India should give top priority to scaling up vaccinations

With daily cases exceeding 261,000 and reported shortages of hospital beds, essential medicines and even oxygen, the covidie crisis in the country has clearly gotten out of hand. There are a lot of things we need to do: urgently increase healthcare facilities and supplies, stop large-scale events such as election rallies and large religious gatherings, promote masking, social distancing and hygiene and introduce selective locks if necessary.

The only good news from a year ago is that vaccines are a new weapon that we didn’t have before. Two domestically produced vaccines are already in use and more are in preparation. And vaccines approved overseas are now allowed for use in India, increasing the potential supply.

Speeding up the pace of vaccination is an obvious priority. But achieving this may require moving away from the current highly centralized system in which the central government is the sole authorized purchaser of vaccines, setting the price and placing all orders.

This system has clearly failed us. He should have placed vaccine orders well in advance, including advance orders from companies producing new licensed vaccines. Other countries were doing it, but we didn’t.

The exact reason for the failure is not known, and there will be sufficient time to do an autopsy. One of the reasons could be the fact of not agreeing on a price. When governments set prices, they have an understandable desire to keep them low. But it can also endanger the supply, as appears to have happened in the case of Covishield. Spokesmen for the Serum Institute of India (SII) said the price the government was willing to pay was lower than the price of vaccines delivered to the World Health Organization’s Covax program for distribution in the poorest countries .

A low price was accepted for the original order, which was likely filled with vaccines already produced, although some vials of IBS could not be exported due to the ban, a restriction that would have reached their expiration date. expiry. The company wanted a higher price to speed up production for future orders, or a capital subsidy. Whatever the merits of the case, the net result has been a prolonged delay in placing firm orders.

We should have recognized that private sector producers cannot be expected to subsidize the supply of vaccines. We have to offer them a “reasonable” price if we want them to expand their capacity to increase production.

The problem will repeat itself as new vaccines become available. Each vaccine has different properties and costs. Will the government set the same price for each vaccine regardless of cost and expect to get the supply it wants at that price? If not, how will the prices of the different vaccines be set?

In the short term, we have no choice but to get the existing system to place firm orders to secure supplies for the next three months or so. For the future, we should consider moving to a system with a more important role for private actors.

Move to a dual market: Producers might be required to sell, for example, 65% of their production to the government at a negotiated price for the public immunization program. This price should be determined transparently, taking into account reasonable costs with a discount for wholesale purchases. The rest of their production could be sold domestically on the open market or exported. Allowing an export window is essential if we are to maintain India’s credibility as the “pharmacy of the world”.

As new vaccines are produced, there may be cases where the government is unwilling to purchase 65% of the planned production. In such cases, any production beyond the orders actually placed should be available for sale on the open market or for export.

The introduction of a dual market system described above would drastically reduce the volumes the government would have to purchase. Vaccinating 70% of India’s population (excluding children and pregnant women) by the end of 2021 will require coverage of 680 million people. The government could plan to cover, for example, 480 million through the public free vaccination program, while the remaining 200 million should meet their needs through the market. They should remain eligible to receive free vaccines if they wish, but most of them will in fact choose to go to less frequented private facilities and pay.

Vaccination in a private establishment at current costs 250, based on vaccines provided by the government to 150 per dose. Even though the cost per dose increases dramatically, it remains affordable for high income groups. The Confederation of Indian Industry said its members would join the vaccination effort, bearing the cost of vaccinating all employees, and possibly their families as well.

Transparency: Transparency is essential if we are to avoid a blame game. The government should act quickly to place firm orders with domestic suppliers for the next three months, and publish supply commitments resulting from various companies. The distribution of these supplies to state governments could also be announced in advance, giving state administrations a clear indication of what to expect, so they can plan their vaccination rollout.

Imported vaccines: Imported vaccines are unlikely to be purchased for the public immunization program as they are much more expensive and also require low temperature storage that public hospitals will not be able to provide. However, many private hospitals in metropolitan areas can meet temperature control requirements and there will be takers for new, state-of-the-art vaccines. These hospitals should be allowed to import them for private use.

Imports of vaccines by the private sector for use in India will also encourage companies that have developed them to engage in licensed production in the country for the domestic market and for supply to other countries. It would help consolidate India’s position as the world’s pharmacy. It would also be a concrete step towards the kind of vaccine cooperation discussed at the recent Quad Summit.

Montek Singh Ahluwalia is a Distinguished Fellow of the Center for Social and Economic Progress, and former Vice Chairman of the Planning Commission

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