The pandemic is raging like a forest fire across the country. Apart from other measures that are urgently required, ramping up vaccination rates is important. Speeding it up is likely to reduce severe infection, transmission rates and the likelihood of the emergence of vaccine-resistant mutations of the virus, rendering the current vaccine ineffective.
Currently, there are three major challenges with respect to the Covid-19 vaccine. One, ensuring adequate supplies in a short time. Two, sorting out our pricing policy for the vaccine and three, the administration of the vaccine.
The situation with respect to vaccination ought to have been better over 2021, yet we find that numbers vaccinated have fallen over in the first week of May. Many effective vaccines have been developed – Moderna, Pfizer, Covishield, Covaxin, Sputnik to name a few. However, only two of these are being produced domestically (Covishield and Covaxin) and that too by only two manufacturers: the Serum Institute of India and Bharat Biotech. To boost supplies quickly, we need action domestically and internationally.
Countries such as UK, US, Canada and those of the European Union have reportedly got more vaccines than they need to vaccinate their entire population. Some have excess stocks. This is a moment for international solidarity whereby these countries export their excess supplies to India and others poor nations. This makes even more sense as there is a danger of vaccine-resistant mutations emerging if people across the world are not vaccinated quickly enough. Should such mutants emerge, they would render the excess stocks useless even for the countries that are holding them.
In addition, these countries must support India and South Africa’s proposals for (temporary) waivers in the Trade Related Intellectual Property Rights at the World Trade Organisation for the Covid-19 vaccine, facilitate easy technology transfer and so on to ensure vaccine availability in poorer countries.
India and South Africa have been making these efforts since October 2020, but are currently being blocked by the richer nations. Two days ago, the US decided to support the proposal at the World Trade Organisation, but it still needs European Union support and more time after that to get to production stage. Serious questions have also arisen about Bill Gates’ role in blocking the move towards a free Intellectual Property Rights regime for Covid.
Ironically, while India has taken the right stand on vaccines internationally it is not pursuing that policy domestically. For instance, when it comes to Bharat Biotech’s Covaxin, instead of invoking compulsory licensing (under Section 92 of the Patents Act 1970) and imposing upon Bharat Biotech to share its technology with other domestic producers, the Central government allowed Bharat Biotech to maintain their monopoly over vaccine production.
Some belated efforts have been made in recent weeks for Bharat Biotech to grant licenses to companies such as Haffkine to produce Covaxin. If the patent is shared by the Indian Council for Medical Research and Bharat Biotech, the government of India should be using it to build up public sector vaccine production which has been decimated over the years.
One major fallout of the shortage in supply of vaccines is that those who have them – the Serum Institute of India and Bharat Biotech – are holding the country to ransom.
One way in which they are doing this is through differential pricing. The Serum Institute initially announced three prices (the Central government will continue to get it at Rs 150, but the company initially wanted to change Rs 400 for states and Rs 600 for the private sector). Similarly, Bharat Biotech announced two prices (Rs 600 and Rs 1,200).
Combined with the fact that 50% of production is committed to the central government, the pricing policy means that the Serum Institute and Bharat Biotech can prioritise the more remunerative private sector orders over state governments.
Faced with widespread criticism, both companies reduced the price for states marginally (the Serum Institute to Rs 300 and Bharat Biotech to Rs 400). However, that does not solve the problems created by the supply bottleneck and differential pricing (including the possibility of a black market emerging or that supplies to states will dry up as manufacturers prioritise the more profitable private sector orders).
In this sense, pricing problem is closely linked to the domestic and international supply bottleneck. The Serum Institute and Bharat Biotech are aware of this and are using this opportunity to indulge in profiteering. The exorbitant price that Bharat Biotech is being allowed to charge is all the more surprising because the Indian Council for Medical Research contributed to the research and shares the patent for the vaccine.
It is worth re-emphasising that the price problem needs the government to step in because vaccines have positive externalities (i.e., when I vaccinate myself, not only do I benefit but others around me also benefit) associated with them. We need to vaccinate between 50%-80% of the population for the vaccination drive to be effective.
This year’s budget had set aside Rs 35,000 crores for vaccination. At Rs 150 per dose (and two doses per person) with the given budget, we can vaccinate around 100 crore people. Not doing so will render the vaccination of those who can afford it also less effective, possibly useless (if vaccine-resistant mutants evolve).
Several legal instruments (such as the Essential Commodities Act, 1955) are available to intervene and ensure fair prices. Sadly, the government appears to have prioritised the interests of private manufacturers over the public interest.
For vaccines, the market solution is neither efficient (those who can afford it will pay a higher price unnecessarily, and it may still not protect them because too few people get it) nor equitable (because the poor may get left out).
India has experience with mass vaccination programmes, albeit for children (through anganwadis and health centres). Instead of learning from it, the government is creating a new and centralised mechanism for Covid vaccines. The same government which is paralysed when it comes to ensuring adequate supply of vaccines, has put over-zealous technocrats in charge of coordinating – through an app and a website – the vaccine drive.
Not surprisingly, the day registrations were opened for those aged 18 years and above, the website and app crashed. While the app developers were rejoicing the absolute numbers they were able to register, people were complaining about the app crashing, their appointments being cancelled or slots not being available.
In a country where not everyone has access to the internet and to mobile phones, the central government is pushing a vaccine policy that relies heavily on online registration. For 18-45 year olds, officials have said that vaccination slots at private facilities (the main source) will “be offered only for online appointment” and on-site will be allowed only if any doses are left in open vials. On the ground effectively, the message (and possibly practice too), there is no walk-in facility for those below 45 years.
This means that if I’m a poor rural youth without a phone, I would have to find a private facility and someone who would be willing to register me using their phone. And yes, it will eventually be possible, but effectively we are raising the bar for the more disadvantaged to get vaccinated. (Chhattisgarh’s attempt to try a different route has been challenged in its High Court.)
Many believe that online registration will reduce crowding and waiting time at the vaccination centres. (The reality is that it has helped little on that count.) However, the real solution to the crowding problem is to open many more vaccination centres. In fact, preliminary analysis shows that having a vaccination centre nearer to people increases the vaccination rate. As if these barriers are not enough, in many places there are reports of people being told that Aadhaar is necessary to register or to get vaccinated.
One of the reason for the mess in the vaccination policy is that too much of this space, which legitimately belongs to public health experts, has been taken over by technocrats and those with commercial interests. Combined with the government’s uncritical view of market- and technology- based solutions, this has resulted in a wrong-headed policy for vaccination. Indeed, much of what is suggested here with respect to supply and pricing should have been happening last year when the vaccine was on the horizon. Sadly, we missed that boat. What is worrisome that the policy paralysis continues to this day.
Reetika Khera is an Associate Professor of economics at the Indian Institute of Technology, Delhi.
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