Are Vaccines The New Age Global Currency in 2021

Researchers throughout the world have worked at an unprecedented rate to advance more over 100 vaccine candidates after the depth and breadth of the COVID-19 pandemic was finally revealed. However, most of the infrastructure and money required to research, produce, and distribute effective vaccine candidates has been put together haphazardly rather than through established national and international emergency preparation frameworks. Delays in detecting and responding to COVID-19’s threat, notably in India, have resulted in deaths and a devastated economy. It is hard to comprehend why a well-designed and flawlessly implemented vaccine procurement strategy is being ignored, or why a public good has been turned into a commercial commodity. Clearly, the government’s ideals of free market philosophy appear to be more important to them than saving lives and bringing India out of the terrible situation it is now in. Nothing else explains why a commodity that is so vital to the country’s health security has various price schemes.

The 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. At private vaccination centres, the ultimate 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 Government of India and GAVI (https://www.gavi.org) , they want to increase that to 100 million doses starting in July 2021. The capacity of Bharat Biotech, which makes the Covaxin vaccine, is now 10 million and will be increased. Bilateral agreements appear to have been established with other firms with the help of Rs 1,500 crore from the Indian government to ramp up supply of 700 million doses by July. As a result of such public declarations, India is expected to get its needed doses by July, excluding the entrance of additional vaccines like Sputnik and Pfizer, whose supply and pricing remain unknown.

Vaccines: The New World Currency

This raises the issue of what finance minister Nirmala Sitharaman meant when she said in her budget address on February 1st, “I have provided 35,000 crores for the covid-19 vaccine in 2021-22.” If further funds are necessary, I pledge to give them.” Additionally, the central government has allocated 3,000 crore to the Serum Institute and 1,567 crore to Bharat Biotech, for vaccine supply until July. After allowing for a reasonable margin, the cost of buying vaccines at Rs 150 per dose by the Central government as a single procurer for government requirement amounts to over Rs 19,500 crore. When the market is divided, the price advantage gained by purchasing in bulk is gone. According to the present vaccination strategy, the Central government would pay Rs 7,500 crore and the states will spend Rs 34,400 crore, with an average vaccine cost of Rs 430 per dose – a total of Rs 42,000 crore. Given the condition of the economy, which is reliant on loans, it is confusing and perplexing why the Centre would not wish to use its market power and continue to fragment markets, which would only further bleed states and disproportionately favour vaccine manufacturing firms. The producer earns a huge profit at Rs 200 each dosage, and it would be the most costly vaccine bought by governments via the Universal Immunization Programme. Even so, in the budget 2021-22, it would imply an investment of Rs 26,000 crore against an allocation of Rs 35,000 crore for vaccine purchase.

Black Markets Prop Up

Clearly, this is a market dominated by suppliers. While Serum Institute has set the private sector price for vaccinations at Rs.600 per dose, the ultimate price at a private vaccination centre will be higher. Furthermore, because of restricted availability, there is a risk that a black market will emerge for these vaccinations, as it did for oxygen cylinders and medications used in the treatment of Covid. Let’s use the example of hand sanitizers to attempt to grasp this issue a bit better. Hand sanitizers had vanished from the market and were being sold in black when covid initially started spreading early last year. The reason for this was that demand vastly outstripped supply. Despite this, many businesses entered the market after witnessing the high price of sanitizers, and the supply problem was quickly overcome, and prices became affordable. So, the free market functioned, and it functioned brilliantly. However, in the case of vaccinations, new entrepreneurs cannot just enter the market and begin producing the vaccine, ensuring that the vaccine’s price does not skyrocket in the coming months. This is not to say that the private sector should be excluded from the vaccination process. They should be for the simple reason that the populace has to be vaccinated as soon as feasible. Given this, a genuine rival, namely the government, is required to ensure that vaccination costs in the private market do not skyrocket. This might have been accomplished by guaranteeing that the covid-19 vaccine is still available for free at government vaccination clinics. This would have guaranteed that private players set fair prices for their vaccinations and did not make excessive profits. The likelihood of the latter occurring has increased significantly. In 2019-20, India’s gross domestic product (GDP) was 203.5 trillion dollars. This is anticipated to drop to 195.9 trillion in the next year, a reduction of $7.6 trillion. This estimate was produced before the initiation of the second wave of covid. As a result, GDP for 2020-21 might be lower than $7.6 trillion, implying a larger decline. The cost of the spread of covid and the fact that society as a whole hasn’t developed herd immunity, requiring governments to enforce lockdowns and curfews, was a drop in economic activity. As a result, it makes sense for the government to provide free vaccinations, at least at government-run vaccination clinics. Given that the Indian economy declined in 2020-21, it is unlikely to shrink in 2021-22. However, if India’s growth rate falls below the current forecast of 10-12 percent, we’re looking at another few trillion rupees of 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 gain greatly.

What’s Next?

To be honest, most countries have struggled with vaccine deployment, even affluent nations who have attempted to snare far more than their needed percentages of world supplies. Overall, vaccine distribution in the United States has matched that of the rest of the world: uneven, unfair, and inept. This strategy will prolong the existing epidemic and raises doubts about humanity’s ability to work together to face the far larger issues that lie ahead. The virus, on the other hand, has no bounds and is unafraid. Even as public policy leaves swaths of vulnerable demographic groups for it to destroy, it will rebound back. It’s a policy that needs to be revised as soon as possible.

Are Vaccines The New Age Global Currency in 2021

BySayon Bhattacharya

The Indian Vaccines: Explained

Vaccines: The New World Currency

Black Markets Prop Up

What’s Next?

By Sayon Bhattacharya

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