Failure on vaccines

Refusal to support private sector has led to a roll-out flop

The pandemic’s second wave is gathering strength throughout India, with the number of new cases a day now crossing 150,000. Several states, including the hardest-hit Maharashtra, are complaining about a shortage of vaccines. Meanwhile, India has also effectively stopped exports of vaccines, leading to crises in other countries. India was supposed to be the vaccine factory of the world. This is what the government promised, and what it has boasted about at intervals over the past month. The Union health ministry, however, is wasting time instead on blaming various state governments. The vaccine roll-out has been hampered by the Indian state’s customary arrogance and its disdain for the private sector.

There is one central question that needs to be asked of the government by every Indian who is awaiting a vaccine: Where are your purchase orders? In every other country that can afford it, the government has reached out to vaccine manufacturers, and provided guaranteed purchase orders. The United States government locked in 100 million doses of the Pfizer vaccine even before it was demonstrated to be safe and effective, with the option for 500 million more. It repeated the pattern with several others. So did Europe and others. Many countries have locked in orders even with the Indian manufacturer, the Serum Institute of India. What did the Indian government do? It merely negotiated a low price, for the first 100 million shots. Then there was an inexplicable pause, as the government had not signed a purchase order. That order eventually came to SII, but for only 11 million doses. What is the government’s problem with paying for all it intends and needs to consume? How is SII supposed to scale up manufacturing to the degree required if it does not have the cash in hand to make that decision?

This leads to the other failure of the government, which is to ensure that adequate capacity is created on the correct timeline. It is unclear if so much as a single rupee went from the Indian government to Indian manufacturers to help them scale up capacity over 2020. Money came in from sources such as Bill Gates’ foundations. The politicians and bureaucrats perhaps think that private companies like SII are an arm of the government. In a once-in-a-century pandemic, the government just can’t allow manufacturing to be a trickle of what it could be, just because it does not want to partner in scaling up capacity with private companies.

The final failure of the government has been pricing. SII’s Adar Poonawalla said repeatedly that the company agreed to a deeply discounted price for the Indian government for the first 100 million doses, and after that it expected to open up sales so as to allow for more cash flow — again, to make the investment needed to increase production. It is far from clear that this agreement is being honoured by the government. If hospital beds are running short in Indian cities, it is because the weeks when the vulnerable should have been vaccinated were wasted. India will have to endure a summer with insufficient vaccines purely because the government still does not understand how private enterprise works. The result has been all too obvious: While US has just announced that all adults would be eligible to receive the vaccine in the next two weeks, India is still busy going in the opposite direction by refusing to relax the age restriction of 45 years and above.