India could have bought Covid-19 vaccines within its Rs 35,000 crore budget, if the Centre had negotiated with manufacturers. Now, with base prices fixed, India may need Rs 60,000 crore, but this, too, needs one negotiator, not 29 states, seven union territories and the central government. Our interview with former health secretary Sujatha K Rao
New Delhi: The policy of Prime Minister Narendra Modi’s government to allow Covid-19 manufacturers to fix prices without negotiation is “completely ridiculous”, vaccines “are not a luxury” and must be made freely and widely available, according to India’s former health secretary Sujatha K Rao.
If the Centre’s budget set aside Rs 35,000 crore for Covid-19 vaccination, why should states now fund vaccination?
Rao told Article 14 that was a question “everyone is asking, including me”. If there was no negotiation with manufacturers and the baseline price for the vaccine is Rs 400 or more per dose, then India will need about Rs 60,000 crore, she said.
This means the states will have to pitch in with Rs 25,000 crore, and if that is going to be the case, the Centre has to buy vaccines. “You can’t have 30 states, five union territories and the central government [signing contracts] and procuring the vaccine,” said Rao.
“It's probably one of the most unfortunate policy designs that I have ever come across in my career,” said Rao—a close observer of India’s health policy, governing body member National Health System Resource Centre, a technical support institute of the National Health Mission and author of ‘Do we care? India’s Health System’.
As a devastating second Covid-19 wave raged nationwide, India announced a major shift in its vaccination policy on 19 April 2021: From 1 May, all those above 18 would be eligible to receive a Covid-19 vaccine.
The Centre, thus far responsible for distributing vaccines to states, will now distribute half of future vaccine stocks; states, private institutions and industries at market rates can buy the rest at market rates.
No more than 1.6% of Indians have received both doses of the vaccine, compared (as on 25 April) to 29% in the US, 19% in the UK, 5.3% in Brazil and 4.7% in Sri Lanka. Recorded daily infections nationwide have crossed 350,000, and if they follow this trajectory, will reach 440,000 by 4-8 May and peak at between 3.8 million to 4.8 million between 14-18 May, according to a projection by Indian Institute of Technology scientists, the Hindu reported on 27 April 2021.
While health and frontline workers, those over 45 years will continue to receive vaccines free from the Centre, but those over 18 years must pay for vaccines, unless state governments buy and distribute them free, as indeed some states have announced, including Delhi, Maharashtra, Karnataka, Haryana, Odisha, Jharkhand and West Bengal.
On 21 April, the Serum Institute of India—manufacturer of Covishield, developed by Oxford University and British-Swedish multinational AstraZeneca—announced a price of Rs 400 ($5.3) per dose for state government and Rs 600 ($8) per dose for private hospitals, clinics and anyone else who wanted to buy it.
The rate fixed by the Serum Institute, which has a 90% share in vaccines administered in India, is substantially higher than the price paid by the UK ($3), US ($4) and the European Union ($2.15-$3.5), the Indian Express reported. India’s other vaccine manufacturer, Bharat Biotech, announced that its vaccine, Covaxin, would be sold at Rs 600 per dose to states and Rs 1200 per dose to private institutions.
This means a person below 45 could pay Rs 2,400 for two doses in private hospitals and clinics.
Although India’s per capita public expenditure on health is Rs 1,657, according to the 2019 National Health Profile, or about $72, according to the World Bank, compared to $157 in Sri Lanka, $41 in Bangladesh and $275 in Thailand, the country has kept vaccinations free and run successful mass-vaccination campaigns, including for polio, smallpox and measles.
India should learn from the success of its polio campaign, keep the vaccine free, buy the vaccine centrally, distribute it to the states and conduct a decentralised mass campaign that empowers district collectors to make Covid-19 vaccination a success, Rao said.
Excerpts from the interview:
What do you think of India's policy of opening vaccination for those over 18 and making states purchase their vaccines in the open market?
Well, as you've seen, the eligibility criteria has been gradually expanding. So, it expanded from healthcare providers to frontline workers, then the elderly and then the elderly with comorbidities. And now there’s further expansion to those over 18. So, the problem that arises here is when you expand eligibility criteria, you're increasing demand for the vaccine, and that demand is not in equilibrium with supply. When there's a disequilibrium in the market, then distortions arise. So, the policy is good, everybody should be vaccinated, but first you have to have the vaccines.
India is a lower-middle-income country and has allowed COVID-19 vaccines to be sold in the open market, while even richer, capitalist countries have offered it for free. Your thoughts.
Like all our immunisation programmes in the past, this too, should be free. The money can be shared between the centre and states, but it [Covid-19 vaccine] should be free. As it is, even now, the vaccines should be available in the private sector also.
So, you can get a flu shot in a Medanta or Apollo, which won't be available with the government. There is this dual policy, which is not bad. If you liberalise the import policy and allow other vaccines to come, it is likely that the private sector may go ahead and purchase. Those who have the ability to pay will take advantage of it. That's a very small segment of India's population, but then they're off your back. However the majority, 99% of India's population, will require government intervention for a free vaccine.
What do you think could be the reason for India's vaccine shortage? Do you think that there was a lack of planning?
I think there are two reasons. The government was led to believe that the worst is over and there was a certain sense of complacency, which was the first reason.
The second reason was, in the initial days when Covaxin vaccine was approved, despite not completing its phase-three trials, and AstraZeneca vaccine was throwing up problems, UK and Europe had banned it for a couple of days. So, there was a certain amount of controversy around these two vaccines, which contributed to vaccine hesitancy.
The government also felt that the epidemic was waning. People thought, ‘why do I need to take a vaccine when it's so controversial, when the epidemic is on its way out’. So you may plan… but human perception is a very critical variable.
It's only much later that people came forward. The demand really jumped up in March, April, when the caseload became very high. By then, these two vaccines had been provided to quite a large number of people, and they did not find very serious adverse events. So, there was a measure of confidence.
Also, the government may also have been led to believe, ‘what if we go ahead and buy 500 million doses and stockpile and nobody's there to buy it?’ This did happen [with] H1N1, when we got the vaccines and by the time we got it all into place, the H1N1 had petered out, and people were not interested in taking the vaccine, and there were questions from the auditors.
So, it's very difficult, because these are decisions you have to take on the spot. I think here they were cautious. I think all these factors led to not stockpiling and nobody visualised that the demand would spike so quickly, as it has.
Many countries, such as the UK, procured stocks in advance by signing deals with pharma companies developing vaccines. Could India have also signed some contracts or at least used its vaccine-manufacturing capacity for COVID-19 vaccines?
Wisdom always comes in hindsight. Having said that, I really don't know the nature of decision making in the government of India. If indeed they did consult experts, genuine experts, like public health specialists, epidemiologists and biologists. All these experts would have been able to tell the government that the pandemic is not over and that there will be a second wave, and maybe even a third wave, and that vaccination is a good bet. So, we should invest in science and build up as many vaccine portfolios as possible. I really think that we should have invested in research. We should have done our science and also done a bit of stockpiling.
The companies could have been incentivised to expand their capacity when they had the time because viral infections have become a continuous feature, starting with SARS in 2004; every two years, we have faced a viral outbreak. Be it SARS and Ebola and Zika, then, MERS then H1N1 swine flu, there's something going on.
I do feel that the government felt confident that these two indigenous companies would be able to meet their demand. I don't think they expected the surge we are seeing today.
What are the lessons from India's successful polio campaign that can help guide COVID vaccination?
Polio is the best case study for them (the government) to keep in mind because that was one of the most successful vaccination campaigns conducted in any country. There was a one-nation approach—voluntary organisations, civil society, panchayats, ordinary mothers, private sector, public sector, worked together with the pharma industry. Everyone was committed to the polio campaign, and it was a lot of work, but it paid off in the end. India was able to eradicate polio.
That [is the] kind of effort we need. But then, that was only 26 million children, and this is the whole population minus those below 18. So, if that was one, the effort on this should have been four plus.
Every organisation of any kind, should have been roped in. That would have happened, only if you had decentralised the process to the state and district level so that the district collectors then made a micro plan.
Be it a drop in the case of polio or an injection, the process is the same, you need the cold chain, you need continuous electricity, you need a team to be going out, you need a vehicle to take the team. So, the entire logistic planning is the same. Instead of carrying a drop, you're carrying a syringe. That’s just a matter of detail. The person vaccinating also has to be a bit more skilled, since you're injecting somebody. Barring these little two changes, the rest of the approach and all that is the same. That should have been done.
The price of Rs 600 for a dose of Covishield in the private sector is among the highest in the world. How did India land up in a position paying more than the US, UK and the EU? Even Covaxin announced that they would charge Rs.1200 per dose to the private sector.
It is difficult for me to comment on it, it's absurd. It's completely ridiculous. You're the poorest country, and you're charging the highest from your people. It makes absolutely no sense to me as to how these prices are being determined and why the government is helplessly watching.
If it is the government's policy that you can't negotiate, and you have to buy it at the rate that the companies have fixed, then it's probably one of the most unfortunate policy designs that I would have ever come across in my entire career. You know, it's absolutely strange.
The central government keeps saying that health is a state subject, when it comes to, you know, oxygen demand and management, But preventing and containing infectious disease is a part of the concurrent list. What role does the Centre play during a pandemic?
No, there are two things. Public health is a state subject. That's the reason why you find the chief ministers standing in the forefront, taking responsibility for the oxygen, the medicines, the doctors, the hospitals, the beds. So, that’s true, [as far] as containing the disease goes. If this disease is going inter-state, then the coordinating authority is a central government. So, infectious diseases come under the concurrent list and public health comes under the state list.
That's the legal basis for the central government to be providing funds for TB and malaria and HIV AIDS and immunisation programmes. This is also why they have implemented the National Disaster Management Act, Essential Commodities Act and Epidemic Diseases Act. So for infectious disease, it's a shared responsibility between Centre and states.
There was an outlay of Rs 35,000 crore for COVID-19 vaccination in the budget this year, why should states now fund their own vaccinations?
That's a question which everyone is asking, including me. If you say you can't negotiate and the Rs 400 or the Rs 600 per dose is a baseline and you have to pay that much, then we would need Rs 60,000 crores.
The central government has Rs 35,000 crore, and the state governments have to pitch in the rest. So, either the central government increases its budget or asks the state governments to pitch in. But the procurement has to be done by the government of India. You can't have 30 states, five union territories [there are 29 states and seven UTs] and the central government contracting and procuring the vaccine.
So, once the central government is the sole procurer, the prices will automatically fall and will be within Rs 35,000 crores. So you don't need the states to put in any money. Also the central government also owes money to the states under GST. The [economic] situation is equally bad in the states and Centre. They both have to work out the financing. But they have to procure it centrally and supply it to the states.
Is this what the current policy is doing?
No, the policy design says the central government will only procure 50% for themselves. Now they're trying to make a distinction between the Centre and states, an effort to make it us vs them. But people of India are one people. Therefore, I think they'll have to examine this again more closely and sort it out. Because I don't know how sustainable it is.
Is the COVID-19 vaccination policy moving away from what the health ministry and the government of India has been doing all along?
Yes. This has never happened before. This show is the first time that states are being asked to procure the vaccine on their own. Covid-19 pandemic is affecting everybody. This is not a choice or some luxury.
(Swagata Yadavar is an independent journalist based in New Delhi.)