A FLAWED PROCESS
THE NATIONAL VACCINATION DRIVE FACES SUPPLY, DISTRIBUTION AND PRICING HURDLES
The mass vaccination drive faces distribution and pricing hurdles
BBeginning May 1, the Great Indian Vaccine Rollout will now cover millions of people in the 18-44 age bracket across the country in the inoculation drive against Covid-19. Except that the numbers are humongous and will be a lot more challenging than holding a general election or even taking a citizens’ headcount in the decadal Census. When it was launched on January 16, the phased rollout of the programme was in sync with the availability of Covid vaccines in the country. The first priority was the healthcare and frontline workers dealing with the pandemic. Then it was the turn of those above 60 years where mortality rates were the highest for the virus. So far, so good. The nation could easily meet the demand as vaccine hesitancy saw only half the numbers of the eligible group enrol. The ready availability of vaccine stocks also meant that India could export 65 million doses to needy nations.
Things began to go awry in late March when the government lowered the age for vaccine eligibility to 45 years and above from April 1 and demand began outstripping supply. Central government officials defended themselves by pointing out that India had vaccinated over 143 million people, and while it was not the largest number (the US and China have inoculated more), it was still the fastest in terms of the number of days taken. What those figures masked was the uncomfortable fact that they covered barely 1.5 per cent of the population. Of those reckoned as most vulnerable (above 60), only 50 per cent of an estimated 120 million have been vaccinated so far, including 9.3 million who had also received the second dose by April 27. Some 60 million senior citizens remain to be covered even as, from April 1, another 200 million of those 45 years and above joined the queue for the vaccine.
What sent matters into a tailspin was the second Covid wave which hit the country at around the same time. The ferocity of the virus attack unnerved both the central and state governments, upsetting their leisurely paced vaccination programme. As a medi
cal emergency engulfed the country, the Narendra Modi government came in for stringent criticism from the Opposition, not only for claiming a premature victory over the pandemic but also for not ramping up its vaccination programme fast enough and playing to the international gallery by exporting vaccines that could have been used to protect its own citizens.
Faced with mounting criticism over the handling of the second wave,
Prime Minister Modi, as he tends to do in the face of adversity, decided to radically alter India’s vaccination programme. He announced that from
May 1, those above 18, too, would be eligible for the vaccine. The numbers to be vaccinated shot up to 900 million almost overnight. Given that each person needs two doses of the vaccine for full immunity, this means the country needs 1.8 billion doses. With the current monthly production of the two Indian vaccine manufacturers pegged at 110 million doses a month, it would take a year and a half to fully vaccinate every citizen above 18 years. Clearly, an unsatisfactory situation was at hand, given the resilience of the pandemic and the successive waves of infections it could cause. So, Modi made some more dramatic announcements to boost production and delivery of the vaccines. But even these raised more questions than answers.
OVERCOMING THE SHORTAGE
To boost vaccine production, the Modi government decided it would not only help the two domestic manufacturers, but also open the sector to imports from foreign manufacturers, including clearing a third vaccine, the Russian-made Sputnik V, for import and distribution. For the two Indian vaccine manufacturers, Serum Institute of India (SII) and Bharat Biotech, who make Covishield and Covaxin respectively, the government sanctioned grants totalling a little over Rs 4,500 crore, to expand capacities. SII is to raise its share from 70 million to 100 million doses by July while Bharat Biotech needs to take it from 30 million to 58 million doses by August. The repayment of these grants is linked with the two companies selling a fixed amount of doses at a low cost to the Centre.
But even beefing up production from 110 million doses to 158 million a month in four months is still far from adequate considering the demand. To cope with the vaccine crunch, state-owned facilities such as Indian Immunologicals Ltd, Bharat Immunologicals Ltd and the Haffkine Institute will supply another 50 million doses of Covaxin a month from August. Meanwhile, Dr Reddy’s Laboratories, which has exclusive marketing and distribution rights for the first 250 million doses of Russia’s Sputnik V vaccines in India, is to import finished vaccines from wherever production is going on, once the price is fixed. The availability, therefore, is likely to be upwards of 225 million doses a month from August. The current calculations are that everyone eligible might be able to get the first dose by mid-October and the second dose by January-end if there are no hiccups in production and distribution. But these are still just estimates and there could be delays. “While the current Covid vaccines are helpful, they are not capable of preventing those vaccinated from being infected (to a lesser degree) nor do they block further transmission. Therefore, it is crucial to get the vast majority vaccinated as quickly as possible,” cautions Dr Jayaprakash Muliyil, renowned epidemiologist and chairperson of the scientific advisory committee of the National Institute of Epidemiology.
The hopes are now pinned on some new domestic vaccines in the pipeline and the options in the global market that could be imported to overcome the vaccine crunch (see Emerging Options). The Zycov-D DNA vaccine from Ahmedabadbased Zydus Cadila began phase III trials in January and is likely to be launched by June. A fully indigenous plasmid DNA vaccine, Zycov-D will be produced in small quantities in mid-May. Zydus Cadila plans to produce up to 240 million doses a year,
which will include 120 million doses of inhouse production and the rest made by a couple of contract manufacturing companies. Hyderabad-based biotech manufacturer Biological E’s Covid-19 vaccine, BECOV2, is also in the final phase of trials and is likely to hit the market in less than four months. The company is ramping up capacities to produce about one billion doses a year of this vaccine, according to managing director Mahima Datla. DISTRIBUTION CHALLENGES
Under the Liberalised Pricing and Accelerated National Covid-19 Vaccination Strategy, starting May 1, domestic vaccine-makers will be free to sell 50 per cent of their production to the states and private facilities. The other half will go to the Centre, which has stated it would fulfil its commitment of vaccinating all those above 45 free of cost. States are now free to decide how they would like to implement the programme for other age groups as well. Countering charges that the Modi government had abdicated its responsibility by announcing the modified vaccination programme, Dr V.K. Paul, NITI Aayog member and co-chair of the National Expert Group on Vaccine Administration (NEGVAC), said, “For the Centre, the vaccination programme will remain a core responsibility. We will continue to be a major player, improving the efficiencies of the systems we have built and making it available to the states who can align with and add to it, while also giving them flexibility to take decisions.”
However, a comprehensive roadmap for the vaccine rollout, factoring in manufacturing sites, distribution points and last-mile health utilities, and ensuring that there is minimal wastage and the vaccine is stored at the right temperatures in cold chains, is still in the works. In the absence of such a blueprint, vaccine-makers are apprehensive the blame for the impending acute vaccine shortage will be placed at their door.
The Centre has allowed decentralisation of distribution, enabling states to buy and vaccinate their people while individuals can pay to get vaccinated
at private health utilities. “The scale is unprecedented. To be successful, we have to operate in war mode, get all stakeholders to work together,” emphasises G.V. Prasad, co-chairman and managing director, Dr Reddy’s Laboratories. “Greater availability of vaccines throughout the country, a greater number of vaccination points and trained people to administer the vaccines, all this will be very important in this mission to inoculate the entire adult population of the country.”
Public health experts argue that planning and controlling the flow to the vaccination centres will pose a greater challenge than the vaccinating costs (which will largely be shared by the Centre and the states). Entities vaccinating at private health utilities for a higher price can buy about 10 per cent of the doses. The tweaked vaccination strategy shifts the burden of vaccinating the young population (18-44 years) to the states. However, there is as yet no inkling as to what proportion of the vaccines will be made available to individual states and when. Time schedules will be crucial to ensure efficient supply and distribution. The scramble has begun. A few states like Uttar Pradesh, Bihar, Chhattisgarh, West Bengal, Kerala, Tamil Nadu, Andhra Pradesh, Telangana and Goa have announced free vaccination for all in the 18-44 group at state-run facilities.
PRICING PROBLEMS
A vexatious issue is sharing costs. The cost of vaccinating the adult population is estimated at Rs 60,000 crore. Whether the Centre will bear the entire cost, as it had intended earlier, is unclear. Union finance minister Nirmala Sitharaman has set aside Rs 35,000 crore towards vaccination in the 2021-22 budget with an assurance that it can be increased. The states, while announcing that vaccinations will be free for large sections of residents, are expecting to be reimbursed by the Union government. Several chief ministers are eager that the Centre pays for the vaccines, given their own limited resources for health allocations.
Analysts say the opening up of vaccine purchases to the states coupled with differential pricing appears to be a political ploy by the Centre to shift the blame for the inevitable lapses in implementation. Former health administrators say a coordinated inter-state mechanism, on the lines of the GST Council, to track and ensure apportioning of vaccines among states depending on the severity of the pandemic is needed. It also has to take into account factors such as the states being short on money. While the states fund procurement from their own budgets, bridge funding from the Centre is essential. In its absence, the states with clout or ability to pressure vaccine-makers will divert allocations to create anarchic conditions as has happened in recent days with the supply of medical oxygen. Several states are also staring at a staff crunch ahead of the massive vaccination drive. Plans to rope in medical graduates, nursing students, staff from government/ private hospitals and paramedics are being considered.
Further compounding the issue, while announcing that it will lift half the supply of vaccines at Rs 150 per dose, the Centre has allowed SII to sell at Rs 300 a dose to the states and Rs 600 in the open market; Bharat Biotech’s rates are Rs 600 and Rs 1,200 respectively. People opting to take their shots at private health utilities will pay more to cover the service costs. Until now, government facilities had provided vaccines free of cost while private ones were allowed to charge no more than Rs 250 per dose. Critics of the current policy point out that many countries do not use the private market for vaccines and provide them free of cost to all in the context of combating a pandemic and as part of the national programme for immunisation. India, Pakistan, Nepal and Thailand are among the few that have allowed vaccine-makers to sell in the private market.
For vaccine-makers, differential pricing is justified considering they invest large amounts of money in R&D. There is also logic in incentivising manufacturers to invest more capital in what is seen as a long and arduous battle
THE VACCINATION PROGRAMME IS A CORE RESPONSIBILITY FOR THE CENTRE. WE’LL KEEP IMPROVING EFFICIENCIES OF OUR SYSTEMS” DR V.K. PAUL NITI Aayog Member, Cochair of NEGVAC
against Covid-19. Moreover, the cost of production is roughly estimated to be Rs 300 per vial and companies are looking at a mark-up ranging between 25 and 30 per cent over and above the cost. But with a pandemic hanging over our heads, vaccine-makers may be perceived as making a killing. Altering that perception is a daunting prospect given the all-round Covid distress but only a fair pricing mechanism can further the larger goal of vaccinating everyone within a year. Public interest groups have asked questions as to why the tax-paying public should bear the high prices of vaccines when their money is being used to beef up vaccine producers.
On their part, SII and Bharat Biotech say their prices are the lowest in the world. Adar Poonawalla, CEO of SII, points out that government procurement for countrywide immunisation programmes in all countries including India is at a far lower price as the volumes are very large. “Covishield is currently the most affordable vaccine in the global vaccine market,” he says, adding that prices are based on advance funding given by the countries for at-risk vaccine manufacturing. Bharat Biotech managing director Krishna Ella says Covaxin is inactivated and highly purified making the manufacturing process expensive due to very low process yields. “All costs towards product development, manufacturing facilities and clinical trials came primarily from internal
funding and company resources,” he says. Industry sources say the candidate vaccines to arrive in the coming months will cost more than Rs 700 and that the frontrunners, SII and Bharat Biotech, may not have done the right thing by offering it initially at Rs 150.
Given the public health emergency, several countries, including the United States, UK, Japan, France and China, are providing vaccines free to all citizens. No country has opted for open market sale of Covid-19 vaccines as yet, because they are still under restricted or emergency use permissions and have not yet been fully licensed in their countries of origin. The slogan of free vaccination for all is gaining currency even though it would be equitable only if those who can afford to pay for their doses opt to do so. The fact is that vaccine prices are not homogeneous but vary depending on assured volumes, upfront payment, duration of the contract, bundling with other products, discounts and rebates. The US, UK and the EU made huge upfront payments and purchase commitments to international vaccine-makers and got lower prices as a result. India failed to do so initially and is paying the price. Meanwhile, availability of vaccines is going to be a major bottleneck. On April 28, when the CoWin platform was opened for the 18-44 age bracket, over 12 million registered but most were not able to get date and time slots for their jabs. Experts argue that a national vaccination strategy to step up coverage swiftly is now essential to prevent the programme from descending into chaos.