'Centre, not states should pay for COVID vaccine': Arvind Subramanian recommends free jabs to avoid politicisation

Former chief economic adviser Arvind Subramanian said that India’s vaccination strategy is “complicated and politicised”, and asserted that it is the Central Government, and not states, that should bear the “fiscal costs of vaccines”. Subramanian listed three reasons to support his argument: First, he stated that the “virus doesn’t respect state borders”. Secondly, he added, the Centre has better access to resources than states. And thirdly, the former CEA added, “Fiscal ‘costs’ are trivial compared to lives saved and economic activity preserved.” In a series of tweets, Subramanian also said that free vaccination is the only way to avoid politicisation of the COVID-19 vaccine and that the government should pay manufacturers a reasonable price for the vaccine. Subramanian’s remarks have come amid a row over the pricing of the Covishield vaccine. The Centre had on Saturday said that it would pay only Rs 150 per dose of Covishield to Pune-based Serum Institute of India (SII) after the company told a newspaper that both states and Centre would be charged Rs 400 a dose for new contracts of the Covishield vaccine, an Indian version of the Oxford-AstaZeneca COVID-19 vaccine. Without making any direct reference to the row, Subramanian said the Centre should pay manufacturers a reasonable price for the vaccine. “This is not the time for haggling and creating uncertainty for the private sector, domestic or foreign,” the former CEA said on the vaccine pricing.

India's vaccine pricing being complicated/politicized.

Three simple principles to follow.

1. Govt. should pay manufacturers reasonable price. This is not the time for haggling and creating uncertainty for private sector, domestic or foreign 1/

— Arvind Subramanian (@arvindsubraman) April 24, 2021

There has been a lot of confusion over the price of vaccines in India after the government allowed both states as well as private hospitals to procure the vaccine directly from manufacturers for the next phase of vaccination, when everyone above the age of 18 will be eligible for a shot from 1 May. According to reports, while the Centre procured the vaccine at Rs 150 per dose, for the next phase of inoculation, states will be charged Rs 400 for a dose of the Covishield vaccine, private players have to shell out Rs 600 a dose for the same vaccine. This, experts have warned, will make the vaccine out of reach for several individuals, especially the economically weaker section of the population. As per a report in report in The Indian Express, at a cost of Rs 600 per dose, Indians will end up paying the highest price in the world for the vaccine developed by Oxford and AstraZeneca and manufactured in India by the SII as Covishield. The SII, however, later clarified, according to another Indian Express article, that the cost of Rs 600 a dose for Covishield is for a limited stock of the vaccine and shouldn’t be compared with international prices. Subramanian said that this differential pricing is not just unethical but would also difficult to implement. “There should be only one price for vaccine jabs all over India. That price should be zero. So, vaccines should be free for all. Differentiation and complexity are unethical, unnecessary, and difficult to implement. Free vaccines for all will avoid vaccine politicisation,” he said.

3. The Center-NOT states-should bear full fiscal "costs" of vaccines.

Why?

--Virus does not respect state borders.
--Center has better access to resources than states
--Fiscal "costs" are trivial compared to lives saved and economic activity preserved n/

— Arvind Subramanian (@arvindsubraman) April 24, 2021

Besides, the pricing issues, India’s nationwide vaccination programme is already facing troubles due to the short supply of vaccines, mismanagement of crowds at centres, cancellation of vaccine appointments made on the Cowin app without notice. These issues, experts, have warned will only aggravate once it opens for all above the age of 18 from 1 May.