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The Price of Protection

Back in January 2021, when the first successful vaccine was announced, people all over the world envisioned a light at the end of the tunnel. We were under the impression that this somehow meant our pre-pandemic lifestyles would soon resume. In many countries, this was true, and some state of normalcy has already been restored. In India however, as it turns out, developing the vaccine was only the first in a series of hurdles created by this pandemic. With our manufacturing process in place courtesy the Serum Institute of India (SII) and Bharat Biotech (BB), our nation now faces the next herculean task that is distribution.

There is a severe shortage of vaccines available in our country, and the blame for this deficiency is being deflected skilfully by the authorities and manufacturing companies respectively. Adar Poonwalla the CEO of the SII stated that he is being victimised unfairly as the government failed to order the necessary number of vaccinations in a timely fashion, and only added on additional orders once the situation worsened. Meanwhile, the government claims that they had given sufficient advanced notice and payments to both the manufacturers.

Amidst the confusion, some people are beginning to wonder whether this extreme shortage is being exaggerated, simply to paint an illusion to the public. After all, who stands to gain from the scarcity of any product? The people who control the prices.

In any free market, demand and supply find a natural meeting point. That is what the principle of laissez faire depends upon after all. High demand and low supply leads to inflated prices, and only those who can afford these prices are privileged enough to consume the scarce goods. A capitalistic system may have its advantages with respect to certain types of goods, but what happens when the market forces begin to dictate the allocation of goods that we depend upon for survival?

Vaccines are no ordinary commodity. They could quite literally be the difference between life and death. With this in mind, most other governments in the world have decided to shoulder the cost of their citizens’ vaccinations, and have put some sort of centralised pricing scheme in place. The Indian government however, has now left its people at the mercy of the profiteering antics of manufacturing companies and private hospitals. Whether the government stands to gain from this little arrangement or not – I’ll let you decide.

During the first phase of the COVID-19 vaccinations, our government had adopted a ‘single payer approach’, wherein the central government ordered all the vaccines, and then distributed them equally amongst the states and private entities. At this phase each vaccine was sold for INR 150. However, on April 21st the central government released a new policy allowing “liberalised pricing”. This policy was intended to create total transparency with regards to pricing, but instead handed SII and BB the power to establish varied prices for the states and the private hospitals respectively - for the same product. The price of a single dose of Covishield for private hospitals rose to the range of INR 600 – 900, and a dose of Covaxin rose to INR 1,250 -1,500. In turn of course, hospitals began increasing the prices further, with no well-defined price controls in place to stop them. As per a controversial Indian Express report, Indians will be paying more for a single dose of the vaccine than any other country in the world.

Essentially, the stage has been set for a vaccine market where manufacturers make a profit selling large portions of their supply to private hospitals, and these hospitals make their own killing by raising the prices further for their consumers. They have managed to find a product which is in frantic demand, and what better motive than a little panic and desperation to make people shell out extra money?

As supply falls and prices increase, certain questions arise. What happens to those who cannot afford to pay “whatever it costs”? What of those who will be left drowning in hospital bills, if infected? The ones who need the protection the most. Whose problem are they? Certainly not the manufacturers’, but unfortunately it appears that they aren’t the government’s problem either.

As we all know, it’s challenging enough to get vaccinated when you have the means and connections. Eliminate these two criteria, and who would stand a chance? It is true that the government has declared free vaccinations for all citizens above the age of forty-five, but how many lives will the increased waiting period cost us? While thousands of people anxiously fight over the few seemingly nonexistent slots on the CoWin app, the second wave of COVID-19 is doing more damage than anyone could have ever fathomed. Worse still, while the privileged lot sits and refreshes our app pages furiously, our fellow less fortunate citizens, with no access to technology, sit twiddling their thumbs helplessly.

The Supreme Court bench of Justices DY Chandrachud, L Nageswara Rao and Ravindra Bhat in the suo moto matter on COVID-19 management also raised questions on the issues faced by people in rural areas while registering for the vaccine.

"What about the digital divide? For rural areas, you have said villagers can register on CoWin app through NGOs. Our law clerks and secretaries have tried to register on CoWin app, so we know how it works." – Bar and Bench.

"To fight the pandemic we need to provide free universal vaccination which will ensure that all sections of the society are protected from the virus. The Union government cannot shirk its responsibility and leave everything to the states. It has to ensure vaccination in a time-bound manner," reads a resolution passed by the Kerala Assembly, as reported by the Hindustan Times.

All said and done we are still in unchartered territory and our vast population presents unsurmountable challenges which inevitably will cause delays. But to leave the vaccinations of our country’s citizens to be determined by the “vagaries of market forces” as former Union Minister P. Chidambaram put it, seems to be pushing a boundary.

Price intervention/capping is one of the resilient features of India’s pharmaceutical monitoring regime. Unfortunately, the National Pharmaceutical Pricing Authority (NPPA) and the the Department of Pharmaceuticals (DoP) have no power over this situation at the moment. The Drug (Prices Control) Order lists over 600 drugs as essential in its schedule and has capped the prices of these. This capping is done on the basis of a carefully devised formula, which is adjusted by the NPPA on a case-to-case basis. The COVID-19 vaccines however, are not on the DPCO list at the moment, as this list is not yet approved for fixed-dose combination drugs. Consequently, an amendment would be required to bring COVID-19 vaccines under the DPCO policy.

Taking all of this into account, the central government negotiating and fixing one price with the manufacturers seems like the most feasible and equitable option. To use the criticism of many opposition leaders, it should be “one nation, one price”. Without this regulation the government is allowing discriminatory prices to be put on peoples lives, and for a bulk of our population, this price is too steep.

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