Roll-out and costs

Now that it appears that more than one vaccine candidate for Covid-19 will have sufficient efficacy to be approved by regulators, questions are beginning to be asked about how it will be administered, along what timeline, at what cost, and at whose expense. These are essential questions, and the answers should be informed by a careful analysis of the available evidence by independent impartial experts. Prime Minister Narendra Modi, when addressing a group of chief ministers last week, indicated that a “national expert group” had been constituted and it included not only scientists but also bureaucrats to co-ordinate the vaccine roll-out. The Union government has indicated that its initial priorities for vaccination will be 10 million health workers, followed by 20 million “front line” workers, such as the police and municipal workers. This differs slightly from some other roll-out plans — in the United Kingdom, for example, the first shots are being given to those most at risk from the disease, namely the people above 75. Many questions are unanswered. For example, will all private health care workers be eligible for the vaccine, or only the public ones? Will temporary employees in the health care industry be eligible, or only those with permanent jobs?

The question of payment for the vaccine should not be allowed to slow the roll-out. If the Union government pays for every Indian to be vaccinated, it will be a significant — but far from unbearable — cost. If every Indian received the two-shot AstraZeneca vaccine at $3-4 a dose, then the cost of the vaccination programme would be of the order of Rs 1 trillion. Some question of proportion is required here. Such a cost might well make a major dent in the fiscal numbers. But it would be small compared to the overall cost to the economy of social distancing and other pandemic-related headwinds. Of course, the question is how much of this cost the government will have to pay for. The prime minister has indicated that the cost burden was an issue that would be discussed with the state governments. Ideally, there would also be a private-sector component to the vaccine roll-out, where moderate profits are made, so as to ensure that those who can afford to pay more do so, which would allow the government to save a reasonable amount.

The Union health secretary has indicated in the recent past that India will not have to vaccinate every Indian, which some contend might bring the cost down further. Certainly, 100 per cent vaccination is rarely required. However, more information is required as to how the vaccines operate before a proper threshold for achieving herd immunity can be calculated. In particular, the data on initial trials has revealed the degree to which the AstraZeneca vaccine can prevent a severe incidence of the disease. But the degree to which it can prevent infection is something different, especially given that Covid-19 can spread asymptomatically. Thus, while the costs might come down marginally if there is also a private-sector pipeline and less than total vaccination, there is no doubt that it will remain substantial — and that is not even including the additional infrastructure investment in cold chains and so on, which might be required. The Union government is right to consult the states on cost burdens — but in the end, given its superior borrowing capability, the Union should take the lead on financing and procurement to the extent required.



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