Issues with new Covid-19 vaccine policy in India
I have some questions about new vaccine policy. I read press release by the Govt and i could not understand some things. If i have misunderstood any details, please clarify & correct me on them. The press release is available here.
1. What is "open market" pricing? Will states have any power of negotiations and/or regulation with the vaccine makers on vaccine prices? Will open market pricing be same across all states or vary from state to state? Does order of 250 Rs per dose centrally regulated vaccine prices in private hospitals stands repealed? Can states regulate vaccine prices in private hospitals?
2. Why State Governments are forced by central Govt to procure vaccines at open market prices? India is a cooperative federalism nation model with center and state government both sharing power structure. Can center direct states to buy vaccines on market pricing while center itself buy vaccines at regulated & negotiated pricing?
3. What is the rationale behind forcing states to buy vaccines at open market pricing? The states bear the primary responsibility and fiscal burden of their healthcare system. Overall, central government spends around 35% on national healthcare while states spend 65%. The states have much broader healthcare infrastructure, management responsibilities and outreach compared to central healthcare in states. Wouldn't it make more sense for states to take the lead in vaccination program? Wouldn't it make more sense in procurement of vaccines for states on regulated & negotiated terms?
4. The finances of states are already in big crisis due to pandemic induced economic depression. The states are facing revenue shortfalls & central Government is doing very little to help them. While states finances are revenue constrained, the central government as a sovereign currency issuer has no such constraints. In this pandemic induced depression, the job of central government is to expand fiscal deficit to support the economy.
Why central government is putting additional burden on states by forcing them to buy vaccines in open market?
5. Central Government say that states will have liberty to import foreign vaccines & utilize them as they wish. Will central government allot any additional funding to states who want to import foreign vaccines? Or does states have to bear the burden of imported vaccines on their own?
6. Why state governments and private sector are made to compete against each other in open market for procurement for 50% of vaccine production? Can vaccine makers also sell any production to foreign buyers? What is central government position on vaccine maker's dealings with international buyers (foreign nations, Covax, Bill Gates etc)? Does Indian Government, State governments & private sector (basically domestic Indian market) will be the sole owners of vaccines produced in India? Has central Govt allowed a specific quota for exports?
7. Center will allot vaccines to states on some criteria (still unclear) which will factor the wastage of vaccines. Center can penalize states for wastage in dispensation of vaccines. This is completely against the spirit of healthy center-state relationship. Whereas states should make their vaccine distribution system more efficient, any wastage of vaccines due to some reasons are completely unintentional. The penalization and step motherly treatment of states is completely unwarranted.
8. Who created this new vaccine policy? What are details of deliberations, consultations, legality & financial basis of new vaccine policy? Has central government consulted states in drafting this policy?
9. Vaccine companies claimed that they are facing financial and production stress in recent weeks. Central Government is giving advance payment of 4500 crore Rupee to vaccine makers (3000 Cr to SII & 1500 Cr to Bharat Biotech). This will give financial security to company & also help them to expand manufacturing capacity. Why was it necessary for Government to partially deregulate vaccine prices even after government giving huge financial security to companies?
Update - As per Business Standard news, SII will charge 150 Rupee per dose for first 100 million doses to Central Govt as per the past agreement. Of the 100 million doses, 30-40 million doses remains to be delivered. Beyond this delivery, both central Govt & State Govt have to pay 400 Rupee per dose for future purchases. The private hospitals have to pay 600 Rupee per dose to SII. Private hospitals may charge people some additional costs for final delivery & dispensation of vaccine.
Update 2 (30 April 2021) - I am thinking of analyzing vaccine policy but there's hardly any clarity on it. The vaccine makers raised their prices after deregulation, but Govt objected to high prices, vaccine makers (Covaxin & Covishield) cut their price again. SC has also jumped in this confusion over vaccine policy. Govt announced that 18+ age would be getting vaccines from tomorrow that is 1st of May but there is no adequate supplies of vaccines to do that. I don't have any idea what our new vaccine policy. Lets wait for more information.
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