Waiting for a people-centric Covid vaccine policy

The cost of vaccines in the private sector, which in the end would have to be borne by the citizens, is now 5 to 9 times higher than what the government would be paying for the vaccine.

Published: 01st July 2021 12:05 AM  |   Last Updated: 01st July 2021 12:05 AM   |  A+A-

Vials containing Russia's Sputnik V vaccine for COVID-19. (Photo | AP)

The government of India, on June 7, announced a few modifications in the Covid-19 vaccination strategy, which has been implemented from June 21. Now, the Union government would procure and pay for 75% of the total vaccine produced in the country and distribute it to the states. The government has also capped the service fee in the private sector at Rs150 per vaccination (this will be over and above the cost of the vaccine). A provision of e-voucher, where willing and affording citizens can pay for the cost of vaccination of others and the holder can go and get vaccinated, has been made in the private sector.

The biggest significance of the announcement is that, though defiantly, reluctantly and after many weeks lost, the government has acknowledged the flaws in its earlier strategy, which resulted in states struggling to procure vaccines and caused the short supply and resulting chaos at inoculation centres across India. The vaccination rate had come down to an average of two million doses a day in May from a high of four million in early April. The revision has also addressed the issue of inefficiency, as when the states were directly purchasing vaccines, the expenditure would have been three-four folds higher (though the burden was on the states). The cost of vaccination to the government now would be far lower than in the earlier policy.

However, if we examine this revision from the people’s perspective, not much has changed. Moreover, it is a ‘missed opportunity’. To start with, even before the announcement on June 7, the Covid-19 vaccine at the government facility was free for the people; it is just the logistic arrangement that has been altered between the Union and state governments. There are other aspects that are potentially questionable.

First is the government’s service charge price cap. Even Rs 150 is a 50% increase over the service charge allowed in the first phase of Covid-19 vaccination. Therefore, it clearly raises questions about the lack of transparency in the process through which the government determines prices in healthcare services.  

Second, the cost of vaccines in the private sector, which in the end would have to be borne by the citizens, is now 5 to 9 times higher than what the government would be paying for the vaccine. This raises two important issues. One, it is the role of the government to protect citizens from any excess financial burden on health services, yet it seems to legitimize the cost of a commodity by allowing a 4-8 times price difference. Two, it may set a wrong precedent and raise the risk of this being used by the manufacturers to put differential and excessively high prices on their products for the private sector in comparison to the public sector.

Third, the price difference in the government and private sector essentially means the total cost of vaccinating one-fourth of the adult population would be at least 1.5 to 1.7 times higher than the cost of vaccination of three-fourth population in India. (Assuming 40% share of Covishield; 30% each of Covaxin and other vaccines, the average vaccine price at the current rate over this period would be more than 6-7 times higher than the government procurement rate.) Essentially, citizens would end up paying far more money than the government would spend on the jabs. It completely counters the claim that vaccines are free in India.

Fourth, e-vouchers give a false sense of strategy and trivialise the challenge, which should be addressed by a more targeted and assured approach rather than leaving it to a possibility. These vouchers, in the end, would be available for a very small fraction of the total citizens vaccinated.   

What has been done is a good start, however, there are more glaring challenges that require immediate corrective measures.

One, in the pandemic period, the Centre should consider procuring and paying for 100% of the vaccines, going back to the strategy of the earlier phases of inoculation, and share it with the private sector as well. Even the service charge at private sector facilities should be paid by the government on behalf of people. However, to make it viable for vaccine manufacturers, a new price may be renegotiated, which could be different from `150 per shot, if need be.

Second, the excess vaccine price needs to be delegitimised and the cost of the jabs in the private sector should not be more than twofold the price in the public sector.

Third, as an urgent and immediate measure to ensure vaccine supply, the government needs to revisit the 75-25 formula to share vaccines with the private sector. There are regular media reports that while private sector vaccination facilities have uninterrupted vaccine supply and many vacant slots, the government facilities are scrambling for vaccines. A part of the reason is that, of the total Covid vaccination centres in India, only 3-4% are in the private sectors. Therefore, when the private sector has been allocated a quarter of the total vaccine supply, it puts government facilities at disadvantage. To revise the vaccine sharing, one approach could be to allocate vaccines proportionate to the facility in the private sector, plus some more. In any case, it should not be more than 10% of the total supply. An alternative and perhaps better approach would be to allocate vaccine doses based on the assessment of actual vaccination capacity of the private sector. This is specifically important as with the increasing vaccine supply, the current allocation formula will give disproportionately high numbers to the private sector, which may remain unused.

The modifications in India’s Covid vaccination plan are more government-centric and address logistic issues; however, they don’t have any tangible benefit for the citizens. There is an urgent need for additional revision to make the strategy people-centric.

Dr Chandrakant Lahariya
Epidemiologist & public health specialist



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