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Are vaccines the new age global currency in 2021

Researchers around the world have been working at an unprecedented rate to advance more than 100 vaccine candidates after the depth and scale of the COVID-19 pandemic was finally revealed. However, most of the infrastructure and funds necessary for the research, production and distribution of effective vaccine candidates have been collected haphazardly rather than through national and international emergency preparedness frameworks. Delays in detecting and responding to the COVID-19 threat, especially in India, have resulted in deaths and a devastated economy. It is difficult to understand why a well-designed and well-implemented vaccine procurement strategy is ignored, or why a public good has been turned into a commercial commodity. Obviously, the ideals of the government’s free market philosophy seem to be more important to them than saving lives and getting India out of the dire situation it is in now. Nothing else explains why a product so vital to the health security of the country has different prices. diets.

Indian vaccines: explained

Covishield vaccinations account for 90% of all vaccines given in India so far. The Serum Institute of India (SII), which manufactures the Covishield vaccine, has fixed costs for private hospitals at Rs 600 per dose and state governments at Rs 400 per dose. In private vaccination centers, the final cost of the vaccine may be more than Rs 600 per dose, as they will have to factor in their own costs of administering the vaccine. It now produces 60 million doses each month, but with financial support from the Indian government and GAVI (https://www.gavi.org) , they want to increase that to 100 million doses from July 2021. The capacity of Bharat Biotech, which makes the Covaxin vaccine, is now 10 million and will be increased. Bilateral deals appear to have been made with other companies with the help of Rs 1,500 crore from the Indian government to boost supplies to 700 million doses by July. As a result of these public statements, India is expected to receive the necessary doses by July, excluding the entry of additional vaccines like Sputnik and Pfizer, the supply and price of which remain unknown.

Vaccines: the currency of the new world

This begs the question of what Finance Minister Nirmala Sitharaman meant when she said in her budget speech on February 1: “I have provided 35,000 crore for the covid-19 vaccine in 2021-2022. “. If additional funds are needed, I will give them. In addition, the central government has allocated 3,000 crore to the Serum Institute and 1,567 crore to Bharat Biotech, for the supply of vaccines until July. After allowing for a reasonable margin, the cost of purchasing vaccines at Rs 150 per dose by the central government as the sole purchaser for government needs amounts to over Rs 19,500 crore. divided, the price advantage obtained by buying in bulk disappears. Under the current vaccination strategy, the central government would pay Rs 7,500 crore and states would spend Rs 34,400 crore, with an average vaccine cost of Rs 430 per dose – a total of Rs 42,000 crore. Given the state of the economy, which is dependent on loans, it is puzzling and confusing why the Center is unwilling to use its market power and continue to fragment markets, which would only bleed states further. and disproportionately favor vaccine manufacturing companies. The producer makes a huge profit at Rs 200 each dose, and it would be the most expensive vaccine purchased by governments through the Universal Vaccination Program. Even so, in the 2021-22 budget, this would imply an investment of Rs 26,000 crore against an allocation of Rs 35,000 crore for the purchase of vaccines.

Black markets are getting stronger

It is clearly a market dominated by suppliers. While the Serum Institute has set the private sector price for vaccinations at Rs. 600 per dose, the final price in a private vaccination center will be higher. In addition, due to limited availability, there is a risk that a black market will emerge for these vaccinations, as has been the case for oxygen cylinders and drugs used in the treatment of Covid. Take the example of hand sanitizers to try to better understand this problem. Hand sanitizers had disappeared from the market and were being sold in black when covid began to spread early last year. The reason was that demand greatly exceeded supply. Despite this, many companies entered the market after witnessing the high price of disinfectants, and the supply problem was quickly overcome and the prices became affordable. So the free market worked, and it worked brilliantly. However, in the case of vaccinations, new entrepreneurs cannot simply enter the market and start producing the vaccine, ensuring that the price of the vaccine does not skyrocket in the months to come. This does not mean that the private sector should be excluded from the immunization process. They should be for the simple reason that the population should be vaccinated as soon as possible. In view of this, a real rival, namely the government, is needed to ensure that the costs of vaccination in the private market do not skyrocket. This could have been accomplished by ensuring that the covid-19 vaccine is always available for free at government vaccination clinics. This would have ensured that private actors set fair prices for their vaccinations and do not make excessive profits. The likelihood of the latter occurring has increased dramatically. In 2019-2020, India’s gross domestic product (GDP) was $ 203.5 trillion. That figure is expected to drop to $ 195.9 trillion next year, a reduction of $ 7.6 trillion. This estimate was made before the onset of the second wave of covid. As a result, GDP for 2020-2021 could be less than $ 7.6 trillion, implying a larger drop. The cost of the spread of covid and the failure of society as a whole to develop collective immunity, forcing governments to enforce closures and curfews, has led to a decline in economic activity. As a result, it makes sense for the government to provide free immunizations, at least in government-run immunization clinics. Since India’s economy declined in 2020-21, it is unlikely to contract in 2021-22. However, if India’s growth rate falls below the current forecast of 10-12%, we would expect a few trillions more in economic damage. In this situation, if the central government spends the 35,000 crore it has set aside on vaccinations (or even more if necessary), the whole economy will benefit greatly.

And after?

To be fair, most countries have struggled to roll out vaccines, even rich countries that have tried to trap far more than their needed percentages of global supplies. Overall, the distribution of vaccines in the United States matches that of the rest of the world: uneven, unfair and inept. This strategy will extend the existing epidemic and raise doubts about humanity’s ability to work together to address the much larger problems that lie ahead. The virus, on the other hand, has no limits and is not afraid. Even if public policy leaves sections of vulnerable demographic groups to destroy, it will rebound. It is a policy that should be revised as soon as possible.


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Ruben V. Albin

The author Ruben V. Albin