India's vaccine debacle

The world’s second-largest market for vaccines is India. The world’s largest vaccine producer is in India. This should be a simple case of, ‘ergo, problem solved!’ But we have turned this on its head. It is clear that we don’t have enough vaccines.

Citizens stand in long lines for vaccination, and crowding is common. Many will have to take their chances another day because vaccines run out. All this in the midst of a deadly second wave that has caused nationwide havoc. Even if we take the missteps that led us to the misery of the second wave in our stride, the missteps on the vaccines are a new order of failure. The planning, pricing and actual rollout are nothing short of a callous and culpable act for which the ordinary people of India will pay a terrible price—in money spent, in lives lost, and in terms of signalling the pharma giants of the world that India has become a place to make money even in the midst of untold misery.

Barely four years ago, the Government of India under Narendra Modi cut prices of stents by as much as 80% in some cases and stood up to strong lobbies of stent manufacturers and traders. Prices were force-dropped with the intention of making advanced cardiac care affordable to a wide section of people.

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Why then would such a government allow the Serum Institute of India, which makes the AstraZeneca-Oxford vaccine called ‘Covishield’, a juicy deal on a direly-needed vaccine in the midst of a crisis? What is the secret behind this pact that will generate Rs 60,000 crore in revenue, if one is to count just 50 crore people (roughly 40% of Indians) taking two doses each at Rs 600 per dose in the private sector alone? Would this not be a case of usurious profits when even at Rs 150 a shot charged to the Union government, the company admittedly made money? Similar questions can be asked of the other Indian vaccine manufacturer, the Hyderabad-based Bharat Biotech International, the manufacturer of the indigenous vaccine named ‘Covaxin’.

Further, what is the difference between the Union government and the state governments in so far as vaccination for citizens is concerned, with the former paying Rs 150 but the latter being charged a higher price of Rs 400 per dose? After a hue and cry, this price then was reduced to Rs 300 per dose for the states, a drop of 25% “as a philanthropic gesture” that “will…save countless lives,” as the CEO of the Serum Institute of India Adar Poonawalla put it. Isn’t that an admission in some sense that vaccine manufacturers have been allowed to profiteer in so blatant a manner that philanthropy is being invoked to save lives? Bharat Biotech followed suit, reducing the price of its vaccine to the states from Rs 600 to Rs 400 a dose.

Both vaccine manufacturing companies are private sector entities entitled to their profits. They are at the forefront of the war against Covid-19. A pandemic response demands that vaccination coverage be universal and free. With numbers of doses known, orders could have been placed in advance. But the government did none of this.

In the initial days, it paid almost nothing to the companies to support or ramp up production. It has instead now set the stage for public-private sector mismatches that will occur in a differential pricing system. Expect the free vaccine stations to dry up soon. The Central government, under normal circumstances, must advise states to pay no more than it is paying, and negotiate with the suppliers for a bulk order with the Centre-state cost-sharing to be decided as policy. Is it at all possible for a state authority to pay more for any set of goods and services that are bought in bulk at a price negotiated by the Centre, that too in an emergency?

Raises questions

The sudden departure of Adar Poonawalla for Britain at the beginning of the month raises questions. There is likely more here than we know. It is a mirror to the nature of the dealings, and to the hubris, callousness and dressing-up that has been the hallmark of the government’s response to the pandemic.

Consider that on April 19, the prime minister announced a “liberalised and accelerated phase 3 strategy” of vaccination effective May 1 that brought in a public-private and states-Centre distinction in vaccination policy and rollouts. Within two days, on April 21, Serum Institute announced differential pricing for states and the private sector, keeping silent on prices for the Centre. On April 22, Dr Krishna M Ella, the founder-Chairman and MD of Bharat Biotech reportedly said that he would “like to get the maximum price… to recover all costs…”

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Poonawalla is known for his high-flying ways. Dr Ella is known for his simple living. Both have now begun talking the language of profits. This is quite a change from the vision of the founder of Serum Institute, Dr Cyrus Poonawalla, the current CEO’s father, who has often stressed on affordability.Worse, the current pricing games are about a vaccine that has not yet been fully licensed, and is only approved for “restricted use”. Because of this, these vaccines technically cannot be sold, at least not yet.

It may be futile to look to the vaccine-makers for answers when the government of the day is mired in games and projections, not facts and solutions. It would have been possible to stand tall and write a story of grit and growth; to be affordable and profitable. If the vaccine-makers insisted on higher prices, compulsory licensing could have been invoked. We could have said when the time came, we stood together and tall. Alas, we were all pulled down.

(Rattanani is a journalist and faculty member at SPJIMR. Dr John is a retired Professor of Clinical Virology, CMC Vellore, and past President of the Indian Academy of Pediatrics)
(The Billion Press)