Is the Centre considering procuring vaccines on behalf of the states? According to three people familiar with the matter, it is discussing the modalities of a centralised channel for vaccine procurement. The agency in charge of this channel will negotiate terms with vaccine manufacturers, and supply jabs on a pro rata basis to states, the people added, asking not to be named.
The chief ministers of some states, including Odisha’s Naveen Patnaik, Delhi’s Arvind Kejriwal and Kerala CM Pinarayi Vijayan have taken a public position that the Centre should procure vaccines centrally after global tenders raised by many states evoked no real response. Some large pharma companies, including Pfizer and Moderna have also told states that they prefer dealing with the federal government.
“States first demanded decentralisation of vaccination. Hence, they were allowed to float global tenders. Now, they find merit in a collective centralised mechanism, which is under consideration. However, a final decision on this issue will be taken by the competent authority,” one of the people cited above said.
“It also depends on consensus among states on this matter,” a second person said. The empowered group on vaccination, the Prime Minister’s Office, the Niti Aayog, and ministries of finance and health did not respond to email queries .
Under Phase 3 of its vaccine drive, the Centre opened up vaccines to all people over the age of 18 years and shifted the onus of acquiring such vaccines to states, albeit under a quota devised and monitored by it. It also allowed private hospitals to acquire and administer vaccines. With vaccines in short supply, the result has been chaotic, with not enough jabs to go around. The widely varying charges levied by private hospitals presented another problem. The Supreme Court on Wednesday termed the policy for 18-45 year olds “arbitrary and irrational”.
Till Wednesday, India vaccinated 45.3 million people completely and another 130 million have received one dose.
In a letter to chief ministers, Odisha CM Naveen Patnaik on Wednesday said global vaccine manufacturers were unwilling to get into supply contract with individual states. “The best option available is for the Government of India to centrally procure the vaccines and distribute it among the States so that our citizens are vaccinated at the earliest,” he said in the letter, a copy of which has been reviewed by HT.
He, however, reaffirmed states’ demand of a decentralised vaccination programme.
Similar sentiments have been expressed by chief ministers of Rajasthan, Jharkhand, Chhattisgarh and Punjab. On May 26, Kejriwal tweeted that the global tenders by states could not elicit any vaccine manufacturer. Hence, the Centre should give vaccines to state as per their needs.
While some states are willing to pay for their quota of vaccines procured under a centralised system, others, such as Kerala want the Centre to bear the entire burden. “While payment responsibility is another issue to be resolved as health is a state subject, it is certain that a collective negotiation will reduce to cost of vaccines by 25%,” a third person said.
On May 31, Vijayan wrote to 11 chief ministers “in the spirit of Cooperative Federalism” demanding the Centre to take the responsibility of procurement. On May 24, he wrote to Prime Minister Narendra Modi that competition among states to procure vaccines would push up their prices.
Audit and consulting firm EY India, in the latest edition of Economy Watch, said that if the Centre procures vaccines, the average price would be much lower than if individual states get involved. Conservatively, it estimates savings of over ₹43,000 crore or 40% of the total cost. “For vaccinating India’s total population aged 12 years and above at 108.5 crore (1.08 billion) , total required doses would be 217 crore (2.17 billion) considering two doses per person. At an average price of ₹300 per dose, the total vaccination cost would be ₹65,108 crore. If states’ involvement pushes up the average price to say ₹500 per dose, total vaccination bill would unnecessarily go up to ₹1.09 lakh crore,” it said.
DK Srivastava, chief policy advisor of EY India said: “This cost enhancement, which may be higher if the average vaccine price increases even more, is clearly avertible apart from avoiding the confusion ensuing from states’ involvement in vaccine procurement and implementation.
Union Budget 2021-22 allocated ₹35,000 crore for vaccination programme. “The budget will not be a constraint and the government will enhance the vaccination budget, if required,” the third person mentioned above said.