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Why the rich paying for vaccines creates a problem: Economist R Ramakumar tells TNM

Interview
In an exclusive event for TNM Members, Professor Ramakumar said that at the current rate, it will be at least 2024 by the time most people in India are vaccinated.
Economist, Professor R Ramakumar, teaching at the Centre for Study of Developing Economies, School of Development Studies in TISS, spoke to TNM Members in an exclusive conversation moderated by News Editor Anna Isaac and S Harikrishnan, a TNM Member, a postdoctoral researcher at Dublin City University and co-editor of Ala. Ramakumar said that the Union government has severely bungled the COVID-19 vaccination programme. In an hour-long interaction with TNM Members, Ramakumar, who has been critical of the Indian government’s vaccination programme, detailed the reasons why the ‘liberalised’ vaccination policy was flawed and how the government could overcome the challenges ahead. Excerpts from the session below.

 Q: Why should there be free vaccination in India?
Vaccines are a global public good — which should be available to everyone, everywhere, at all times, at an affordable cost; they should be easy to access and easy to administer. If all these conditions are to be met, there is no other way but to make the vaccination free for all and in a universal format. This is the globally accepted principle. This is why all the free market countries like the USA, UK, Germany, or France in the West have given vaccines free of cost. Vaccines are also a public good because they have positive externalities. There is also a social benefit in vaccinating people because they don’t infect others. 
Further, the Right to life is a fundamental right of every citizen. Under Article 21 of the Constitution, it is a constitutional obligation to provide free vaccines. Most of the research and development of vaccines and investment have come from public sources. For instance, Moderna are recipients of 2.5 billion dollars from the US government. BioNTech, which is an associate of Pfizer, is a recipient of 400 million Euros from the German government and 100 million Euros as debt financing from the European Union. So these are all taxpayers’ money. Because the taxpayer has financed much of the cost behind the research and development of the vaccine you should not ask the tax payer to pay twice.
Unaffordability of the vaccines also accelerates the problem of vaccine hesitancy in underdeveloped countries like India. 

Q: What was the problem with liberalised vaccination policy?
‘Liberalised’ vaccine policy is a misnomer. Nobody in the Union government thought of a ‘liberalised’ vaccine policy in the month of March or April. This change in the policy came after April 7, when there was a shortage of vaccines. Before April 7, the vaccination programme was going smoothly — not because of the daily production of vaccines but because they had adequate stockpiles. Once the stockpiles were exhausted, the Union government realised that they didn’t have vaccines. 
The change in policy was political and also due to the lobbying of the vaccine companies who wanted super profits against the normal profits. The Union government wanted to deflect criticism of vaccine shortage and evade responsibility by asking the states to procure the vaccines at a higher price while they continued to buy the vaccines at Rs 150. But the political strategy of blaming the states did not work, because they stood together. That’s why the change in policy was necessitated.

Q: Why was the government forced to change the ‘liberalised’ policy?
Besides the public outrage and the unified criticism of opposition states, the intervention of the Supreme Court (SC) led to the change in the policy. Each time the government of India gave an affidavit to the SC, they were walking into more and more trouble. Because during this, they were revealing more things which were hidden from the public. SC prima facie said that the policy was ‘arbitrary’ and ‘irrational.’ The SC consistently maintained that under Article 21 everyone had a right to free vaccines. 

Q: Serum Institute of India (SII) claimed that they wanted super profits to reinvest into building greater production capacity. Does this reasoning hold?
WHO and other charitable institutions had given a grant of 2.5 billion dollars to SII between 2005 and 2016 to expand production capacity of influenza vaccines. In November 2020, SII further received a grant of 300 million dollars from Gates foundation and WHO. They are recipients of a huge number of grants. So SII seeking super profits to reinvest in production building is nonsense. They are a very fortunate company. They make Rs 5000 crore of profit. So, the demand for super profit is absolutely unjustified. 

 Q: Shouldn’t the rich pay for the vaccines?
Not a single developed capitalist country is practicing this rule. It is because that distorts the vaccine market. It creates fragmentation in the vaccine market and disturbs the process of distribution. It also creates a problem of access to vaccines. In India, the government giving 25% vaccines to private hospitals is too high.  The calculation is that 50 crore of the population will get vaccination through private hospitals. But 50 crore people do not have the financial capacity to pay for the vaccines. After a point, private hospitals will exhaust their demand. In a poor country like India, you cannot have 50 crore people paying Rs 1000 or more for a vaccine. It is not going to happen. This is going to disturb the vaccine market. So the government should immediately make 100% purchases.

Q: How to make vaccines accessible? 
The centralised Co-Win portal has made a simple problem more complex. And has made the problem of access even more serious. Firstly, it is in English; it needs internet; ability to maneuver through. States are demanding autonomy in the vaccination distribution system. The distribution is best left to the wisdom of the state governments, who have an experience in running public health programmes and immunisation programmes. Co-Win has created more problems. It has created a top to down diktat kind of a process. Ideally, the bottom should be more flexible for the vaccination to be available to a larger section of the society.  

Q: Can’t the government override the patents act?
India has contradicting positions when it comes to IPR (Intellectual Property Rights). At the World Trade Organization, the Indian government is asking for the IPR to be waived, but despite the government fronting several crores for the research for Covaxin, it has not done the same. It has not made the technology available for other public and private vaccine companies in India.  There are eight public sector companies in India which can produce vaccines, but only after so much outrage, three companies were given the license to produce Covaxin other than Bharat Biotech. For the first four-five months, only Bharat Biotech was given an exclusive license to produce Covaxin. 

Q: Was India late in procuring vaccines?
Across the world, right from June 2020 onwards, countries have made ‘at risk’ investments in companies. For instance, the European Union has made investments in Oxford vaccine, Germany made investments in BioNTech, the US made investments in Moderna – de-risking the private sector to produce vaccines; to speed up research and development; and  expand production capacity. In return they get vaccines for a lesser price. In India, the government did not pay a penny to SII. I have sympathy for Adar Poonawala in this regard. The government did not tell SII about how many vaccines it would require. Only in January 2021, the government made a very late advance purchase order for a very small quantity. And Mr Poonawala had contractual agreements with others. When there was a problem of shortage in vaccines, the government shut down the exports. Besides, the government in the last decade considerably defunded the public health sector. 

Q: When will India get fully vaccinated?
At the present rate, by 2024 the 18+ population will be vaccinated. We have lost precious time. Even if we are going to increase our vaccine production by 2022, we will be facing newer substantial challenges of mutations, lockdowns etc. 
Watch the full interview here:

 

Source: TheNewsMinute.com