We Need A Dual Strategy For Covid Vaccine – Market-Based Pricing For Those Who Can Afford It
It is good to have a twin strategy, where public procurement in bulk for free vaccinations can be low-priced, and procurement for private use can be based on market-determined pricing.
One of the factors inhibiting the quick expansion of Covid vaccinations – apart from the nefarious propaganda against it by vested interests and opposition politicians – is this counter-intuitive one: it is being offered for free at this stage. We all tend to devalue what is free, presuming that there must be some ulterior motive behind this largesse.
From a policy and practical perspective, giving the vaccine free to frontline workers and the poor makes a lot of sense – the Bharatiya Janata Party (BJP) even promised to make the vaccine available free to voters in Bihar.
But the truth is that such large-scale freebies do not make economic or commercial sense. The only way to fund the free part of vaccinations from taxpayer funds is to get as many people as possible to pay for it.
Currently, there may not be enough vaccines available to go around, but in another three to six months, as CoviShield (the Oxford-AstraZeneca vaccine made by Serum Institute) and Covaxin (produced by Bharat Biotech) expand production, and a handful of other vaccines (by Pfizer, Moderna, Sputnik and various domestically-produced ones) come into the market, we will have a problem of plenty, not shortage.
It is thus good to have a twin strategy, where public procurement in bulk for free vaccinations can be low-priced, and procurement for private use (by corporates and individuals) can be based on market-determined pricing.
This means the government needs to indicate the timeframe after which companies can also procure in bulk from anywhere at prices negotiated with the vaccine makers. Clinics and doctors can also procure smaller lots of dosages for individuals who want to be vaccinated at a price they can afford. And all in the comfort of their family doctor’s clinic.
While the Pfizer and Moderna vaccines need ultra-cold storage facilities and thus can be afforded only by the relatively rich, there is no reason why they cannot be authorised for use at a high starting price for those who are willing to pay for them, provided companies can pay for importing and storing them at the relevant temperatures.
Some rich companies like Reliance or TCS could procure these vaccines for staff who have no option but to travel and meet customers all over the world, even as companies use the lower-priced vaccines from Serum Institute and Bharat Biotech for office staff. At Rs 1,000 for two doses, many mid- to small companies can surely afford to pay for these vaccines.
The big psychic benefit of having people pay for vaccination is the huge increase in trust it will bring about. Currently, phrases like “guinea-pigs” are being bandied about by critics, thus sowing doubts in the minds of vaccine recipients that they are being used to test something that is still not safe to use.
If they can see people pay good money to buy the same vaccines that they get free, they will be able to differentiate between motivated propaganda and the truth.
The time to announce a policy for paid vaccination is now, not much later, after the process is concluded for frontline workers. A simple under-appreciated truth: doctors and healthcare workers are sometimes more difficult to convince than ordinary people about the medicines they should use because they know that even the best medicine sometimes does not work.
Healthcare professionals are a bit too close to the realities of death and disease to be truly objective about their efficacy. But data tells us that medicines and vaccines do work, despite the occasional failure. It is human to focus on the failures rather than the much larger field of success.
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