The Supreme Court has questioned the Centre’s logic that manufacturers are selling it COVID-19 vaccines for a hefty discount because it places bulk orders. The court asked the government then why it cannot buy 100% of the vaccines at a discount instead of leaving the States to fend for themselves.
“The Central government justifying its lower prices on account of its ability to place large purchase orders for vaccines raises the issue as to why this rationale is not being employed for acquiring 100% of the monthly CDL [Central Drugs Laboratory] doses,” a Bench led by Justice D.Y. Chandrachud noted in a 32-page order.
The Centre can buy vaccines for ₹150, while the States have to shell out between ₹300 and ₹600.
“If the Central government’s unique monopolistic buyer position is the only reason for it receiving vaccines at a much lower rate from manufacturers, it is important for us to examine the rationality of the existing Liberalised Vaccination Policy against Article 14 [right to equality] of the Constitution, since it could place severe burdens, particularly on States/Union Territories suffering from financial distress,” the court held.
It said the Centre, with a ₹35,000-crore budget to buy vaccines, has money to spare, unlike the States which have suddenly been burdened with the task to cough up funds for vaccines.
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“The Union Budget for 2021-2022 earmarked ₹35,000 crore for procuring vaccines . In the light of the Liberalised Vaccination Policy, the Central government is directed to clarify how these funds have been spent so far and why they cannot be utilised for vaccinating persons aged 18-44,” the court ordered.
The Centre’s liberalised vaccination policy gives it only a 50% role to purchase COVID-19 vaccines. The other half is equally shared between the States/Union Territories and private hospitals.
The court said the Centre had left the States with very little bargaining powers by pre-fixing with the manufacturers both the quantity and the price of vaccines meant for the States.
“ Prima facie , the only room for negotiation with the two vaccine manufacturers [Serum Institute of India and Bharat Biotech] was on price and quantity, both of which have been pre-fixed by the Central government,” the court reasoned.
Besides, the court said the States were handicapped in their direct talks with foreign vaccine manufacturers as the latter preferred negotiating with federal governments of countries.
The court also sought confirmation from the States about the Centre’s claim that “every State/Union Territory government shall provide vaccination free of cost to its population.”
“It is important that individual State/Union Territory governments confirm/deny this position before this court. Further, if they have decided to vaccinate their population for free then, as a matter of principle, it is important that this policy is annexed to their affidavit, so that the population within their territories can be assured of their right to be vaccinated for free at a State vaccination centre,” the court explained.
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The Bench directed the States and Union Territories to file their affidavits in this regard within the next two weeks and clarify their individual policies for free vaccination.
The court has asked the Centre to place on record its “written policy” to ensure the equitable distribution of vaccines across sections of society, and how this would factor into the rationale of equal apportionment between State/Union Territory governments and private hospitals. It also wants the government to enumerate the nature and extent of its intervention with respect to the final, end-user price charged by private hospitals, especially when a cap on procurement by the private hospitals has been set.