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Explained | Why did the Centre reverse its COVID-19 vaccine policy?

Rajkumar Haryani, who painted his body to create awareness about vaccination, receives a dose of a COVID-19 vaccine in Ahmedabad on June 12, 2021.

Rajkumar Haryani, who painted his body to create awareness about vaccination, receives a dose of a COVID-19 vaccine in Ahmedabad on June 12, 2021.

The story so far: Prime Minister Narendra Modi on June 7 reversed the Central government’s decentralised policy for procurement of COVID-19 vaccines, declaring that from June 21, vaccines for everyone above the age of 18 years would be procured by the Central government and distributed free to the States. This ended the month-old controversial system of States being asked to procure vaccines for the 18-44 years age group at prices announced by domestic manufacturers and import vaccines through open tenders.

Why was the policy reversed?

The Centre’s announcement came after the Supreme Court on May 31 held that the Union government’s policy of not providing free vaccines to those in the 18-44 years age bracket was prima facie “arbitrary and irrational”. “The policy of the Central Government for conducting free vaccination themselves for groups under the first 2 phases, and replacing it with paid vaccination by the State/UT Governments and private hospitals for the persons between 18-44 years is, prima facie , arbitrary and irrational,” the court said in its order.

Editorial | A necessary reversion: On going back to centralised procurement of vaccines

Under the latest policy, the Centre said it will procure up to 75% of the doses of vaccines from manufacturers and will provide them free of cost to the State governments. Private institutions can procure the remaining 25% of doses.

What is the state of vaccine availability?

Data on availability from individual manufacturers and supplies to each State have not been published uniformly by the Centre. Amid reports of severe shortages in many States and the vaccination drive being suspended for the 18-44 years age group in a number of places, the Centre said on June 9 that thus far, over 25 crore (25,06,41,440) vaccine doses had been provided to the States and Union Territories through the free distribution channel and direct procurement category. Of these, 23,74,21,808 doses had been consumed, including wastage, and 1,33,68,727 remained to be administered.

Some data is available from the Centre’s arguments in the Supreme Court on the three available vaccines at present. The court recorded the position on May 31 as follows: the production at the Serum Institute of India (SII), which makes Covishield, is being raised from 5 crore doses a month to 6.5 crore doses by July 2021; Bharat Biotech, the maker of Covaxin, will raise capacity from 90 lakh to 2 crore doses per month, touching 5.5 crore doses per month by July; availability of Sputnik V will go up from 30 lakh doses to 1.2 crore doses a month by July.


In a letter to Union Home Minister Amit Shah, sent at the end of May, SII said it would be able to provide 10 crore doses in June. Moreover, the Union Health Ministry said the production capacity of Covaxin, which was 1 crore doses in April this year, was expected to touch 10 crore doses a month by September. The Centre said it was in talks with other manufacturers, such as Pfizer, Moderna and Johnson & Johnson, for procurement, but the negotiations were reportedly bogged down by demands from the companies for indemnity against any compensation claims.

Soon after the reversal of the Centre’s vaccination policy, it was announced that fresh orders for 44 crore doses of Covishield and Covaxin had been placed by the Union government, which would be available from August-December this year. In addition, it also placed an order for 30 crore doses of a protein sub-unit vaccine produced by Hyderabad-based Biological E.

The Supreme Court has directed the Centre to provide specific details of its vaccination initiative , including procurement, percentage of population covered, and plan for coverage.


What is the outlook for June supply?

The Centre has said that a total of 12 crore doses will be available for June this year. Of this, 6.09 crore doses will be available to the States and UTs for the priority groups — healthcare workers, frontline workers and people aged 45 years and above — as free supply from the government. Besides this, around 5.86 crore doses will be available for direct procurement by the States, UTs and private hospitals.

This statement was issued at May-end, and the court ordered the Centre to outline its plan and the official policy for the future. Greater clarity will come from the court submissions on how the available doses will be used, including the quantum for private hospitals.

Meanwhile, regulatory requirements for approved imported vaccines have been relaxed and they can be used almost immediately upon receipt, as the government has waived the requirements of bridging trials and testing of each batch at the Central Drugs Laboratory, Kasauli. Small quantities of doses were supplied to State governments in the first week of June as immunisation rates dropped sharply.

How has the pricing of vaccines changed?

Pricing of COVID-19 vaccines, both for government procurement and for beneficiaries, has shifted since the first round of sponsored vaccinations in January for healthcare and frontline workers. For vaccination of these priority sectors, the two vaccines were initially sold to the Centre at special prices — ₹200 a dose for Covishield up to 100 million doses, and ₹295 per dose for Covaxin, with free doses of it provided to the Centre effectively reducing the price to ₹206.50 each.

When the second phase of vaccination was launched on March 1, the Centre capped the price for Covishield and Covaxin at private hospitals at ₹250 per dose.


Under the decentralised distribution of vaccines from May 1, this cap was removed and manufacturers announced differential pricing for State governments and private hospitals.

However, these developments were soon rendered moot by a widespread shortage of vaccines, and governments largely provided vaccines only to the 60-plus and targeted 45-plus categories.

Now, having taken over the responsibility of free vaccination for all age groups from June 21, the Central government has announced new prices for private hospitals. They can charge a maximum of ₹150 per dose as service charge and a GST of 5%, and with these, the maximum price for a dose of Covishield would be ₹780, for Covaxin it will be ₹1,410 per dose, and Sputnik V would be available at ₹1,145 a shot.

What is the situation in the States?

According to data compiled by The Hindu , as of June 12, 14.9% of the population had got at least one dose of a vaccine, and 3.4% had got both doses .

Many big States had fully vaccinated only a small segment of the population as of that date: 51.2 lakh in Maharashtra, 45.1 lakh in Gujarat, 29.8 lakh in Karnataka, 22.2 lakh in Kerala, and 26.1 lakh in Andhra Pradesh. Single-dose coverage in these States varied between 88.7 lakh (in Kerala) and 2 crore (in Maharashtra).

The shortage of doses prompted many States to announce a partial suspension of vaccinations, particularly for the 18-44 years age group, and in some cases, for first doses.


The Hindu’ s Data Team, based on official data up to May 24 — after which they were not published — estimated that utilisation in the largest States ranged from 86.6% in Uttar Pradesh, 84.7% in Tamil Nadu, 97.9% in Maharashtra and 92.8% in Bihar; the figure was 95.4% for Delhi. In the second wave of infections, the demand for vaccines shot up. For instance, in the past few weeks, Tamil Nadu’s utilisation rate has increased sharply, and as of June 6, the State had utilised over 95% of vaccines it received from the Centre and through its own channels.

Most States drew a blank with their efforts to directly procure vaccines at the global level, since pharma companies preferred to deal only with national governments. The Delhi government has complained that the Centre issued a gag order to States and UTs against publishing information on vaccine supply and availability, as the world’s “largest immunisation programme” came under intense scrutiny.

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Printable version | Aug 20, 2022 8:26:40 am | https://www.thehindu.com/sci-tech/health/explained-why-did-the-centre-reverse-its-covid-19-vaccine-policy/article60676896.ece