On April 19, the Indian government, led by Prime Minister Narendra Modi, announced that two Indian vaccines can also be bought directly by the state governments and private hospitals for meeting the additional demand when vaccination would be thrown open to all citizens above the age of 18 years.

Of the two vaccines, Covishield has been developed by Oxford Astra Zaneca, and is being manufactured under licence  by the private company Serum Institute of India (SII). The other one, Covaxin, has been jointly developed by the government-owned Indian Council of Medical Research (ICMR) and Hyderabad-headquartered private company Bharat Biotech, with the latter also manufacturing it. 

Nobody can have any objection to state governments or private hospitals buying vaccines directly from manufacturers, and nobody did indeed raise any. But the problem and politics started soon after with regard to the purchase price of vaccines. And this was clearly a self-goal conceded by the central bureaucracy and the political leadership. None else can be blamed for this.

Flip-flop on prices

The two vaccine manufacturers announced different prices for different sets of buyers. Whereas the central government has been buying vaccines at Rs 150 (USD 2.03) per dose, for the  state governments the price was fixed at Rs 400 (USD 5.42) per dose for Covishield and Rs 600 (USD 8.13) per dose of Covaxin. For private hospitals, the price announced by the two companies is Rs 600 and Rs 1200 (USD 16.26) respectively.

A couple of days later, the price was cut down for the state governments from Rs 400 to Rs 300 (USD 4.07) for Covishield and from Rs 600 to Rs 400 for Covaxin. This flip-flop indicates that nobody ever bothered to negotiate the purchase price for the states and private hospitals. The entire field was left wide open for private businessmen to take advantage of the panic in the public mind and fleece them.

As for the purchase of vaccines, the central government was always in a commanding position. For the whole of last year it managed the pandemic by invoking the Disaster Management Act. The central government has been the sole buyer of vaccine doses from both manufacturers at the same negotiated price of Rs 150 per dose. It has altogether purchased about 160 million doses from the two companies — over 93 percent from SII and about seven percent from Bharat Biotech.

In view of the emergency-like situation and huge requirement of life-saving vaccines in India, the government is legitimately giving preference to its own citizens over foreign countries. A few weeks back, the government even barred the two companies from exporting vaccines even to meet their contractual obligations to neighboring countries like Sri Lanka and Bangladesh. This shows that at all times, the government had and still has the power to commandeer the entire vaccine produced in the country for use of Indians as is done by other countries.

Negotiating a fixed price for everybody or fixing a range or maximum price to be charged by the two companies was comparatively a very small matter. Then why did they suddenly wash their hands off and leave the state governments and private hospitals – and consequently a very vast section of the country’s  population - at the mercy of the two profit-eyeing vaccine manufacturers ?  

Bureaucratic bungling or political decision?

On April 28, SII stated that even the Government of India will not get future supplies at Rs 150 per dose, but has to fork out Rs 400 for a single dose. Two days later, the government claimed that it will continue to buy vaccines at Rs 150. If true, It only goes on to show the central government’s enormous power to force vaccine makers to agree to any price. But for some reasons best known to themselves they didn’t want to do it. Whosoever took this totally avoidable decision, probably wanted to indulge in cheap politics and expose state governments, state ruling parties, including the BJP itself in several states, to public ridicule at not being able to procure enough vaccines at the right price.

It is unclear whether it is a case of bureaucratic bungling or a decision taken at the political level to indulge in avoidable politics. But somebody seems to have gone horribly wrong. Why should there be two prices for purchase of the same vaccine from the same manufacturer?

The central government could have negotiated a common price for the entire quantity of vaccines that it, as also the state governments, needed to purchase. Let’s say Rs 225 per dose —50 percent supplied to and paid for by the Centre and the rest supplied to and paid for by the state governments.

The Centre says it has supplied the entire lot of 160 million doses bought from the two companies at Rs 150 per dose free of cost to the state governments. It says it will continue to do so in future out of its share of 50 percent of the total production of both the companies.

As a mark of goodwill,  India gave free supplies of about 20 to 25 million doses to a number of countries including Bhutan, Nepal, Afghanistan, Maldives, Mauritius, Myanmar, Philippines etc. Almost all opposition political parties have criticised Modi for indulging in vaccine diplomacy at the cost of risking Indian lives. I disagree. I think it was a correct and mature move, particularly keeping in mind that otherwise several poor countries would have had no option other than entering the Chinese fold even at the risk of falling in the notorious Chinese debt trap which has already snared several of our neighbouring countries and about 30 to 40 poor nations in Africa and Latin America.

India’s vaccination drive started from January in government hospitals and specially set up government vaccination centres for health workers like doctors, nurses and other hospital staff and frontline workers like policemen, sweepers etc. From March 1, it was opened for all persons above 60 years and for only those in the 45-plus age bracket who had comorbidities. Later, it was opened for all in the 45-plus age group. 

In the government facilities, the shots were given free of cost and in private hospitals at Rs 250 (USD 3.39) per dose — Rs 150 for vaccine and Rs 100 (USD 1.36) per dose as service charge for the hospitals. It was working beautifully. If one wanted free vaccine, he could go to a government facility. If one was able and ready to pay for it, he could go to a private facility.

Indian manufacturers are claiming their vaccines are the cheapest in the world. According to published media reports a few days ago, following were the prevailing prices of different vaccines in use in different countries:  

(Declared prices per dose in U.S dollars) - Pfizer USD 19.5; Moderna 25 to 37 USD; Oxford AstraZeneca 2.15 for EU; 3 to 4 USD UK and USA; Johnson and Johnson 10 USD; Sputnik V 10 USD; and China’s Sinovac 60 USD in China and 30 USD for other countries.

Covishield export price is not known but Bharat Biotech claims that it can export at Rs1100 to Rs 1500 per dose (15 to 20 USD).

Vaccine politics

It is not that there has been no politics on the vaccination issues. The politics is on shortage of vaccines, erratic supplies, particularly of oxygen. The opposition claimed that Prime Minister Modi, Home Minister Amit Shah and other central ministers were busy campaigning for the assembly elections in four states (Assam, West Bengal, Tamil Nadu and Kerala) and one union territory Puducherry.

Then there are the religious mass congregations like the recently held Kumbh Mela at Haridwar in Uttarakhand, where an estimated 3.5 million people are supposed to have gathered and taken the holy dip in the Ganges. The thrust of the opposition charge is that the central government’s political leadership attached far greater importance to winning elections rather than preparing the country for the ‘second wave’ of the dreaded virus. The opposition charges are not entirely unfounded

Herd immunity

India still has to go a long way to go in complete vaccination. India’s current population is estimated to be over 1.39 billion. In 2019 when the last Lok Sabha polls took place, country’s population was over 1.36 billion and registered voters (according to Election Commission data) were over 910 million. We can safely assume that another ten percent above the age of 18 might have been left out of the voter list for some reason or the other. So, the population in age group 0 to 18 that would have been 370 to 380 million, now around 390 to 400 million. So presently India needs to vaccinate almost one billion people. 

But most experts agree that the country can reach ‘herd immunity’ if 70 to 80 percent of the population is fully immunised.  That comes to a population of 1.05 billion, for whom 2.10 billion doses are needed.

In the last three to four months, the authorities have been able to put together only 160 million doses which is just eight percent of the needed quantity. The two manufacturers put together produce about two million doses daily. The government has recently sanctioned an advance of Rs 30 billion (USD 406517400) to SII and Rs 15 billion (USD 203258700) to Bharat Biotech. Both have promised to ramp up their capacity to about four million per day from July/August.  Dr Reddy’s-- another large pharma company of India—has  got permission to  import/manufacture in India the Sputnik V vaccine of Russia. 

The first consignment of imported Sputnik arrived in India on May 1 — the day of roll-out for the age group 18 to 44. Some more vaccines are being imported from other countries - American companies Pfizer and Moderna are also in talks - and also in the offing are more licenses to some Indian companies to manufacture the India-developed Covaxin.

If everything goes well, and the government is able to vaccinate the targeted population, India may reach so-called herd immunity only by early 2022.

(The writer is an entrepreneur and a former legal correspondent. The views are personal. He can be contacted at vinod.aggarwal@uniliftcargo.com)