No light at the end of India’s COVID vaccine tunnel

From pricing to floating tenders, poor planning has made India’s much-needed COVID vaccine drive a non-starter

Bharat Biotech nasal vaccine on CoWIN
The lack of credible information from both the government and the manufacturers has only heightened tensions around the COVID vaccination drive.

India’s vaccine woes are likely to last much longer than those at the helm of affairs would like us believe. The grim shortage of vaccines is just one aspect of the problem. More importantly, there is no credible timeline on offer from anyone in authority about when we can expect things to improve.

As a result, utter confusion reigns. Nobody knows which category of people are to get what doses of which vaccine, when.

On May 22, a Saturday, 15.9 lakh vaccines were administered. Even if one ignores the next day, because vaccinations generally dip on Sundays, this was the lowest total for a Saturday since March 13, 2021. (For the record, 9.41 lakh vaccines were administered on May 23, Sunday.)

Also read: India’s COVID deaths estimated thrice of what govt is telling us: IHME


The Indian vaccination drive achieved its peak on April 7, when 5.04 million doses were administered — that is vaccinations per day are 68% lower than the peak levels achieved in early April. Indeed, India’s vaccination drive was already rolling downhill when Prime Minister Narendra Modi launched his celebrated Tika Utsav. Since then, it is in free fall.

Meanwhile, the markets — or whatever goes by in their name — have taken over. Although the Centre has said that those in the 45+ age group would get priority, there has been very little done to actually deliver vaccines for this segment of the population. And, that is because there are no doses available.

Meanwhile, the private sector in the healthcare chain — large corporate hospitals, smaller nursing homes and even pathology labs — is finding supplies trickling in, although on unpredictable lines. There is utterly no transparency in this process as people do not know where and when they can get vaccinated.

The private vaccine funnel

This funneling of vaccine seekers to the private markets has been conditioned by two factors, both of which result from the deliberate policy choice made by the Centre when it initiated its new COVID vaccination policy effective from May 1.

The first is the grim reality of vaccine shortages which, despite the brave promises of increased supplies, remain unsubstantiated. The second, arising from the failure to candidly admit the first, is the lack of a mechanism that ensures a credible and equitable management of the shortage. This would require not just respect for scientific principles but equity concerns. Such an approach would determine the normative standards that govern who receives the shots first and why.

Without this it is a free for all, depending entirely on either chance, or worse still, the resources and capability to receive this all-important potentially life-saving medical intervention in the pandemic that has consumed humanity.

Indeed, in hindsight, the Liberalized and Accelerated Phase-3 Strategy of COVID vaccination policy appears to have been badly named. After all, the only “acceleration” one has seen is in the price of the vaccines that are being sold through private channels.

Pricey shots

Two weeks ago, when the vaccine shortage had not yet assumed the alarming proportions they have now, even if in short supply, vaccines were available for ₹850 per shot in several private hospitals in Chennai, Bengaluru and some other cities. A friend in Bengaluru (<45) who got the shot then at ₹850 found that his partner’s (also <45) first shot cost ₹1,300 two weeks later at a private clinic, despite having booked a slot through the notoriously capricious CoWIN platform.

Also read: COVID-19 even after getting vaccinatedvaccination programme

Meanwhile, despite the official policy pronouncement that the Centre would bear responsibility and costs for vaccinating the 45+ population, the public facilities like government hospitals and Public Health Centres (PHCs) are starved of supplies. Tokens are being distributed on the basis of supplies received, which are mostly erratic and unpredictable.

As a result, despite lockdowns, fashionably called “restrictions” these days, these facilities are crowded, despite the best efforts of the severely stretched staff manning them. In fact, doctors and public health experts have warned that vaccination centres may prove to be breeding grounds for COVID infections.

Indeed, until very recently, for instance, in Bengaluru, the queues for COVID vaccination and testing ran alongside each other. Faced with grim shortages, desperate folk, even those above 45 years who were promised free doses, are increasingly being driven to the private outlets.

Where are the vaccines?

Most of the discussion is about Covishield, the Oxford-AstraZeneca vaccine that is being produced by the Serum Institute of India (SII), which accounts for 9 out of 10 COVID vaccines being used in India. The other vaccine, Covaxin, developed entirely indigenously by the Indian Council of Medical Research (ICMR) in partnership with Bharat Biotech International Ltd (BBIL), has been virtually missing from the scene. These are in extremely short supply — in fact have been unavailable for several days at the government-run facilities.

Indeed, many of those who have already received the first shot of the Covaxin and who have crossed the scientifically-prescribed safe window period for the second shot, have been scurrying around desperately seeking it.

The lack of credible and verifiable information from both the government and the manufacturers has only heightened tensions. Indeed, there have widespread reports of unrest at vaccination centres in various parts of Bengaluru, which in some cases has resulted in police action.

The Centre’s decision to thrust the burden of sourcing supplies on the states is likely to only ensure that the problem festers for several months. Economists like Ashish Kulkarni (Gokhale Institute of Politics and Economics) and several others, who have some knowledge of either supply chain dynamics or of the peculiarities of the pharmaceuticals industry, have argued that this goes against the grain in matters of sourcing supplies.

Anil Sood, a finance expert, referring to a recent WHO study, pointed out on Twitter that “pooled” sourcing of vaccines is the norm globally. The logic of this mode of sourcing is driven home by the fact that this results in significantly lower prices for buyers.

Price tiering

The recently released WHO’s Global Vaccine Market report for 2020 observed that “there is evidence of price tiering by procurement mechanism,” across vaccine types, price points and across countries or groups of countries. The WHO reported that in 2020, middle income countries (MIC) sourcing vaccines through a pool organised by entities such as the Gavi, UNICEF or the Pan American Health Organization Revolving Fund (PAHO RF) paid on average 60% less than countries sourcing vaccines individually.

The obvious logic, which is applicable to any well-known franchisee model in everyday life (think fast-food chains, for instance) is that organised bulk sourcing gives enormous bargaining clout vis-à-vis vaccine manufacturers.

Of course, vaccine manufacturers also draw comfort from the fact that such deals assure them of scales of production that are more viable, predictable and assured. It is obvious that when this is the case with national sovereign states, subnational entities don’t stand a chance in the ongoing global rate race for vaccines. Pushing states — and outrageously, even entities such as the Bombay Municipal Corporation — on this path was a foolish move destined to flounder.

Tenders destined to fail

This is what has exactly happened. Several states have floated “global” tenders for vaccine deliveries. An examination of the tender documents from states such as Tamil Nadu, Uttar Pradesh and Kerala shows that the move is unlikely to elicit any kind of tangible response.

Here is why. Take the case of the Tamil Nadu tender floated on May 15, which seeks a response from vaccine manufacturers, their agents or third parties importing them before June 6 (11 am). First, the size of the tender — 35 million doses — is puny at a time when countries are ordering in hundreds of millions of doses. Moreover, most vaccine suppliers are already stretched, booked to a significant extent of their capacities in the foreseeable future. Indeed, many countries, including India, have booked vaccines that have not yet been cleared by the WHO — Novavax’s vaccine, for instance.

Another factor that has escaped the attention of those concerned is vaccine pricing. International companies tend to price vaccines differently in different markets using the concept of economic value. For instance, Moderna charges $15 for a dose in the US and $18 in the European Union, but charges $32 for low-volume orders.

Obviously, if and when suppliers respond to the tenders placed by the states and other sub-national entities, they would be at prices at or even higher than what they normally charge for low-volume orders. The size of the order and its pricing complexities and the mark-up that third parties would charge for deliveries, imply that vaccine manufacturers are extremely unlikely to divert supplies from already committed markets.

Add to this the modalities of having to organise the logistics, particularly the cold chain networks, and you get a picture of an enormous layer of complexity for manufacturers already struggling with missed or fast-approaching deadlines. It is thus obvious that the handful of vaccine suppliers’ priority would be to deliver to those who have already ordered or paid for the vaccines. Manufacturers are unlikely to see this short-term opportunity as sufficiently attractive to destabilise their existing pricing patterns.

Tender troubles

The Tamil Nadu tender’s (issued by the Tamilnadu Medical Services Corporation Ltd) stipulation, that the bidder have a minimum turnover of ₹2,000 crore, would rule out Indian biologicals companies — those with the capabilities nearest to vaccine manufacturing — from entering the fray. Significantly, not even BBIL would clear the test.

Other features of the tender — such as those that allow the Tamil Nadu government to split the purchases among several bidders — is only likely to raise fears that orders may be even more fragmented than they already are. The UP government was forced to modify its tender after objections about its earlier stipulation that suppliers ought to make arrangements for vaccine cold chains.

Kerala issued its tender on May 18, for 30 million doses. Issued by Kerala Medical Services Corporation Ltd, the bids are scheduled to be opened on June 5. Although the eligibility criteria are less stringent than those prescribed in the Tamil Nadu tender, they are unlikely to draw the attention of global vaccine suppliers.

UP was among the first to float a tender — for 40 million doses for deliveries within six months of issue of intent by the end of the year. At the rate of 6-8 million doses per month these are to be delivered to nine warehouses at temperatures between -2°C and -8°C. The UP government also reserved the right to split the contract among different suppliers. It also reserves the right to ask other bidders to match the lowest bidder to facilitate such splitting in a 60:40 ratio.

Crucially, only suppliers of vaccines approved by the ICMR were eligible to bid.  This obviously ruled out vaccines like Pfizer, Moderna, Johnson and Johnson and several others; only Sputnik, among the foreign vaccines, were eligible. The Yogi Adityanath government realised this; within 10 days after floating the original tender, it modified it. It also liberated bidders from organising the logistics of the cold chain network.

The fact that the BMC was forced to extend the deadline is indicative of what is likely to unfold in the days ahead. Punjab, which has been forced to stop vaccinating the target groups in the first two phases of the vaccination drive because of extremely low supplies, is also exploring floating a global tender. However, its preliminary enquiries have elicited a response from Moderna, which has categorically stated that it will only supply vaccines to national governments.

Situation ripe for a black market

Andhra Pradesh Chief Minister Jagan Mohan Reddy wrote to Modi on May 22, pointing out that the move to allow private players to access supplies from vaccine manufacturers had sent out “wrong signals to the people.” He pointed out that thanks to the price “flexibility” offered to private entities, hospitals were charging ₹2,000-2,500 per dose.

He argued that in a situation in which the population above 45 years remained unvaccinated, and when it was not feasible for states to vaccinate those in the 18-44 bracket, “it appears very unreasonable to allow some private hospitals to vaccinate people of all age groups at such exorbitant rates.” Not only will the poor be left out but this would pave the way for the “black marketing of the vaccine(s),” Reddy contended.

The original sin for India’s crisis obviously was the ill-considered COVID vaccine deregulation policy. Neither the grim shortage, nor the spiraling prices, nor even the ominous possibility that a large proportion of Indians will be left behind, was unpredictable when the new policy was announced. Reversing the tide requires at the very least a reversal of the policy that led us to this crisis.