'More space must be given to public health experts in designing the vaccine'

After the Union government rolled out its new vaccine policy last week there has been debate surrounding the pricing supply and subsidies for the jabsAccording to the announcement dated April 19 Indians above 18 years will be eligible for vaccination from May 1In the earlier process the Centre procured vaccines from Serum Institute of India and Bharat Biotech and distributed it to state governments who made it available to vaccination centres The current process calls for vaccine manufacturers to supply 50 per cent of monthly released doses to be allocated to the government of India and 50 per cent to be assigned to the open market where state governments and private hospitals may buy the vaccines directly from manufacturers at prices set by them This situation raised several questions about how supply would be prioritised how much the Centre would have to spend versus the states and how much Indians would potentially have to pay for vaccinesMidDaycom spoke to Reetika Khera development economist and associate professor at IIT Delhi to understand the concerns and implications arising from the policyHere are edited excerpts from the interviewHow might the Government of Indiarsquos current vaccine strategy impact state economies and public health in the Covid19 crisisA fundamental point is being missed in the public discussion about vaccination in India There are ldquopositive externalitiesrdquo associated with vaccines this means that if I get vaccinated not only do I benefit from it others around me also benefit For such positive externalities a standard prescription in economics is a government subsidyIt is in everyonersquos interest right now to push for vaccination for all Remember to be fully effective the Covid19 vaccination requires that 5080 per cent the herd immunity threshold of the population be vaccinatedThere are three major hurdles The first is a supply bottleneck stemming from the fact that only two producers are allowed to manufacture the vaccine Serum Institute of India SII and Bharat Biotech The intellectual property rights IPR regime prevents other Indian manufacturers from producing it There is a provision that allows us to get around this bottleneck The government needs to use compulsory licensing CL a provision in the WTO World Trade Organization that allows governments to grant a license for production without the consent of the patent ownerThe supply bottleneck in turn is creating the second problem differential pricing SII plans to sell the same vaccine at Rs 150 Rs 400 and Rs 600 Bharat Biotech has announced that it will sell its vaccine at Rs 600 to the state and at Rs 1200 to private hospitals Such differentials amount to price gougingIPRs are creating artificial shortages and hurting a positive feature of the market whereby supply would catch up with demand quickly For Covid19 at least patents must goAs if price and supply hurdles arenrsquot bad enough the government is also creating technological hurdles A pandemic is the wrong time to test beta versions of new technologies eg facial recognitionphoto verification or pushing Aadhaar in other ways In fact it is criminalIf the vaccine is not free what kind of hurdles does it pose in the acceptance of vaccinationOn the one hand there is vaccine hesitancy for instance due to the hasty manner in which the Bharat Biotech vaccine Covaxin was given approval On the other hand the large and unmasked gatherings at the Kumbh Mela at election rallies and elsewhere suggest that many people have not grasped the enormity of the situation how infectious and deadly Covid19 can be That will translate into ldquovaccine superfluityrdquo ie people who believe that a vaccine is not required Such people are unlikely to pay to get vaccinatedFurther if the vaccine is not free many of those who want it may not be able to afford it For instance the price fixed for state governments Rs 400 per dose by Serum Institute of India SII is higher than a daysrsquo NREGA National Rural Employment Guarantee Act wage in most states Half of the vaccines were earmarked for sale in the open market with the expectation that this will stimulate supply and free up resources to vaccinate the poor What is your view on that expectation Free markets will not magically solve public health problems They cannot In fact markets often exacerbate them We are witnessing catastrophic market failures right now look at the supplies of basic medicines oxygen Covid tests etc supply isnrsquot matching demand price gouging is widespreadThe market solution for vaccines is neither efficient nor equitable For the vaccine if Bharat Biotech is allowed to charge its proposed price Rs 1200 per dose from the private sector not only will those who can afford it be losers it will also mean that supplies to those who cannot afford it will be delayed Bharat Biotech will obviously prioritise private ordersIt is one thing to allow a private market in vaccines but allowing SII and Bharat Biotech to charge whatever they like in an international health emergency is completely unacceptableWhat model should be followed by the government for an accessible and equitable vaccination process both in cities and in rural areas Ideally the government should ensure free vaccination for all above 18 years ndash whether administered at government centres or privately Further it should negotiate a single price with all the producers including those who will be allowed to produce it under compulsory licensing The government must supply it free through its health centres It must ensure that there is adequate supply at all public health centres hospitals community health centres and public health centres It should be free available on demand including walkin facilities and without any conditionalities or stringent ID requirements These measures will ensure equity and quick scale upWhether paidfor private vaccination should be allowed is the next question Perhaps if the private sector charges the centrally fixed price and serves the purpose of speeding up administration it could be considered Central control over the supply price is important because if the private sector is allowed to negotiate a higher price with producers manufacturers will prioritise supplies to the private sector hurting the poorMore broadly much more space must be given to public health experts in designing the vaccine strategy eg should there be priority groups if so who should be in it Right now technocrats and business persons seem to have disproportionate influence in these discussionsIn a crisis like this what role do vaccine manufacturers have while setting the price for the vaccines What kind of checks and balances are needed To ease the supply bottleneck we must immediately invoke compulsory licensing so that many more manufacturers can produce it That might reduce prices through increased competition and will boost domestic supplyIf there are more private producers the cash flow constraints currently facing SII and Bharat Biotech can also be eased If necessary the government can help ease those using the Rs 35000 crores that was set aside for vaccines in this yearrsquos budgetThere is precedent for keeping the patent open in the 50s after Jonas Salk invented the polio vaccine he was taken aback when he was asked who owned the patent In response he said ldquothe peoplerdquo ldquoCan you patent the sunrdquo he askedIn the nineties when AIDS was ravaging lives Yusuf Hamied of Cipla agreed to supply medicines at 350 for a yearrsquos supplies when others were charging 8000 This helped save millions of livesThis is in sharp contrast to what wersquore seeing in India todaySome have raised quality concerns if compulsory licensing is brought in The Indian pharma industry is capable of producing these vaccines on massive scale while maintaining quality protocols Thus the governmentrsquos role here is to invoke compulsory licensing to stimulate production get manufacturers to declare their manufacturing costs and regulate prices and very importantly ensure quality controlWhat kind of effects will the current surge of Covid19 have on people and the economy and how long will recovery takeI believe the question to ask is how long will it take for people to recover from this economic health and humanitarian shock That depends on whether and to what extent the central and state governments rise to this challengeLast year when the national lockdown was announced by the central government there was reluctance to provide economic relief yet the central government felt compelled to do something This year the central government is not imposing a lockdown allowing state governments to devise their own localised curfews or lockdowns As far as locking down is concerned decentralised is a better strategyYet this does not mean that the central government can wash its hands off its obligation to support states at this time The only relief announced so far is to provide 5 kilo grain per person per month to those who have access to the PDS around 80 crore people But we saw last year that when economic activity is halted the ones who need support the most are migrant workers For them the Centre needs to provide grain to the states so that they can either run community kitchens serving free food during lockdowns or provide dry ration kits to such people