Free shots for all: This must be India’s vaccination strategy -Jean Dreze

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published Published on May 5, 2021   modified Modified on May 5, 2021

-The Indian Express

It is bad enough that we depend on just two suppliers. What is baffling is that the government has now allowed them to set their own prices.

At a time when fair and speedy COVID-19 vaccination is of the essence, the Indian government has done a great job of putting us at the mercy of vaccine manufacturers. It is bad enough that we depend, as of now, on just two suppliers — the Serum Institute of India (SII) and Bharat Biotech. What is baffling is that the government has now allowed them to set their own prices — “whatever you want in terms of being reasonable and fair”, as SII chief Adar Poonawalla candidly explained in a recent interview to CNBC. For good measure, suppliers are also allowed to set different prices for different buyers (the Centre, states and private hospitals), enabling them to charge what different segments of the market can bear. This is the polar opposite of the “single-payer model” in healthcare, where the government tries to get the best possible deal from drug manufacturers by acting as the single buyer.

In the single-payer approach, the central government would order all the vaccines and then distribute them equitably between states, and possibly some private healthcare providers. This was, more or less, the situation in the first phase of the COVID-19 vaccination programme, when most of the vaccines were sold to the central government at a negotiated price of Rs 150 per dose. However, a radical change occurred on April 21 with the release of the central government’s policy note on “Liberalised Pricing and Accelerated National COVID-19 Vaccination Strategy”.

It is important to read the fine print of that policy, effective from May 1. The stated intention was clearly to supplement central procurement (limited to 50 per cent of vaccine supplies from then on) with a vaccine market where each manufacturer would charge one transparently declared price to all buyers other than the central government, that is, states and private hospitals. That intention, however, was defeated the very same day by SII, which announced different prices for states and private hospitals, with a much higher price (Rs 600 per dose) for the latter. And if suppliers can get a higher price from private hospitals, why would they take interest in selling to the states?

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The Indian Express, 5 May, 2021,

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