How much will the Rs 35,000 crore allocation for Covid-19 vaccines help?

At the time of writing, India had managed to inoculate around 3 million health care and frontline workers since launching its nationwide vaccination drive on January 16. 

Krishna Ella, chairman and managing director of Bharat Biotech, said in a statement that the Rs35,000 crore allocation to vaccines signals a shift to preventive health care, a validation of the fact that vaccines are the most cost-effective health care interventions. “The finance minister's commitment [toward] providing more funds in order to contain the coronavirus pandemic spread in the country and provide an effective, smooth path for the vaccination scheme will help contain, and lead our nation towards accomplishing a Covid-19 disease-free Bharat,” he said.

According to a Morgan Stanley pre-Budget report dated January 17, the cost to the government for procuring Covishield has been Rs200 per dose for the first 100 million doses, after which there will be a tender process. For Covaxin, the price is Rs295 per dose (excluding taxes) for 3.85 million while 1.65 million doses are being given free, bringing down the effective price to about Rs206 per dose. “The government is thus paying Rs2.3 billion for Covishield while it is shelling out Rs1.6 billion for Covaxin,” the report says. 

The government has targeted vaccination of around 270 million senior citizens and people with comorbidities by July. “It remains to be seen what is the share of vaccination expenditure the state governments will have to bear,” says Srinath Reddy, president, Public Health Foundation of India (PHFI). 

According to him, one question that will have to be asked at some point is to what extent this budgetary allocation will take vaccine diplomacy into consideration. “We are giving vaccines to other countries, some of them in soft diplomacy, free of cost. So how much of the additional cost for Covid-19 vaccines will be only for India and, how much will be distributed to the states, how much will go abroad, all this will have to be sorted out. As of now, the government has indicated that they will fund vaccines more,” says Reddy. 

“The allocation around funding for Covid-19 vaccines is welcome as this will hopefully help in supporting further roll out of the current vaccination program into our priority population segments, and can also help in negotiating better prices from manufacturers,” says Anant Bhan, a global health, bioethics and health policy researcher. “However, we also need to focus on strengthening health systems, which will enable us to prepare and respond better to health crises such as a pandemic, and also to be able to support activities like vaccination.”

Hitesh Sharma, tax partner and life science sector leader, EY India, had said that there was an expectation that the government will increase the scope of the Pradhan Mantri Jan Arogya Yojana [PMJAY, or Ayushman Bharat], which currently covers close to 50 crore people with an insurance cover of Rs5 lakh per family. Pre-Budget, he had said that the government could look at expanding the Rs5 lakh limit taking into account vaccination expenses so that people have money left to take care of other critical illnesses.

“The government has not increased the limits of the insurance scheme, but they have made a clear statement of financing vaccination [for low-income and priority groups]. Even if they buy two doses of the vaccine at Rs400, with the current allocation, they could easily cover vaccination for more than 70 crore [700 million] people,” he says. “Hopefully, the states should also come forward, because health is, after all, a state subject.”

Apart from Covid-19 vaccines, the finance minister also announced that the pneumococcal vaccine, developed indigenously by the Serum Institute of India and currently limited to five states, will be rolled out across the country. “This will avert more than 50,000 child deaths annually,” she said.