Serum lists one price for Centre, one for state govt; unprecedented and unfair, say states

Top Central govt official says open market will stimulate supply, free up resources to vaccinate poor.

With the Central government earmarking 50 per cent of vaccines for sale in the open market, several states and even policy makers within the establishment are disturbed by a differential pricing announced by Serum Institute of India Wednesday, raising doubts about vaccine equity and fair inter se distribution amongst states and between states and private hospitals.

Serum Institute announced two pricing buckets for Covishield: Rs 400 per dose for states, and Rs 600 per dose for private hospitals. The company sells Covishield to the Centre at Rs 150 a dose. While the pricing has been announced by Serum Institute, sources close to the development said it was unlikely the prices were arrived at without the knowledge of the Central government.

“It (differential pricing for the Centre and states) is stupid, inexplicable. I don’t know what’s going on,” said a top policy maker linked to the establishment.

Speaking on the condition that he not be named, he said he had not been consulted.

Another policy maker who, too, was not consulted, said there was merit in allowing open market sales since profits therein will incentivise the private sector to ramp up production. Asked about different rates for two governments, the Centre and states, he said: “The question of cooperative federalism is a different argument.”

In a press statement Wednesday, Serum Institute said, “For the next two months, we will address the limited capacity by scaling up the vaccine production. Going ahead, 50% of our capacities will be served to the Government of India’s vaccination program, and the remaining 50% will be for the State governments and private hospitals.”

What has rankled states is the lack of clarity over two key aspects:

One, will it be Serum Institute, a private player, which will decide the distribution of vaccine doses amongst states? If so, on what basis — will it be first-come, first-serve or in proportion to the population to be vaccinated or severity or volume ordered?

Two, what criteria will it use for inter se distribution of vaccine doses between states and private hospitals? How will Serum distinguish between orders from a large metropolitan hospital – more lucrative – and that from a smaller private nursing home?

These questions haven’t been addressed, said the Chief Secretary of a state, which is witnessing a sharp surge in Covid-19 cases. “Given the nature of the country’s federal structure, a differential pricing for a public good is unjustifiable. That, too, for a vaccine being produced under EUA (Emergency Use Authorisation). What about the spirit of cooperative federalism?”

A Secretary-level officer in the Central government involved in the discussions said the Centre will fully fund the ongoing nationwide vaccination programme for 45-plus. “Some states like Maharashtra made a clamour for expanding it universally, and criticised the Centre’s method of expanding the eligibility for vaccination, and many others in the intelligentsia wanted open market sale,” the officer said.

But there is little clarity on the process going further. “The decision on inter se distribution, etc is for the Union Health Ministry to take. The true merits of the move are: giving pricing flexibility for the additional 50 per cent vaccine output will stimulate supply and the non-poor, willing to pay, people will free up resources for the poor and needy,” the officer said.

But states are not quite buying the argument. “The thinking seems to be that only 45-year plus citizens deserve this; administer vaccines free of cost to them. Below 45, it is the states’ call. Whether the state picks up the tab or the consumer pays for it, let the state decide,” said the Chief Secretary.

A senior official in another state said that they have not yet received any official information from the Union Ministry of Health and Family Welfare. “Yes, of course. We are astonished… the Government of India and the state government being treated as separate for purposes of a vaccine in times of pandemic. Are we less deserving entities?” the official said.

Another senior official in a BJP-ruled state said, ideally, the Central government should intervene, and set objective and transparent criteria for Serum Institute to allocate vaccine doses to states.

“Only pricing can be left to the manufacturer, the distribution should be fair,” the official said. A clear fortnightly timetable on allocation of doses from May 1onwards would help states plan in deciding which segments of the population to prioritise for vaccination,” the official said.

The Secretary-level officer, however, contended that intervention on pricing or distribution was possible only when vaccination was rationed. “But in a dual market system, with open market sales now being allowed, how can pricing be controlled,” he said.

Source: The Indian Express

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