States are not happy with Modi’s decision to pass on vaccine costs

On Monday, the Center announced its strategy for phase three of the Covid-19 vaccination campaign in India.

Entered into force on May 1, phase three opens vaccination to all adults over 18 years of age. But it also shifts the burden of purchasing vaccines for the 18-45 age group entirely onto state governments, angering chief ministers and policymakers in various state capitals.

The Department of Health and Family Welfare issued a statement on April 19 saying that vaccine manufacturers will have to allocate 50% of the doses produced at the center. These vaccines will be allocated to states on a fixed formula basis and will only be used for those who are currently eligible for vaccines: health workers, frontline workers, and all adults over 45 years of age.

The statement says manufacturers will be allowed to sell the remaining 50% to state governments and on the open market. Unlike the 50% acquired by the Center, at prices negotiated by the Indian government, manufacturers will be allowed to set “a predetermined rate in a transparent manner” for vaccines sold to states and private entities.

In other words, state governments that choose to vaccinate adults in the 18-45 age group will need to purchase vaccines directly from manufacturers, rather than relying on the negotiating power of the Center.

The policy has not been well received by states.

State officials said the policy of deregulating vaccine prices would add a “heavy burden” to the finances of states already under stress from the pandemic. Officials also added that the policy could cause a delay in the vaccination process itself as it is not clear whether vaccine supply could match demand.

Unhappy states

Talk to, Chhattisgarh Health Minister TS Singh Deo said the decision to leave the price of vaccines to manufacturers would have two worrying side effects.

First, it would increase the prices of vaccines, which would put a heavy strain on the finances of state governments. Second, he said, states will have to compete in the market for the vaccines, which will lead to richer, more enterprising states to corner the doses.

“It doesn’t seem like a thoughtful strategy,” added Deo. “It is the Center which renounces the responsibility of providing vaccines, for which a budgetary allocation of Rs 30,000 crore has been made.”

Importantly, Deo added that states were not consulted before the policy was announced. “It was a unilateral decision which, in our opinion, would completely jeopardize the vaccination campaign.”

Kerala Chief Minister Pinarayi Vijayan also echoed these views. In a letter to the prime minister, Vijayan said states need “assurance that they will not be left behind to compete with free market players” and called on the Center to provide vaccines to states as a public good, free of charge.

Les fonctionnaires d’autres gouvernements étatiques ont eu des réponses similaires.

Un haut responsable du Tamil Nadu, sous couvert d’anonymat, a déclaré que si les questions relatives à l’élargissement de la couverture des vaccins à tous les adultes étaient débattues, «les spécificités liées à l’achat relevaient entièrement de la décision du Centre».

Le responsable a déclaré que la politique consistant à faire des achats par le gouvernement de l’État directement sur le marché mettrait à rude épreuve les finances de l’État et poserait également de graves problèmes logistiques. «Sur les 2,2 millions de personnes éligibles jusqu’à présent à la vaccination [above 45 years and frontline workers], we only managed to vaccinate 48 lakh, ”the official said.

As of May 1, another 4 million people in the state would become eligible for vaccination. And that was at a time when doses for people over 45 are hard to come by. “We don’t know how we could find a manufacturer and buy doses before May 1,” the official added. “People over 18 will surely start approaching vaccination centers on May 1.”

The official also added that a meeting of all officials from the state and the Union’s health ministry was taking place on Tuesday where several of these issues were being discussed.

Odisha (Health) Additional Chief Secretary Pradipta Kumar Mohapatra said the state government wanted dose prices available for states determined by the Center and not by the manufacturers since the cost in the market free would be “very high”.

Add to inequality

Former Union Health Secretary K Sujatha Rao has said that not only will the policy of allowing manufacturers to set prices lead to inequalities between states as their purchasing power changes, but it will also lead to inequalities between states. would also lead to unequal access within states.

She said the Pfizer vaccine, for example, costs around $ 20 per dose, which when sold in India can run up to around Rs 1,500. Since a person needs two doses, the total price would be around Rs 3000 for an individual. “How many in India can afford this vaccine at this rate?” It would only benefit a very small wealthy market, ”noted the former official.

Rao said wealthy pharmaceutical companies are known to be ruthless negotiators. Only the Center has the means to negotiate on a large scale for the whole country.

In fact, she pointed out that by crafting a policy that explicitly allows manufacturers to predetermine prices, states’ bargaining powers were seriously weakened before the buying process could even begin.

Additionally, given the financial burden this places on states, Rao said they may be forced to pass some of the costs on to the people. “The Center did not say it would reimburse the cost of vaccines to states.”