Mumbai: The central government's announcement liberalising India's COVID-19 vaccination strategy from May 1 comes as India's daily vaccination rate has been falling for a week. Over the last week, India administered about 2.7 million doses on average per day, down from 3.6 million during the previous week.

The nearly million-doses dip each day coincides with several states reporting shortage of vaccines, as well as the numbers of COVID-19 cases and deaths breaking records. India now has the second highest number of reported COVID-19 cases in the world and the fourth highest number of deaths. Every day, for the past five days, India has been reporting at least 200,000 cases per day and at least 1,000 people have died each day due to the disease.

Ground reports from multiple cities show that even these numbers may be underestimated. India must vaccinate at the rate of 10 million doses per day to contain the spread of the virus and save lives. But with the vaccine shortage likely to extend till July, as our analysis shows, this seems unlikely.

Vaccine shortage and decreasing vaccination rates

Over the last week, 22 states and union territories have administered fewer vaccine doses per day as compared to the previous week, our analysis of data released by the health ministry has found. These include states with the highest number of active cases: Maharashtra, Uttar Pradesh and Chhattisgarh

At the current pace of vaccination, India will not be able to meet its target of vaccinating 300 million people by August. At the current pace, this target will be met only by October, our calculations show. To meet the target, India must administer at least 3.5 million doses per day for the remaining of the 133 days till August.

The central government had 20 million vaccine doses in stock and 16.7 million in the pipeline, as of April 13. This supply meant to last till April end would have been depleted by April 22, our analysis had found.

Vaccine availability would improve by July, Niti Aayog member and chairperson of the government's empowered group on Covid management, Vinod Paul, was reported to have said, explaining that the government's opening up of vaccination would help ramp up domestic production as well as imports.

Currently, India's vaccination drive is based on two vaccines--Oxford AstraZeneca's vaccine Covishield, produced by Serum Institute of India (SII), and Bharat Biotech's Covaxin. Of the 126 doses administered so far, 91% have been Covishield.

The Serum Institute is manufacturing 60-65 million doses per month, Adar Poonawalla, CEO of the institute said on April 6. Covaxin has a lower production capacity at 12 million doses per month. The combined 72-77 million doses per month are nowhere near enough to sustain the pace of 3.5 million doses per day.

To increase the supply of vaccine doses, the government has approved a supply credit of Rs 4,500 crore--Rs 3,000 crore to SII and Rs 1,500 crore to Bharat Biotech--to help them create more production capacity. The government has also approved Russia's Sputnik V vaccine for emergency use, and has said that approvals for other vaccines already approved by foreign regulators will be fast-tracked.

But this will not translate into immediate increase in supply. When requesting for a Rs 3,000 crore grant, SII had said that it would be able to increase its production and supply to 100 million doses per month only by June. Similarly, Bharat Biotech is expected to take until August or September to increase production to 60-70 million doses per month.

While Sputnik V has been approved, there is no clarity on its price and when it will be ready to be supplied. No other vaccines have been approved so far, though the government promises to expedite approvals going forward.

The burden on states

Experts had been questioning the logic of restricting vaccination to the most vulnerable while denying it to the most economically active under-45s. The April 19 announcement fixes this: starting May 1, states can decide whether to provide vaccination to those aged 18 and above; also, since vaccines will also be available in the open market, anyone who can pay could get a shot.

The Centre will acquire 50% of the stocks from vaccine manufacturers, and state governments and private entities would get to purchase the remaining 50% at a price "pre-declared" by the manufacturer. With no cap on the price, some economists have warned that this will transfer the expense to states, adding to the states' financial burden. Provision of public healthcare is state governments' responsibility in the Indian federal structure.

"The states have already faced an enormous amount of financial burden over the last one year because they have had to deal with the impacts of the lockdown," R. Ramakumar, economist and professor at Tata Institute of Social Sciences told IndiaSpend, "They were faced with shrinking revenues combined with increased expenditure to ramp up the availability of hospital beds, treatment centres, oxygen cylinders and ventilators." Having to purchase the vaccines directly from manufacturers will further constrain their finances, he said.

Currently, the central government acquires vaccines from manufacturers at the regulated prices--Rs 150-160 for Covishield and Rs 206 for Covaxin--and supplies to the state governments for free. Under the new policy, the central government will allocate its 50% of the vaccines purchased to states based on their numbers of active cases and their vaccination performance, including wastage rates.

This share will be used for vaccinating those already eligible, which includes healthcare and frontline workers and those above the age of 45, at government-run centres for free. If the supply of vaccines does not increase for the next two months, this 50% share will not be sufficient to vaccinate those eligible even at the current slower pace.

States can decide, individually, if they want to provide free vaccinations to those aged 18 and above, for which the state governments will have to bear the cost for their citizens who don't fall in the existing criteria. They may also have to compete with private buyers to purchase scarce vaccine doses, for which no criteria has yet been set. "In the presence of a vaccine shortage, there has to be rationing and this rationing has to be based on some criteria," said Ramakumar, "I think, most likely, it will be a price-based criteria."

This makes Centre's share immune to competing market demands, but not the states', Ramakumar said, adding, "Vaccine manufacturers get to decide not just which states to give to first but whether to give to states or to private procurers."

The policy also allows vaccination for all aged above 18 years in the private sector, where providers can set the rates, which have also not been capped. "The present rate at which vaccines are given to the centre are reasonable," added Ramakumar, "But the government is succumbing to the pressure from vaccine manufacturers to move out of the current pricing regime and raise prices. The manufacturers are making normal profits at the current price but they want to make "super profits" by pricing it at around Rs 1,000. It is this increase from Rs 150 to Rs 1,000 that is staring at us."

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