On June 29, 2021, the Brazilian Government suspended 20 million doses of Covaxin $300-million deal with Bharat Biotech. This was a major blow to Bharat Biotech’s plan to market Covaxin abroad. The growing scandal about the contract started becoming heavy on Jair Bolsonaro, this led the Brazilian Government in a completely defensive mode to save the President’s name from a multimillion-dollar scandal which has become a hot topic of discussion for every media house in the Country.
On Tuesday, 29 June, Brazil’s minister of health Marcelo Queiroga broke the ice and announced that the government “has decided to suspend the contract with Bharat Biotech on the advice of the federal comptroller general (CGU),” which is in the process of investigating the claimed irregularities in the contract. The CGU will decide whether to terminate or go forward with the deal after a thorough examination of the contract which may take 10 to 15 days. But in the views of the senators leading the parliamentary commission of inquiry (CPI), the contract is terminated.
Precisa Medicamentos, a local company, mediated and signed the deal between Bharat Biotech and Brazil. The company has attracted several political controversies for days. The company became the main objective of the parliamentary commission of inquiry (CPI) investigating the Government’s handling of the pandemic. The relatively high cost of Covaxin, which had not passed regulatory tests, attracted Brazilian federal prosecutors’ attention to the contract signed in February. According to a document, the Government of the prosecutor general’s office, the health ministry has to pay $320 million to Precisa Medicamentos and each dose costs $15. This amount was notably higher than what the health ministry paid for Pfizer’s vaccine, which had passed regulatory requirements. Last year, President Bolsonaro ignored Pfizer’s proposal to supply vaccines and constantly raised questions on the American pharmaceutical giant’s efficacy.
A few days back, the controversies took a dramatic turn for President Jair Bolsonaro after a health ministry official testified at the senate. Ricardo Miranda testified that he and his brother, federal deputy Luis Miranda, had alerted the President about the concerning irregularities in an invoice sent by Madison Biotech, an offshore company in Singapore. The testimony made the CPI shift their focus to Bolsonaro and Bharat Biotech, whose owner Dr Krishna Ella is also the founding director of Madison Biotech. This invoice from Madison Biotech became the focus of the investigation. According to the official CGU report which led to the immediate termination of the contract, some points that justify the suspension are: Attempt to make any advance payment, without any contractual provision; refusal to contractual deadlines; possible transaction through a firm not a signatory to the contract; violation of the contract by Bharat/Precisa as reported by the health ministry; and unjustified price.
The beginning of the CovaxinGate scandal
In March, Brazil’s National Health Surveillance Agency (ANVISA) visited Bharat Biotech’s facility in Hyderabad for inspection and found violations in regulations for good manufacturing practices. Needless to say, ANVISA rejected the Indian company’s application for supplying Covaxin in Brazil. During the inspection, several non-conformities were found, which indicated the serious risk to manufacturing and quality assurance of the vaccine. In January, the Indian company had already signed a contract with Precisa Medicamentos, and in February, Precisa signed a deal with the Brazilian government for the sale of 20 million doses. At the time of signing the contract, Brazil’s drug regulations had not approved Covaxin, although its price was agreed at $15/dose. The price for covaxin was the highest price paid by Brazil for any of the six vaccines contracted. After getting rejected by ANVISA on March 31, it got approval for limited import on June 4. Since then, the Indian company is at the centre of a massive scandal that is ravaging the Brazilian government and ripping apart Bharat Biotech’s reputation worldwide.
The vaccine which is supposed to save lives has become a poison for the Jair Bolsanaro government in Brazil. According to government officials, nobody in the government wants to do anything with the vaccine, termination of the deal is the only way to wash off their hands. For the Bolsonaro government, which has been completely shocked by the CPI over the acquiring of Covaxin and hydroxychloroquine, the scandal has become disastrous for the administration. But a temporary suspension may not be a solution as the senators leading the parliamentary probe are determined to follow the money trail in the contract.
Bolsonaro’s only way out was a complete suspension of the deal which he announced on Tuesday. On this decision, Senator Randolfe Rodrigues, the vice president of CPI, remarked it as a “confession of guilt.” The probe has gone too far with the scandal surrounding the Indian pharmaceutical giant to come back now. The incidents have already attracted media channels all over the country and have kept people glued to the news channels. Ricardo Miranda is being treated as a whistleblower by the CPI ever since he exposed the request of $45 million as advance payment sent by Madison Biotech-the pharmaceutical firm in Singapore. The invoice which Ricardo and his brother took to President Jair Bolsonaro with their objection, became the conclusive evidence on which the lies probe to expose the corruption in the India-Brazil deal.
Last week when the invoice story got revealed, the President initially tried to throw a “tampering with documents” allegation on Ricardo Miranda. But soon it was proved that the document was not forged as it was in the health ministry’s computer. The government then stated that the President had forwarded the complaint to Eduardo Pazuello, minister of health at that time. This statement proved to be false when CPI found out that Eduardo Pazuello was dismissed from office, three days after Ricardo Miranda and his brother met with the President. Again the government came up with the third excuse, claiming that Eduardo Pazuello had forwarded the objection to the executive secretary of the health ministry, Elcio Franco. According to the government, it was Franco’s responsibility to do a thorough check. The CPI straight away pointed out that just like the minister of health, Franco was also dismissed after three days and he had hardly any time to scrutinize the matter.
Ricardo Miranda testified that he informed the President about being “under pressure” from his seniors to approve the invoice for advance payment from a party that is not a part of the contract. The testimony that earned him the title of the whistleblower, has kept the President standing on thin ice. According to Brazilian law, if the wrongdoings of a public officer are not reported, it is treated as a crime of malfeasance, an impeachable offence. The CPI vice president and two other senators have requested the Supreme Court of Brazil to initiate a criminal case against Jair Bolsonaro. Following the request, a judge of the apex court forwarded the application to the federal prosecutor-general (PGR) for necessary actions. The court will start the criminal procedure after the senate probe is over.
As demanded by the CPI, the senate investigation may take few more weeks to dig further into the Government’s corruption, specifically in the Covaxin deal. After the investigation, the report will be prepared which might shake up the whole government in Brazil. The centre of this probe is the invoice from Madison Biotech which was presented by Ricardo Miranda. The officials of the Presidential palace are tensed because Ricardo Miranda is all set to appear again at the senate, this time it will be a closed-door session. What is snatching away the official’s peace is that the brothers might possess a recording of their conversation with the President where no other person was present.
Just like the silence before a storm, Bolsonaro’s silence proves that he knows what is waiting for him. Terminating the contract is unlikely to put out the fire that Ricardo Miranda had started. The head of Bharat Biotech’s representative in Brazil, Francisco Maximiano, is expected to appear at the Senate hearing. This might bring out some more details of the scandal. After the FDA rejected the emergency use application of Covaxin, the scandal that’s unfolding in Brazil has shattered Bharat Biotech’s reputation throughout the globe.