The Ministry of Health on Saturday said the Centre will continue to procure the Covid-19 vaccine Covishield from the Serum Institute of India at a price of Rs 150 per dose. This means that a Covid shot will be cheapest at any central government facility, but at state government centres and private hospitals, people have to pay more.
In a tweet, the ministry said that any vaccines the central government sold to states will be provided for free. However, the statement said nothing about the higher prices of vaccines that the states and private hospitals will have to pay while buying the doses directly from manufacturers under the new policy. According to the Centre’s new rules, the states will get a share of vaccines from the central government, but will need to buy directly from the vaccine producers to acquire more shots.
The health ministry’s clarification came in response to a tweet by Congress leader and former Union minister Jairam Ramesh, who urged the Narendra Modi government to renegotiate new rates of vaccines with the Serum Institute of India.
“Covishield at Rs 400 for new government procurement is higher than what governments of US, UK, EU, Saudi, Bangladesh and South Africa pay,” he wrote. “Made in India and highest price for India? By SII’s own admission profits are made even at Rs 150.”
The Serum Institute plays a crucial role in India’s vaccination strategy. Covishield, the AstraZeneca-Oxford University vaccine that it manufactures, has accounted for 90% of the 12.76 crore or 127.6 million vaccine doses India has administered so far.
While there is one other manufacturer – Bharat Biotech, which is producing its Covaxin vaccine – and more are on the way, the Serum Institute will continue to provide the vast majority of Indian vaccine stocks most likely until the second half of the year.
On April 21, the company announced that its Covid-19 vaccine Covishield will be sold at Rs 400 a shot to state governments and Rs 600 to private hospitals.
The new prices were released under the Centre’s new strategy for the phase three of India’s Covid-19 vaccination campaign, which allows manufacturers to sell 50% to state governments and in the open market. Phase three opens up vaccinations to all adults above the age of 18.
However, reports have pointed out that a price of Rs 600 per dose would mean that Indians getting inoculated with Covishield at private hospitals from May 1 could end up paying the highest price in the world for this vaccine. This is despite Serum Institute’s chief Adar Poonawalla admitting that the firm was making a profit even at a price of Rs 150 per dose, according to The Indian Express.
Notably, the health ministry’s statement from Saturday announcing it would continue to buy vaccines at Rs 150, also goes against what Poonawalla told CNBC-TV18 in an interview earlier this week. Poonawalla had said that his company will sell Covishield doses to Centre at Rs 400 per dose – the same price at which it will sell the shots to the states – once the current purchase order ends.
His statement came in response to criticism for his decision to charge state governments a higher price for vaccines than had been offered to the Centre earlier.
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More about the new vaccination policy
Coming into force on May 1, phase three opens up vaccinations to all adults above the age of 18. But it also shifts the burden of procuring vaccines for the 18-45 age band entirely on state governments.
The Ministry of Health issued a statement on April 19 saying vaccine manufacturers will have to allot 50% of the doses produced to the Centre. These vaccines will be allocated to the states on the basis of a set formula and will only be used for those who are currently eligible for the vaccines: health care workers, front line workers and all adults over the age of 45.
The manufacturers will be allowed to sell the other 50% to state governments and in the open market. Unlike the 50% acquired by the Centre, at prices negotiated by the government of India, the manufacturers will be permitted to set “a pre-determined rate in a transparent manner” for the vaccines being sold to states and private entities.
In other words, state governments that choose to vaccinate adults in the age group of 18 to 45 will have to purchase vaccines directly from the manufacturers, rather than relying on the bargaining power of the Centre.