In an affidavit produced by the Central Government to the Supreme Court in a suo moto case questioning the management of the COVID-19 crisis by the government, the government has provided justifications for its recent actions related to vaccine pricing and distribution.
Currently, states and private hospitals have to procure vaccines from manufacturers, at prices that can vary from the price at which the central government purchases the vaccines.
According to the affidavit, such differential pricing is done to “instill a competitive market” among manufacturers so as to produce more vaccines. In addition it is said to attract foriegn manufacturers into the country. In actuality this has led to inevitable overpricing of vaccines that comes with handing over the sale of the same to private players. This liberalisation of vaccines in India has allowed private players to make “superprofits” out of the pandemic.
In a hearing on April 30th, the court questioned the government’s move of differential pricing, by pointing out the difference in sale of vaccines in the US and India.
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“AstraZeneca is providing vaccines at far lower price to the US citizens then why should we be paying so much? Manufacturers are charging you Rs. 150 but Rs. 300 or 400 to States. Why should we as a nation pay this, the price difference becomes 30 to 40,000 crores?”
In response, rather than any mention of regulation, the government responded with an assurance that “informal consultations” will be taking place between manufacturers and the government so as to keep prices uniform across states. This does not address the high pricing in the first place however. The terms are purposefully kept vague so as to keep up the guise that some form of regulation and state is taking place.
In the affidavit released by the government yesterday regarding the sale of vaccines for the age group 18-45, the government has given assurance that it will be free of cost for everyone. This mostly comes from the fact that state governments have taken up the policy of providing vaccines free of cost to all citizens. However, the policy of vaccination also mandates that 50% of the vaccines will be sold by both manufacturers to the central government. The rest of the 50% of the quantity is sold to the states. Within this 50%, there is yet another division, whereby only 50% is going to be sold to states, the rest will be sold to the private sector. The rationale for this is to ‘reduce the load off of public vaccination services’.
However, what will happen if there are not enough free vaccines to account for everyone who can’t afford to pay? With vaccines being sold at high prices in the private sector, it will be nearly impossible and financially debilitating to access for many people. In this way we can see how the government wants to encourage making profits out of vaccinations, and draw in more foreign manufacturers. All the while, poorer sections of the country will not be able to vaccinate and protect themselves against the virus.