Russia's move to produce its Sputnik V vaccine in Italy has underlined Moscow's efforts to meet a surge in overseas contracts for the jab while many Russians snub it at home.
The Russian Direct Investment Fund (RDIF), which oversees the Covid-19 vaccine's distribution, on Tuesday said it had signed an agreement with Swiss-based pharmaceutical company Adienne for its Italy-based unit to produce the two-injection jab, the Italian-Russian Chamber of Commerce said in a statement.
Production first requires approval from local regulators, according to Italian officials, and the region of Lombardy, where the factory is based, said it was not involved in an "exclusively private-law agreement." Adienne did not return calls for comments.
But if it comes to fruition, the Italy manufacturing plan would be the first such partnership inside the EU, where the bloc’s medical agency is reviewing the Russian vaccine for authorisation.
RDIF head Kirill Dmitriev told Russian state television that the state investment fund had also signed deals with producers in Germany, Spain and France.
Russian Direct Investment Fund
Russia's push to expand Sputnik V's overseas manufacturing comes as the Kremlin strives to supply a growing number of foreign countries that have placed orders for over 1.4 billion doses of the vaccine, which has demonstrated high efficacy rates in peer-reviewed clinical trials. TheRDIF has outsourced production to factories in India, China, South Korea and Brazil.
However, some of the companies involved in those countries say they have yet to reach full production. Over the past four months, the Kremlin fund has directed around 1.25 million Sputnik V doses made in Russia to export markets, including Slovakia, Serbia, Mexico, Argentina and Hungary.
“Less than 5 per cent of vaccine produced in Russia has been exported in January and February,” RDIF said in a statement this week, insisting that is less than the share some Western manufacturers are sending outside of their domestic markets.
"These were surplus amounts that did not affect the rollout of the vaccination program in Russia," the fund added. "Vaccination of Russians is without question the key priority in Russia and Russia will become one of the first countries in Europe to vaccinate all citizens who want to be vaccinated."
Analysts say exports from Russia have been possible partly because of the relatively low domestic vaccine take-up and the widespread scepticism among Russians for the national jab. President Vladimir Putin, who is yet to be vaccinated, said last week that 2 million Russians had received two doses and "about as many" had received the first dose, out of a total population of 144 million.
‘No roaring demand’
Though the vaccine is widely available to all age groups for free, only 30 per cent of Russians are willing to take it, according to a poll published by the independent Levada Center this month. Nearly two out of six respondents said Covid-19 "was created artificially and is a new form of biological warfare", according to the survey.
"There's no roaring demand [for the vaccine] in Russia," said Anton Gopka, a partner at biotech investment firm ATEM Capital. "If there were higher domestic targets, then the subject of export might not even come up, because Russia's still the priority. But they're doing both, and that's fine - they just need to scale up production."
After initial domestic production hiccups, Russian officials say they hope to have manufactured a total of 33 million doses by the end of this month.
Gopka said issues with deliveries of other vaccines to Europe, combined with the low domestic demand in Russia, opened a window of opportunity for Moscow to sell Sputnik V to the west.
“European countries have to use whatever vaccine they can get. So now there’s a chance to supply them from Russia,” he said.
Last Thursday, the European Medicines Agency’s human medicines committee said it had started a rolling review of Sputnik V, a process that could lead to approval for EU use, potentially further increasing demand.
Sputnik V has been approved by 45 foreign countries and is being pitched by Moscow as an alternative to western vaccines produced by multinational pharmaceutical companies. The vaccine's 91.6 per cent efficacy rate disclosed in a peer review published in the Lancet last month has also made it attractive to several EU countries amid supply problems affecting producers such as AstraZeneca.
Those same selling points have caused a big increase in demand for the jab, leaving Russia facing many production and distribution challenges its western competitors are also facing.
One foreign official involved in negotiations with RDIF said its marketing of the vaccine had seemed “really pushy”. “Now they have a problem, because they have oversold this wonderful product,” the official added. – Copyright The Financial Times Limited 2021