Amidst shortage, allotting 25% of vaccines produced to private hospitals will aggravate vaccine inequity

In the revised vaccine policy of June 7, private hospitals can continue to procure 25% of vaccines produced by the two manufacturers at a far higher price. This goes against the grain of the universal free vaccination to achieve vaccine equity. Vaccine procurement should ideally be 100% by the government and provided through public and private sector until we reach at least 70% coverage of those above 45 years and the high-risk categories in the younger ages, say Dr. Gagandeep Kang and Dr. Chandrakant Lahariya.

On June 7, when India announced a reversal of vaccine procurement to a system of centralised procurement with free vaccines to be provided for the 18-44 age group, it allowed 25% of vaccine procurement exclusively by the private sector.

In an email, Dr. Gagandeep Kang, Professor of Microbiology at CMC Vellore and Dr. Chandrakant Lahariya, physician-epidemiologist and a vaccines and health systems expert discuss the ethical and structural challenges of setting aside 25% of vaccines for private hospitals.

Is it prudent to allocate 25% of vaccine supplies to private hospitals when there is shortage of vaccines? Does selling vaccines, and too at a far higher price, go against the grain of the universal free vaccination programme that is needed during the pandemic?

Gagandeep Kang: The universal vaccination program should provide for free vaccines to all. The goal of the immunisation program should be clearly defined, whether it is prevention of severe disease or deaths, or restoration of the economy, or a calibrated mix of the two primary aims.  

When there is a shortage of supply, groups of individuals that need to receive vaccines first should be clearly delineated in the prioritisation policy. Sometimes it is not possible to identify or address all priority groups in an initial listing.

In India, we have always followed a two-tiered structure for immunisation. The bulk of immunisation is provided by the public sector which reaches the length and breadth of the country. A smaller proportion of immunisation is provided by the private sector, on payment basis; a much wider range of vaccines are available for those who can afford to pay for them.

If it is decided, as it has been by the government, the private sector purchase of vaccines is justified then clearly selling vaccines follows prior practice. The difference is the shortage in supply, and the need to ensure the coverage required for the target population.  It would have been useful to have some guidance on the expected coverage that needed to be achieved before opening up to the private sector.  

With regard to the pricing, the private sector has always charged a higher price for immunisation both for the purchase of the vaccine, which is determined by vaccine companies, and for the clinics and hospitals that deliver the vaccination. 

Chandrakant Lahariya: The private sector has around 3-4% of total COVID-19 vaccination sites. Even if we factor in ‘on the campus vaccination drives’, which are being carried out by the private sector, the total vaccine requirement of the private sector is not more than 10% of the current availability. Therefore, allocation of 25% of available vaccines to the private sector is essentially cutting down the vaccine supply to the public sector facilities.

Moreover, allocating one-fourth of vaccination at an average 7-8-fold higher price (even if we factor in share of various vaccines); essentially means the total cost which people have to pay for vaccines would be around 1.75-2-fold higher than what the government would spend for three-fourth of the vaccine supply. At the vaccine sharing formula, of the total COVID-19 vaccine cost in India, two-third will be paid by the people. Then it becomes predominantly a paid program, rather than a free vaccination program, as the government is calling it. 

Will private hospitals predominantly found in urban areas lead to vaccine inequity in rural areas? 

Kang: Vaccine inequity is a critical area of concern. However, immunisation in rural areas is not usually undertaken by large private hospitals. Private hospitals are located in and serve the populations of urban areas. Even before the private provision of vaccination started, inequity was a concern, both because of the digital divide as well as the delivery of vaccines in rural areas.

We also need to think about the communication and vaccination messages and processes that need to be in place for rural areas, and the potential private partners to deliver these vaccines in rural or hard to reach areas, to reduce vaccine inequity. 

Lahariya: This is actually the key concern. Vaccination from private facilities would remain mostly for urban settings. This essentially means the rich and urban population has higher availability and easier access to the vaccines. This further aggravates vaccine inequity as even the government vaccination sites are far and few in rural areas. We have already seen that with technology-driven solutions to get registered the gap widens and puts poor, vulnerable, rural and marginalised — who actually need the vaccine most — at the end of vaccine access. There is reportedly higher vaccine hesitancy in the rural population. All of this understanding should be used to develop special strategies by the government to proactively address vaccine hesitancy.  

Despite claims that allowing private hospitals will lead to exponential increase in vaccination coverage, only about 10% of vaccines were administered by private hospitals early on when there was a cap on price. Will we see an encore of this with a cap on vaccine administration charges?

Lahariya: In the four-decade old universal immunisation program (UIP) of India, the private sector share of total vaccines is around 15%. It is the government facility which delivers around 85% of UIP vaccines. Thus, there is no reason to believe that the private sector would have any big role in COVID-19 vaccination. Moreover, the market price of currently licensed COVID-19 vaccines is far too high and is affordable to only the rich. The service charge is a fraction of the vaccination cost. The core issue is the vaccine price.

Should vaccine procurement not be 100% centralised and private hospitals provided free vaccines by the government?

Kang: I think that vaccine procurement should be 100% by the government. This should be provided through both public and private vaccination facilities until we reach at least 70% coverage of the above 45 years age group and the high-risk categories in the younger ages. After that, the government could consider the allocation of a proportion of vaccines through the private sector and let the free market operate. Of course, once it comes to children needing vaccination, we will need to reconsider based on supply and strategy. 

Lahariya: ​The ​Central government should pay and procure​ 100% of vaccines at a single price. For people, vaccines should be completely free, no matter whether they go to a government or a private facility. At a private facility, the service charge should be paid by the government, on behalf of people. It is a public health emergency and not ​​normal​ times​.

Will it not be prudent to allow imported vaccines (Pfizer, Moderna and J&J) available through private hospitals while making Covishield, Covaxin and Sputnik V vaccines free even in private hospitals?

Kang: I think this is an excellent idea. The imported vaccines other than J&J have storage requirements that can be extremely challenging for government facilities to deliver. One way to think about this might be that any vaccines that are purchased by the central government for the national immunisation program could be delivered by vaccination facilities anywhere based on their need. Other vaccines that are not included in the national program could be purchased by private providers and administered through their own facilities or outreach clinics. 

Serum is supposed to increase capacity to 100 million doses per month by July. Covaxin production too is supposed to increase to 60-70 million per month by July-August. But the government is set to procure only 250 million Covishield doses and 190 million doses of Covaxin between August and December. This translates to procurement of just 50 million doses of Covishield and 38 million doses of Covaxin per month by the government during this period. Will that mean that private hospitals will get more than 25% of vaccines produced?

Kang: I think the orders currently placed by the government are not the entirety of the vaccine doses that will be needed or procured given the policy announced by the government. Therefore, the figures currently available for the gap between the production and the availability of future doses within the public immunisation program, are unlikely to be directed entirely to the private sector. I think we should wait for the government to place additional orders with existing manufacturers.

Lahariya: I believe the manufacturers would use some of this to fulfil their bilateral sales/purchase commitment and global commitment such as COVAX, which in my opinion is a fair deal.    

Is it sound rationale to say that higher charges levied at private hospitals will “incentivise production by vaccine manufacturers and encourage new vaccines”? 

Kang: High prices for vaccines have encouraged vaccine manufacturers to invest in the development of new products. For every manufacturer that needs to be some assurance of return if they are to invest in making a new product. This is a principle that applies not just to vaccines but to all goods. Whether the 25% reservation for the private sector is sufficient incentive for them to produce wholly new products specifically for this segment of the population is unclear, but it seems unlikely to me because Indian manufacturers have so far focused on products that are used in India or outside in large-scale routine immunisation programs, with the main markets being UNICEF, Gavi Alliance and country governments with a much smaller volume to private markets. 

Lahariya: The thinking that market-based vaccine pricing will incentivise production in the middle of the pandemic is not very sound. If incentivising manufacturers is a short-term objective, then vaccine production is unlikely to increase as it is dependent upon multiple ‘rate limiting’ factors such as setting up manufacturing units, securing raw material, seeking approvals and other things. However, if increasing vaccine production was a long-term goal, then doing this in the middle of the pandemic is a wrong approach.

As the government is a co-developer of Covaxin and shares the IPR and gets royalty from sales, is it right to allow the companies to sell vaccines at a higher price to private hospitals?

Lahariya: The core of government-private sector partnership has to be an affordable product or service. A product which is sold at many times higher price in the private market than the price to the government puts both the government and manufacturers in a very bad light. If the government agrees for any such price set by the manufacturer, then the government should subsidise the cost of the vaccine for its people.

Will allocation of vaccines based on a few parameters including wastage lead to fudging of data or denial of vaccines in some cases to ensure reduced wastage? With several States under-reporting cases, will allotment based on disease burden negatively impact virus spread? 

Kang: It is a truism in public health that we need to accurately measure what matters in order to decide what action needs to be taken. If measurement is inaccurate or deliberately misreported then we have a problem of allocation becoming inappropriate. There are several alternative ways of deciding on allocation, and perhaps the simplest is to do it on the basis of the eligible population. 

I think we need to be aware that the most important thing is to be vaccinating as quickly as possible. Allotment based on disease burden would require an approach that could saturate the most affected areas with vaccines to prevent further spread.

While July was the target date to vaccinate 300 million HCWs, FLWs, and those above 45 years, only 230 million have been vaccinated including those above 18 years. Can India vaccinate the entire population above 18 years by December this year as said in the Supreme Court?

Lahariya: When we say vaccinate the entire adult population, it should mean one thing only, and that is the person should be fully vaccinated (or should receive both shots). Therefore, the aim to vaccinate all Indian adults by December 2021 is simply unachievable. The logic is simple. Just to illustrate, if someone who receives the first shot of Covishield starting the second week of October 2021 will not be eligible for the second shot till early 2022. Similarly, anyone who gets the first shot of whichever vaccine in early December 2021 will receive the second shot only in early 2022. Therefore, all of them cannot be counted fully vaccinated in 2021.We also need to factor in that at some point in the last quarter of 2021, India might start the vaccination of select population groups in 2-17 years of age, which would also slow down the adult vaccination. I believe a realistic best estimate of the adult population fully vaccinated by December 2021 is around 500 million Indians.

Published in The Hindu on June 12, 2021