How ready are states for the vaccine race?
7 min read . Updated: 29 Apr 2021, 06:04 AM IST
PremiumAs vaccinations open up for all adults, states are saddled with a difficult task in the days ahead. Are they prepared?
As the deadly second wave of the covid-19 pandemic wreaks havoc across India, it has become all the more critical to increase both the pace and the coverage of vaccination. Even with the Centre liberalizing the covid-19 vaccine policy and allowing state governments and private hospitals to deal directly with private vaccine manufacturers, there remain huge questions on India’s ability to vaccinate its entire adult population speedily.
While every Indian above the age of 18 becomes eligible to receive a vaccine dose on 1 May, a host of issues remain to be resolved before India begins the fourth—and most crucial—leg of its mammoth vaccination exercise.
While states and hospitals are free to procure vaccines, can manufacturers meet the surge in demand? What is the status of vaccine procurement in India and how does it compare to other countries? What are the financial and operational challenges facing states? The answers to these questions collectively will offer clues as to how India’s attempt to vaccinate 850 million Indians unravels in the next six months.
In April, India has averaged about 3 million vaccine doses per day. In order to cover half the eligible population by 31 October, this clip needs to increase to 4.6 million a day. Wide variance is seen among states. Till 27 April, while Kerala had given about 20 doses per 100 population, Bihar and Uttar Pradesh had done only 5. Importantly, as states are expected to take the lead from this weekend, the disparity in existing health capacity will be a crucial factor: Maharashtra, for instance, has about 90% of the population of Bihar, but thrice as much functioning cold chain facilities.
Supply factors
As on 27 April, of India’s estimated population of 1,347 million, about 123 million individuals had received the first of a covid-19 vaccine, and another 25 million had received both doses.
In the category of those aged over 60, about 50 million—or 36% of the total projected population in this age group—have received the first dose of the vaccine. Come 1 May, an estimated additional 600 million will become eligible for the vaccine. Will vaccine manufacturers be able to keep up with demand?
Some clues come from the Duke Global Health Innovation Center (GHIC), a centre at the US-based Duke University that compiles data on vaccine procurement by countries and manufacturers. This shows that India’s confirmed purchases of the covid-19 vaccine amounted to 205 million doses as on 23 April. Another 904 million doses were listed as “optional expansions of existing deals".
At present, the aggregate manufacturing capacity of Serum Institute of India (maker of Covishield) and Bharat Biotech (maker of Covaxin)—the two Indian vaccine makers—is 120 million doses per month. In the July to September quarter, this will increase to 200 million doses per month. However, a portion of this production would go to 64 lower-income countries as part of the World Health Organization’s COVAX alliance. The Serum Institute is committed to provide 240 million doses of Covishield to COVAX by June-end, of which India will also be a recipient.
At the average rate of vaccination in April (about 3 million a day), 276 million Indians of 850 million would have received both doses by 31 October, when epidemiologists expect a likely third wave of covid-19 to emerge. That’s roughly one-third, which is insufficient to deter a third wave. To ensure at least 50% coverage of this set, the average daily vaccination rate will need to increase to 4.6 million per day. And supply will need to keep pace.
Production of Sputnik V, a third vaccine, is expected to commence in July, but it is still not clear how many of these doses may become available within India. Russia’s sovereign wealth fund, RDIF, which has been marketing the Sputnik V globally has announced that the first batch of the vaccines will arrive in India on 1 May. While other global vaccine majors such as Pfizer and Johnson and Johnson have been in talks with the government, there is no clarity on when these vaccines will be available in India.
Limited procurement
The paucity of vaccines—amplified by the current crippling surge in infections—has called into question the Indian government’s conservative procurement policy till date. There are large disparities among countries on vaccine stocks. High-income countries such as the United States, Canada, and in the European Union have hedged their bets by reserving a large number of doses of various vaccines, enough to vaccinate their population several times over.
Most of these countries have entered into direct deals with vaccine manufacturers, bypassing global distribution arrangements such as COVAX. For instance, Canada has procured 8.67 doses per inhabitant, according to data from Duke GHIC. The US, which is in the news for its initial reluctance to share surplus doses of a vaccine that it is not currently using, has procured 4 doses per inhabitant. Even Brazil has locked up 1.93 doses.
India, by comparison, locked up only 0.15 doses per inhabitant, though this came with the implicit understanding that Serum Institute and Bharat Biotech would enable continuous supplies. It was a strategy that bound India to these two manufacturers—and their capacity limitations.
It’s only this month that India has moved to widen its vaccine portfolio. While this will increase supply, it will take time—and India will continue to lose valuable time. This global inequity spells trouble not only for the most vulnerable regions but also globally, as mutated strains will eventually spread to all regions, wreaking havoc.
State questions
Considering the paucity of vaccines at the national level, considerations of pricing, distribution and accessibility within the country become even more critical. The central government will restrict itself to vaccinating the population over 45 years of age (along with healthcare and frontline workers). The 600 million persons in the 18-45 years age group will access vaccines either through a state government facility or via private hospitals.
So far, both Serum Institute and Bharat Biotech have been selling vaccine doses to the Centre at ₹150 per dose. In the post-1 May dispensation, Serum Institute has said it will charge ₹300 per dose for its Covishield from the Centre and states for fresh orders, and ₹600 per dose from private hospitals. Similarly, Bharat Biotech will sell its Covaxin at ₹600 per dose for states and ₹1,200 per dose from private hospitals.
Therefore, the states, whose revenues have already been decimated by the pandemic, have a difficult decision to make. Will they choose the unpopular route of making citizens pay, wholly or partially, or will they absorb this cost? At least 10 states have said they will bear the cost, including Assam, Chhattisgarh, Delhi, Haryana, Jharkhand, Kerala, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh. Rajasthan, for one, has said it will spend ₹3,000 crore on this exercise in 2020-21, whereas its total receipts for the year is expected to amount to about ₹1,48,000 crore.
An analysis by India Ratings & Research, a credit rating agency, shows the total cost for vaccinating all adults in India will be ₹67,193 crore, which amounts to 0.36% of the national GDP. If this expenditure was divided between the Central and state governments, the fiscal impact would be 0.12% of GDP on the Union budget and 0.24% of GDP on the state budgets (see chart 1). However, some states with a larger population and lower revenue generating potential such as Bihar and Uttar Pradesh would face the highest cost (0.6% and 0.47% of their respective GSDP). The Centre had allocated ₹35,000 crore for covid-19 vaccination in this year’s Union budget.
Ultimately, given the inordinate cost on human lives, as well as the economic impact of the pandemic, the cost of universal vaccination would be a small price to pay, even though this is likely to be a recurring expense to be undertaken every 12-18 months. A greater challenge at present is to beef up procurement and ensure vaccines are available to all those who need them. This can be accomplished by ensuring greater efficiency in vaccine use (reduced wastage), greater support to indigenous manufacturers to boost production, and enabling the manufacture or sale of promising foreign vaccine candidates within the country.
States, too, will have to step up in execution. A March 2021 study by think-tank IDFC Institute and B2B healthcare platform Pharmarack showed large variances among states in their ability to carry out the covid-19 vaccination drive. For each state, the study crafted a score based on four components: pharma cold storage capacity, Niti Aayog’s health and innovation indices, and disaster resilience. Based on these scores, the study found Maharashtra, Tamil Nadu and Karnataka were among the “most prepared" for what’s to come in the months ahead, while Bihar and Uttar Pradesh were among the “least prepared" (see Chart 2).
The current wave of the covid-19 pandemic is set to peak in large parts of the country in mid-May, according to forecasts by the health ministry. While it leaves a trail of devastation in its wake, it is essential to ensure, through speedy vaccination, that a potential third wave forecast for October-November will not lead to the same disastrous consequences. Assurances of medical assistance from countries ranging from the United States to Russia and China is a welcome development, but a robust and expansive vaccination strategy is the only long-term solution to the pandemic in India. And a large part of this critical task lies in the hands of the states now.
Arjun Srinivas is with howindialives.com, a search engine for public data
