Puzzling costs of COVID-19 vaccines in India

Written by Dr Saru Gupta and Dr Leenus Tafline

covid vaccine

A ferocious second wave of the Covid-19 pandemic has wreaked havoc on cities and towns of India, bringing the country’s crippled healthcare system to its knees. The unexpected surge in cases has underscored the importance of vaccinations, but amidst vaccine skepticism and inadequacy, people are perplexed about the costs.  Moreover, the price increase drew widespread condemnation, implying that the healthcare system, as well as the political system, were adamant in profiteering.

Since the vaccine was initially funded in advance, the price was significantly lower when it was first rolled out. Subsequently, there has been no mention of receiving funds. This could be one of the reasons why the price has risen significantly since the initial cost.  It is debatable whether rising vaccine prices can reimburse for a lack of funding, and the Universal Immunization Programme (UIP) appears to be missing. Looking back at UIP‘s history of success in reducing infant and child mortality and morbidity, the Centre is to be evaluated for squandering people’s advantages.

In the Union Budget for Fiscal Year 22 (FY22), FM allocated Rs 35,000 crores for a vaccination drive. That equates to vaccinate 83 million people or roughly 60 percent of the Indian population. With an initial cost of Rs 150/- per vaccine, we could have spent Rs 25,000 Crs on both double doses of the vaccine – less expensive, more cost-effective, no confusion, and the pinnacle of success. Vaccination costs have now skyrocketed as the Union government has shifted responsibility to the states, which is not advisable according to the UIP. In consonance with the UIP, the centre should obtain vaccines and distribute them for free to states. However, in this time of crisis, citizens of India are not witnessing the same. States are compelled to purchase from private players at a higher price.

Why did the centre make a sudden decision to disregard the UIP, causing states to suffer and live in total chaos? The missing of a “why” in the centre’s decision raises suspicion on the high cost of vaccines.

“In one of the television interviews, Poonawalla had said that the highly subsidised rate of ₹150 ($2.02) with GST he was giving to the Centre for a “limited time” was only because of a request from the “Modi government.

To put it briefly,  prior to introducing the vaccines to people aged 18 to 45, it was sold for 250/- in privates for people over 45, and free of charge in state government hospitals. Furthermore, the centre’s role in abruptly advising people aged 18 to 45 to get vaccinated sparked scaling-up confusion among the SII and BB, which may have resulted in the puzzlement of determining vaccine costs. Even though with a lot of confusion we have no information on why these differences exist. For instance, as of May 10, 2021, 08:33 IST, Apollo hospitals has set the price for Covishield at Rs. 850 and Covaxin at Rs. 1250. The prices of private hospitals in each state vary for each shot that a person must pay from out of pocket.  However, at the same time, state government hospitals are providing vaccines free of charge. We assume the reason for this is due to the geographical location of the private hospitals and the cold chain transport to them, as well as the fact that Covaxin is indigenous while Covishield is not.

We can conclude from this that the manufacturing companies have raised the price of vaccines because they are afraid of losing the scale-up due to vaccine shortages. In addition, given India’s large population and demand, only two manufacturing companies are currently producing and supplying vaccines to states and privates in India. Undoubtedly, this information creates a huge shambles while also providing us with a clear indication of our healthcare system’s hobbled functioning in this unprecedented time.

Besides that, they are still not considering the needs of the nation, but rather profiteering and creating confusion in the country regarding the vaccine pricing system, which calls vaccine policy into question.

In one of his interviews with NDTV, Poonawala had said: “We’re supplying in India at approximately ₹ 150-160. The average price is around $20 ( ₹1,500)… (but) because of the Modi government’s request, we are providing subsidised rates… It is not that we’re not making profits… but we are not making super-profits, which is key to re-investing,”, whereas, in another interview with CNBC-TV18, in which he defended why Covishield’s price in India is now higher than in other countries by stating that their prices were negotiated “a long time ago” for limited quantities when there was uncertainty about its success. In SII’s defense, he had said that 50 per cent of his revenue has to be given to AstraZeneca as royalty and that is also why the price at ₹150 to the Centre was just not making sense.

Unclarifiable questions…???

People are having a hunch that, ‘how can the same vaccine manufactured by the same company be sold at three distinct prices…?’ There is no rationale or justification for such ambiguous differentiation. Even with the Central Government’s 50% vaccination quota, the allocation must be transparent and equitable in accordance with the spirit of international cooperation.

According to one of the BMJ articles, the EU pays $2.15 (£1.56) per dose of the UK-developed vaccine, while the US pays slightly more at $4 (£2.90) per jab. While the same vaccine is being sold in India for nearly $12, this raises serious concerns.

Dr. Saru Gupta has a bachelor’s degree in dental surgery (BDS) and is currently pursuing a master’s degree in public health (MPH) specializing in health policy at Manipal Academy of Higher Education (MAHE).

Dr Leenus Tafline A E has a bachelor’s degree in dental surgery (BDS) and is currently pursuing a master’s degree in public health (MPH) specializing in health policy at Manipal Academy of Higher Education (MAHE).



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