The Prerogative price of covid-19 vaccine

The recent developments surrounding vaccines and their price is a very undesirable one. With the surge in covid cases and shortage of vaccines, GOI has allowed the states to buy vaccines directly from manufacturers. And welcoming this step, the Serum Institute of India in the media statement release priced the vaccines to states and other stakeholders. However, the prices are not uniform despite being the same vaccine to all. For state govts. the price is fixed at rs.400 per dose and to other private stakeholders, it is fixed at rs.600 per dose. So far, the GOI is purchasing the vaccine at rs.150 per dose. 

Earlier, the GIOI capped the price at rs.250 per dose if administered at private hospitals. It is to be noted that the rs.250 is the maximum price to be charged to the end customer. If SII is charging the private hospitals at rs.600 per dose then the private hospitals could charge the end customer as much as 2x or even more. Further, neither GOI nor state govt. has capped the price at which the private hospitals should charge the vaccine per dose. This is against the fair principles law of one price and also arbitrary. Also, it could rise the black marketing of vaccines. SII has not given any reason for price differences. Further, SII didn’t mention if the price being charged for central govt. remains the same and in foreign markets in its media release.

Many states were already in financial constraints with loss revenues starting from day 1 of phase one lockdown announced by PM Modi and also the non-fulfilment of GST dues in 2020. Giving the autonomy to states on vaccine purchase is laudable and only when the threshold population is vaccinated. At the same time price difference is condemnable. Also, it undermines the concept of cooperative federalism by letting the states purchase vaccines on their own at higher prices, cleaning off their hands. Every state might not have equitable access during the deadly second wave. Some states might take advantage of the territorial location of vaccine manufacturing hubs like as SII in Maharashtra and Bharat Biotech in Telangana.

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Further, the price to private market and non-cap of vaccine to end customer will lead to black marketing and exploitation of patients. Recently, Maharashtra police have seized the huge amount of Remdesivir vials in Mumbai. There might be such chances of illegal hoardings in private market if not regulated strictly. Counterfeit drugs account for 25% in India either they are substandard or fake. ASSOCHAM reported that fake/counterfeit drug could be $10 Billion market by 2017. This indicates the potential to a fake COVID-19 drug. Over charging of prices is quite common in private hospitals. Those who are in the urgent need or dire situation will somehow manage to buy at higher costs in private hospitals. But what about the patients who can’t afford the vaccine? Nearly, 62% of India’s spend out of pocket money on health. It will be just like first come-first purchase policy. The price policy to private entities seem to be bourgeois and prerogative.

The price of the vaccine has been quite controversial for some time especially in the political circle. During the Bihar elections, the Finance minister of India promised free vaccine to all in the state if brought to power. A month after administering the first jab, GOI said that the price of a dose at private hospitals should be maxed at rs.250. Also, the GOI claimed to have launched the world’s largest vaccination program. Further, the PM launched tika ustav on April 11-14 for mass vaccination. By the time tika ustav was about to begin, many states have claimed that they were run out of vaccines. Despite all this, only 1.3% of India’s population is fully vaccinated. Interestingly, India exported some 6.6 crore doses to 94 countries. This was approximately the same amount of vaccines administered to India’s population(both 2-jab). Further, an RTI by @SaketGokhale revealed that the vaccines exported were purchased through the PM-CARES fund which is not a public entity as claimed by GOI.

Earlier this month the CEO of SII requested the President of the USA to lift the ban on the embargo of raw material exports to boost its vaccine production. Any way the Biden administration has denied that there are any ‘outright bans on the export of vaccine raw materials(The Hindu, April,21). Very recently, India granted the SII 30 billion rupees to boost its vaccine capacity from the existing 7o million doses to 100 million doses per annum. 

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