Simply put, a bulk procurement of vaccines by the Indian state would have been the right way to go for it, rather than making states fight each other and spend exorbitantly.
As the second wave of Covid-19 pandemic started to overwhelm India’s healthcare system, with people lining outside pharmacies and hospitals to get life-saving medicines or beds for patients, there came sudden and obvious realisation in the masses as well as in the administration that the country was really not prepared for such a massive wave of infections. It was also realised that if there was a third wave to come, India needs to vaccinate as many people as it can to not falter as it did during the second wave. Those who closely saw the horrific second wave unfolding in front of their eyes demanded answers from the government on why, despite starting the vaccination drive in January, India could not even vaccinate the priority groups completely.
As India scrambled to contain the new variant of the virus possibly responsible for the second wave, and as India’s young fell into the clutches of the deadly virus, the uproar over lack of vaccination started gaining momentum. Opposition targeted the centre over the lacklustre planning of vaccination drive and demanded to open up the vaccination drive to everyone rather than just to the frontline workers and those above 45.
Liberalised Vaccination
Bowing down to the huge pressure from all ends, the Centre on April 19 announced its decision to open the COVID vaccination drive for all above the age of 18 from May 1. The decision came after Prime Minister Narendra Modi held a series of review meetings with the medical fraternity and pharmaceutical manufacturers over the ever-worsening situation of COVID-19 in the country, and the ongoing vaccination drive.
However, there was a catch. Amid a host of changes to the vaccination policy, the Narendra Modi-led government also said that states can buy the coronavirus vaccines directly from manufacturers — who can release up to 50 per cent of their supply for this purpose at a “pre-declared price”.
Manufacturers, however, have to supply half their output to the Centre, which will also release these doses, based on the number of cases and wastage, to states via the Central Drugs Laboratory. The rest can be sold to the states directly.
This, however, was not something the states expected from the centre as they were already facing cash crunch and had barely recovered from the economic losses the earlier lockdowns caused.
At the same time, the two domestic manufacturers of the vaccines- Serum Institute and Bharat Biotech- could not produce the quantity of amount required by the states. They said they could not ramp up vaccine production on such short notice. It should also be noted that India gave away or sold away 66 million vaccines to countries across the world without securing supplies for its own people first.
These developments forced the Indian states to float global tenders to procure vaccines. In this article, we discuss what happens when multiple states from a country float global tenders at the same time for life-saving vaccines.
States Fight Each Other
As it became abundantly clear that the states would have to procure vaccines on their own, Delhi CM Arvind Kejriwal took to Twitter to protest the move. He said the fact that the states are left to competing and fighting with one another in the international market for COVID-19 vaccines portrays a “bad” image of India.
The Centre should procure the vaccines on behalf of the states, he said in the backdrop of a shortage of the vaccine doses in Delhi and many other states.
Kejriwal’s tweet resonated with many who thought it will be irrational for Indian states to fight and bid against each other for vaccines globally. This is perhaps the first time that Indian states will bid against each other for something as necessary and life-saving as vaccine doses.
“Indian states left to compete/fight with each other in the international market. UP fighting Maharashtra, Maharashtra fighting Odisha, Odisha fighting Delhi. Where is ‘India’? Portrays such a bad image of India. India, as one country, should procure vaccines on behalf of all Indian states (sic),” the Aam Aadmi Party chief said in a tweet.
Negotiation Power
In another tweet, Kejriwal said India approaching the vaccine-manufacturing countries will have much more bargaining power rather than the states doing it individually. The Indian government has much more diplomatic space to negotiate with such countries, the Chief Minister added.
The Delhi Chief Minister was precisely on point in his narrative.
If tender was floated by the centre, the number of vaccine doses would have certainly increased many times than that of individual states. With such a massive quantity, and with the powers that come as a perk for the government of the world’s largest democracy, the centre could have negotiated the prices of vaccines better. At a time when the country’s economy has slowed down drastically and states are struggling to make the ends meet while handling the second wave of the pandemic, it would have been really dutiful of the centre to make an order for all states on its own.
Simply put, a bulk procurement of vaccines by the Indian state would have been the right way to go for it, rather than making states fight each other and spend exorbitantly when their treasuries are almost empty.
Monetary Capabilities
When it comes to procuring vaccine doses, how will a state like Bihar, which has a GDP worth 110 billion US dollars, will fight a state like Maharashtra, which has a GDP worth 526 Billion US dollars? Poor states can and will not be able to afford expensive global vaccines, while rich states can procure them without feeling much heat. According to the analysis of population and state budget data of poorer states by IndiaSpend, India’s most socioeconomically backward states may have to spend as much as 30% of their health budgets to procure COVID-19 vaccines for their populations.
The eight states– Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha, Rajasthan, Uttarakhand and Uttar Pradesh– are among 20 that have announced COVID-19 vaccination free of cost for persons aged 18 to 44 years. They would have to shell out as much as 23% if they were to procure only Serum Institute of India’s (SII) Covishield, and up to 30% for Bharat Biotech’s Covaxin, IndiaSpend’s analysis has said. Among these, Uttar Pradesh and Odisha have also floated global tenders which might cause them more than the aformentioned percentage of their health budget if the order goes through.
Don’t Get Your Hopes High
As per News18 report today, several States in the past fortnight have placed global bids for a total of 21 crore vaccines doses, fixing deadlines of three to six months for the stocks to be delivered in batches. But this could turn out to be more a cosmetic exercise given the global crunch for vaccines amidst big advance orders have been booked by various countries for the vaccines.
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