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Brazil to suspend $324 million Covaxin deal with Bharat Biotech amid probe

By Priyanka Verma 
Updated Date

Brazil will suspend a $324 million Indian vaccine contract that has mired President Jair Bolsonaro in accusations of irregularities, the health minister said on Tuesday, following the guidance of the federal comptroller, the CGU.

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The deal to buy 20 million doses of Bharat Biotech’s Covaxin shot has become a headache for Bolsonaro after whistleblowers went public with concerns over irregularities.

One Health Ministry official said he personally alerted the president about his concerns. Brazil’s Health Minister Marcelo Queiroga said at a news conference his team would probe the allegations while the suspension was ongoing.

“According to the preliminary analysis of the CGU, there are no irregularities in the contract but, for compliance, the Health Ministry chose to suspend the contract for a more in-depth analysis,” the ministry said in a statement.Earlier on Thursday, Reuters reported a CNN Brasil report that the ministry had decided to cancel the contract.

Brazilian federal prosecutors have opened an investigation into the deal, citing comparatively high prices, quick talks and pending regulatory approvals as red flags. It is also being probed by a Senate panel investigating the government’s handling of the pandemic.

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Testimony before the Senate committee last week from Luis Ricardo Miranda, the chief of the Health Ministry’s import division, and his brother Luis Miranda, a lawmaker until recently allied with Bolsonaro, has turned up the heat even more.

The Health Ministry official said he faced pressure to greenlight the import of Indian pharmaceutical Bharat Biotech’s Covaxin vaccine and that there were irregularities in the invoices – particularly a $45 million upfront payment to a Singapore-based company.

In March, the brothers brought their concerns to Bolsonaro, who they said promised to send the case to the Federal Police and mentioned the government’s leader in Congress’s lower house, a top Bolsonaro ally, as being involved.

However, the Federal Police never received any request to investigate, neither from Bolsonaro nor his Health Ministry, according to a Federal Police source with knowledge of investigations who wasn’t authorized to speak publicly and declined to be named.

The secretary-general of the presidency, Onyx Lorenzoni, told reporters last week that Bolsonaro did meet with the Mirandas but claimed they presented fraudulent documents. Bolsonaro ordered the brothers investigated, he said.

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Bharat Biotech has denied any allegation of wrongdoing with respect to vaccine supply, saying in an emailed statement that it adheres to the highest standards of compliance. The company’s press representative didn’t respond when asked why a payment would be routed through a Singapore-based company.

In the case of procurement of COVAXIN by Brazil, a step-by-step approach followed towards contracts, regulatory approvals, during 8-month-long process, the firm said. As of June 29, the company said it hadn’t received any advance payments nor supplied vaccines to Brazil. “The pricing of COVAXIN has been clearly established between $15-20 per dose for supplies to Governments outside India. The pricing for Brazil has also been indicated at $ 5 per dose,” it said.

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