Covid-19 has unleashed a disastrous second wave in India, for which the nation proved woefully unprepared. Vaccination for all should be now everyone’s goal if we want to achieve herd immunity and get back to normal. It is one of the most economical interventions for the survival against several diseases worldwide. The main aim of vaccination is to eradicate the dreadful infections from our society. Vaccines have a “positive externality.” A vaccinated person is not only comparably guarded against the disease himself/herself but also less likely to disseminate it to others.
India’s new vaccine policy, expanded its vaccination coverage from May 1, 2021, to people older than 18 years of age. There were several changes made in the new vaccine policy which created a controversy.
CHANGES IN THE NEW VACCINE POLICY
According to the policy document, the two vaccine manufacturers from India, Serum Institute of India (Covishield) and Bharat Biotech (Covaxin) would divide their supply into two baskets: 50% to the Centre and the remaining 50% to an “other than Government of India” channel comprising State governments, private hospitals and industries that have the facilities to administer the vaccine. The policy also stated that the latter will be able to obtain supply directly from the manufactures and negotiate with them separately.
Initially, Serum Institute of India wanted to charge Rs. 400/ dose for States and Rs. 600/ dose for Private sector. Similarly, Bharat Biotech announced Rs. 600/ dose for States and Rs. 1200/ dose for Private Sector. However, due to extensive criticism faced, both the manufactures decreased the price for the States. (Serum Institute to Rs. 300 and Bharat Biotech to Rs. 400).
Nonetheless, Standard economic theory indicates that this differential pricing is vulnerable to market failure. Excessive demand and low supply may lead to the possibility of corruption and black market emerging. The process of vaccine procurement will likely slow down as when multiple buyers are in a queue to negotiate with the manufactures about purchase quantities, payment logistics, and delivery plans, the private manufactures could be in a position to regulate public health outcomes as the supplies to the private sector will be more profitable than to States, causing its stock to dry up which can delay the vaccination scheme and prolong the Covid-19 crisis. That is unjustified.
This differential pricing also entitles those aged between 44-60 years to receive their doses at a lower rate from the Centre (Rs. 150/ dose) than from the state. Since, the Centre is the more powerful buyer, both Serum Institute and Bharat Biotech are likely to privilege the Centre’s demand first. These issues leave the states, especially the poorer ones facing financial difficulties and Private sectors at a disadvantage.
Although “public health” is a state subject as per Entry 6 of the List II of the Second Schedule, the Centre is designing health policies and taking the majority of decisions, since covid-19 has been declared as a “national disaster”, the Union is using its vast powers under the ambit of National Disaster Management Act (NDMA). It is not yet clear whether this vaccine policy will come under the scope of NDMA or the Ministry of Health and Family Welfare.
Nevertheless, it is incontestable that both Centre and the States have the same fundamental obligation to safeguard the health of the citizens. In this respect, there cannot be a difference between the Centre and States. Hence, by making the States compete in the open market for acquisition of vaccine doses, while the Union Government keeps an assured share for itself is discriminatory per se.
RIGHT TO EQUALITY
Right to Equality under Article 14 of the Indian Constitution guarantees equal rights for everyone. Article 14 states that “The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.” The basic concept of liberalism is to treat all citizens equally and Article 14 ensures the same to the citizens of India.
In the present circumstances, this fundamental right has been curbed as the new vaccine policy breed inequality. There are two kinds of people in India in this covid era. First, those who are well-to-do and can manage to stay back and work from home. This will help in breaking the chain of infection to others. Second, who are blue-collar workers; laborers, vendors, small traders, and agriculturists. Since, their nature of work demands them being on the field or on the shop floor which makes them naturally prone to infect others. For this reason, society gains from first vaccinating the latter as they have a higher negative externality.
However, the irony is that the section of people more susceptible to infecting others would also be low-income people, who cannot generally afford the vaccine. So, when the market is allowed to deliver vaccines, under such circumstances, those with higher incomes and even ready to pay more than what the private manufactures are currently charging will have a better access. The market will disregard the poor section of the society, despite them having a higher likelihood of spreading the virus. As a matter of fact, the higher the income gap between the two sections, the greater will be the extent of market failure from simultaneous oversupply and undersupply.
The Supreme Court in Suo moto proceedings on the Covid-19 crisis, asked several questions to the Centre about the different vaccine prices. “A bench of Justices D.Y. Chandrachud, L. Nageswara Rao and S. Ravindra Bhat observed “it is likely that compelling the State Governments to negotiate with manufacturers on the ground of promoting competition and making it attractive for new vaccine manufacturers will result in a serious detriment to those in the age group of 18 to 44 years, who will be vaccinated by the state governments”. The bench further noted that this particular age group comprises many poor people and already marginalized minorities like Bahujans, who “may not have the ability to pay” the elevated prices Serum Institute of India and Bharat Biotech have announced for state governments.” The Apex Court further had called for “revisiting” the Centre’s new vaccine policy on the ground that the current policy would prima facie result in violation of Article 14 and result in a detriment to the right to public health which is an essential component of Article 21 (Right to Life and Personal Liberty) of the Indian Constitution.
A WAY FORWARD
A good policy will try to achieve the maximum coverage as close to universalization as possible and do as quickly and cost-effectively as possible. Seeing that the pandemic disproportionately affects the low-income section of the society, it is crucially important that the policy is made equitable.
The easiest and smoothest method to achieve maximum coverage is to pay a single price to the vaccine makers for all their supplies by the government and offer vaccines to everyone for free of charge. By doing this, the affluent section of the society will not get to jump the queue, and those without sufficient means to pay the price will be saved from becoming the biggest victims of the crisis.
The vaccine procurement must wholly be done by the Central government to avoid delaying the vaccine program. The Union should also come up with a transparent formula for distributing vaccines to individual States.
The Covid-19 crisis threatens to crumble decades of development gains. The first wave destroyed some economic output permanently. Fortunately, we were able to escape with a relatively low number of fatalities. But the second wave is causing unimaginable human suffering. Ultimately, universal and speedy vaccinations can curb our losses. It is in our own interest to get not just ourselves but also others vaccinated.
 The Constitution of India, 1950, Art. 14.
 The Constitution of India, 1950, Art. 21.
Author: Radhika Jhanwar from U.P.E.S., Dehradun.