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Pratyasha Rath

News Highlights

  • There is a supply shortage globally and not just in India. 

  • India should have put up a singular front to procure vaccines instead of letting the states compete against each other without any clout in front of the suppliers.

  • Odisha had been the first state to ask for private procurement.

On Monday, India saw a televised address by Prime Minister Modi which was followed by a change in the vaccination policy which we were seeing in the past couple of months. Normally, a policy measure with procurement and distribution at the centre of it, would not have made for interesting television nor would have been considered important enough for the general public. But the politicization of the vaccine development and procurement policy along with the number of barbs exchanged between political parties on the topic, have made it a pivotal concern which is difficult to escape. This address by the Prime Minister which had a large and unmissable dose of politics to it, was the latest episode in the heated and contested vaccine policy formulation that the country has seen.

With the onset of the second wave in some states in mid-April, a concerted campaign started taking place which was led by some states and the Opposition parties in power there. Aided by sections of the media, the demand was to allow states to procure vaccines because their assessment was that the centralized policy was delaying the rate of vaccination and leaving out major sections of the population. After days of heated political discussions and mudslinging, the government gave in to the demands of the state and decided to procure only 50 per cent of the vaccines for the above 45 population in states. States were allowed to procure 25 per cent for the 18-44 population and the rest 25 per cent was opened for private hospitals.

The Prime Minister in his address on Monday spoke at length and with copious amounts of detail on the insistence of the states which led the Union to move from the initial centralized policy to one where states were part of the procurement process. Irrespective of how the decision came to be, the policy was doomed to fail and the prudence of the Union government in even agreeing to such an ill-conceived idea of some opposition actors, becomes suspect. The noise from opposition parties and a section of the media on a decentralized procurement policy created a situation where the decision was pegged to be a statement on the strength of federal cooperation in the country. But, in reality it turned out to be arbitrary and confused policy which by design was meant to fail but served to be a good vessel to settle political scores across the board. 

The states who had demanded that they should be put in charge of procurement had assumed that because the second wave was on us and the demand for vaccines had suddenly increased due to fear, it would lead to a quick increase in manufacturing. Take the example of masks last year. There was a time when masks were in short supply but as soon as the demand increased, multiple manufacturers could come in, ramp up supply and lower the price. But this was not possible for vaccines as they are a specialized commodity and ramping up the infrastructure to increase production cannot happen that fast. Therefore, the production and procurement continued to suffer even with the demand increasing through a new cohort.

When operating in a supply crunch situation with a limited number of sellers, more competition puts the buyer at a disadvantage. With states and the private sector, competing with each other for the limited supplies both nationally and globally for procuring doses for the 18-44 age group, the manufacturers gained upper ground as they held the key to where the supply could be directed. This also put richer states at a unique advantage where they could outbuy smaller states. This led to a situation where the Supreme Court had to interfere and ask the central government to set quotas for the states on the basis of their population to ensure equitable access. 

There is a supply shortage globally and not just in India, due to the extreme dependence on a very limited number of suppliers. In such a situation, India should have put up a singular front to procure vaccines instead of letting our own states compete against each other without any clout in front of the suppliers. As state after state floated global tenders to procure vaccines and never heard back from manufacturers, the utter failure of the experiment could not be hidden for much longer. The noise around the policy of decentralization, picked up steam in the past few weeks with multiple actors including the Supreme Court and multiple opposition leaders speaking strongly against the arbitrary nature of the policy.

After more than a month of the failed experimentation with decentralized vaccine procurement, a snub from the Supreme Court and letters from 10 Chief Ministers, the Central Government on Monday reversed the policy and went back to the centralized procurement route. This will mean that the Union government will now procure 75 per cent of the total vaccines produced and will make them available to everyone above the age of 18 at public health care centres.

The 25 per cent procurement by private hospitals is to continue even under the new policy though there are still some reservations around it. Odisha had been the first state to ask for private procurement and the idea behind this demand was to allow those who were willing to pay for the vaccines to access the services in private hospitals. While continuing with the procurement allows the manufacturers some room to recover their costs, there is a concern that the supplies would be skewed towards private hospitals at the cost of the government. But the relative success of the experiment is a good indication that the process should not be disturbed. The massive uptick in cases of mass vaccination being conducted by large corporations for their employees will only increase in the coming months, leaving the state government to direct its attention towards more critical, difficult to access pockets. Also, with the manufacturing being amped up and the supply situation being resolved, the fear of manufacturers skewing towards private hospitals is not likely to play out.

A month is a long time in politics and this disastrous experimentation in decentralized vaccine procurement has seen a lot of murkiness and mudslinging. But more than that, a month is a long time when fighting a pandemic and the time and energy lost in this experimentation is a reflection on political prudence trumping over public good. Hopefully, the way ahead is smoother with the supply chinks being ironed out.

(DISCLAIMER: This is an opinion piece. The views expressed are the author’s own and have nothing to do with OTV’s charter or views. OTV does not assume any responsibility or liability for the same.)

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