States seek clarity on Covid vaccine price as they gear up for phase 3

Asking the states to buy directly from the manufacturers without any price controls could also lead to a bidding war among them, or even between states and the private sector.
Following the Centre’s announcement on Monday that anyone above the age of 18 would be eligible for vaccination from May 1 and that manufacturers would supply 50 per cent of the ordered doses to the Government of India and 50 per cent to the state governments and the open market, states have sought clarity on the price at which they are supposed to buy the vaccines from the manufacturers.


Though the announcement does not explicitly say that states will have to buy the vaccines, that seems to be inference, since it does say that manufacturers would make an advance declaration of the price of the vaccines that would be available to state governments and in the open market.


“We are awaiting a formal notification from the Centre. We have not begun the process of procuring the vaccine for the third phase because there needs to be some clarity on pricing. It is the Government of India which will have to fix a certain price or provide a formula,” said a senior health department official in Rajasthan. Gujarat’s state immunisation officer Nayan Jani, too, maintained that without a formal notification and clarity on pricing, no step can be taken in this regard. No major country has allo­wed Covid-19 vaccines to be available in the open market, nor allowed their prices to be determined by market forces.


Multiple states have also flagged the current shortage of vaccines, which could get aggravated after May 1.  


“Monday’s decision is a welcome step as it allows people above 18 to be inoculated. But at the same time, it is like playing with the dynamics of the existing limited supply of the vaccines,” Chhattisgarh health minister TS Singh Deo told Business Standard.


On Tuesday, Maharashtra housing minister Jitendra Awhad tweeted that the state cabinet had unanimously decided to request the Centre to allow Maharashtra to import Covid vaccines available in the international market. “Output of vaccines in India is limited. We have a population of 130 million in the state and local production may not suffice,” he tweeted.


In her letter to Prime Minister Narendra Modi, West Bengal chief minister Mamata Banerjee, too, raised the issue of vaccine shortage and termed Monday’s announcement as “hollow, without substance and a regrettable sh­ow of evasion of responsibility by the Central Government at the time of crisis”.


Banerjee stated that the announcement did not address major issues like ensuring the quality, efficacy, and stable supply of the required number of vaccines by the manufacturers and also the price at which they were to be purchased by the states.


“It is apprehended that the announced policy might lead to unscrupulous mechanisms in the market, including pricing of vaccines as it appears to be based on market prices which may put the common people under huge financial burden. More importantly, the supply would also become very erratic because the vaccine manufacturers are hardly prepared to scale up their production capacities to the desired levels to meet the nationwide demand,” Banerjee said in her letter to Modi.


Banerjee has urged the Centre to come up with a “fair, transparent and credible” vaccination policy that addresses all the issues and enables citizens to get vaccinated urgently and at affordable prices. States believe that the Centre should continue to control the price of vaccines and that they should be equitably distributed among them instead of them being asked to buy directly from the manufacturers. This would lead to a substantial rise in the price of vaccines, unless the states decide to subsidise them, which is unlikely, given the financial doldrums most states are in. 


Asking the states to buy directly from the manufacturers without any price controls could also lead to a bidding war among them, or even between states and the private sector.


Deo said that not ramping up production and making enough vaccines available to the balance 40 per cent of the population (the 18-45 age group) would be tantamount to doubling the population to be covered by halving the supply.


He also questioned the Centre’s move to back out from providing vaccines to the states in the third phase, especially when there was a budgeted allocation of Rs 30,000 crore for vaccines for the states. The Chhattisgarh chief minister, Deo said, would take up the matter with the Union health minister and ask for a reconsideration.


State government officials say that when the vaccination drive had started, the Centre had targeted 800 million people to be vaccinated and it was supposed to have placed orders for 1.6 billion vaccine shots. So if they now divide it up and make 50 per cent of it go to itself and the balance to the states, it would not be a fair distribution, they say.

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