commission looking into the company’s deal to sell vaccines in the Latin American country will now also investigate an alleged payment of $200,000 from Bharat Biotech to the India-Brazil Chamber of Commerce, The Wire reported.

These questions have been raised as part of an ongoing investigation against Bharat Biotech and the alleged irregularities in its contract to sell India’s coronavirus vaccines to the country. Though the Brazilian health ministry did not definitively find irregularities in Bharat Biotech’s agreement, it suspended the $324 million contract with the company as a preventative measure on June 29.

While suspending the contract, one of Bharat Biotech’s first outside India, the ministry said there were complaints that it felt the company did not address satisfactorily. It also opened up a probe into the contract, as part of a larger investigation into president Jair Bolsonaro’s alleged mishandling of the Covid-19 pandemic.

Now, with a $200,000 payment to a private lobbying organisation, the company will need to answer some tough questions surrounding what is now being called “Covaxingate” in Brazil.

Latest allegations

The India-Brazil Chamber of Commerce, according to its website, “is a private non-profit organisation that has been working to promote trade and cultural relations between India and Brazil since 2003”. According to The Wire’s report, Suchitra Ella, co-founder and joint managing director of Bharat Biotech, and Precisa Medicamentos, the Indian firm’s representative in Brazil, are both a part of the India-Brazil Chamber of Commerce.

Two top office-bearers of the India-Brazil Chamber of Commerce board are also honorary consuls of India for two Brazilian cities. The connection becomes more complicated given that Covaxin, the Covid-19 vaccine, has been developed by Bharat Biotech in collaboration with the Indian government’s Indian Council for Medical Research.

In response to questions from The Wire, the India-Brazil Chamber of Commerce explained these payments as thus “As a policy, the chamber refrains from commenting on its business relations with members or associate members. However, in this specific case, it may be mentioned that any transfers made from Precisa Medicamentos to the India-Brazil Chamber of Commerce correspond to its contributions to the institution as part of membership and to the sponsorship of events and initiatives of IBCC in 2021.”

While the investigation has not led to any conclusive faults on the part of Bharat Biotech, its Brazilian partner, or the India-Brazil Chamber of Commerce, the timeline of the agreements and the payment made to the India-Brazil Chamber of Commerce have raised the commission’s suspicions.

It appears that Bharat Biotech may now be in trouble elsewhere.

Troubles in Paraguay

The vaccine maker’s contract to supply 2 million doses of Covaxin to the government of Paraguay could also be under the scanner now. It links back to Madison Biotech, Bharat Biotech’s partner in Singapore, which sent a $45 million invoice to the Brazilian health ministry. Krishna Ella, founder of Bharat Biotech, is a director of the Singapore firm.

In a press release, the Indian vaccine maker on June 30 said that Madison Biotech is one of the 13 such companies that it has founded or acquired for the purposes of research & development, sales, or marketing of vaccines globally.

The investigation into Bharat Biotech expanded when Brazilian whistleblower Luis Ricardo Fernandes Miranda revealed on June 23 that he had, in March, flagged the irregularities in the invoice to the president, and said he was being pressured into clearing the payment. At first, the Brazilian government said that Ricardo Miranda had forged the documents, but it was later found that the invoice in question was not forged.

When investigations into the Madison Biotech invoice began, Emanuela Medrades, the executive director of Precisa Medicamentos, told the Brazilian commission that both Bharat Biotech and her company had followed “normal procedure”, The Wire reported. Medrades reportedly cited the Covaxin deal in Paraguay as an example of this norm. This alerted the Brazilian government, which has since contacted its counterparts in its neighbouring country to look into its own Covaxin contract.

The contract was already in trouble in Paraguay because Bharat Biotech had not delivered its promised doses as part of a 4 million doses contract that was due by March 17. Both Brazil and Paraguay had signed up to pay $15 per dose to Bharat Biotech, another element of the contract that has become a bone of contention.

Issues with Ocugen

Bharat Biotech’s partner for marketing and selling Covaxin in the US and Canada is now facing a class-action suit in the US. Ocugen, a Pennsylvania-headquartered biotechnology company, is now facing charges of violating US federal securities laws.

Pomerantz, an American law firm, announced its class-action on July 19, stating that Ocugen made “materially false and misleading statements regarding the company’s business, operations, and compliance policies.” All of these allegations pertained to Ocugen’s reported filing for an emergency use authorisation for Covaxin with the Food and Drug Administration.

On February 2, Ocugen had announced its tie-up with Bharat Biotech, under which it would have exclusive rights to develop, manufacture, and commercialise Covaxin in the US. In its securities filings on February 5, the company detailed how it would apply for an emergency use authorisation with the Food and Drug Administration.

Instead, on June 10, Ocugen said in a press release that it would apply for “biologics license application” and not the emergency use authorisation. This license amounts to full approval, and is, in essence, a far longer and more tedious process.

While Ocugen’s share prices soared after the February press release, the announcement of its full license plan brought a drop of over 28% to its stock price. Pomerantz alleges that it was never Ocugen’s plan to apply for an emergency use authorisation, and it misused this nugget of information for financial gain.

Meanwhile, Ocugen, which is Bharat Biotech’s partner in North America, has begun a rolling submission to Health Canada, it said in a securities filing on July 15. A rolling submission is Canada’s accelerated approval process for vaccines in emergency use.

This article first appeared on Quartz.