Several Chief Ministers have urged the Union Government to change the allocation strategy and to increase allocation to state governments.

A health workers hold up vials of COVID-19 vaccinesRepresentative Image: PTI
news COVID-19 Vaccine Thursday, July 22, 2021 - 12:50

This story is a part of the TNM COVID-19 reporting project. To support this project, make a payment here

Although nearly 35 lakh COVID-19 vaccine doses were allotted to private hospitals in Andhra Pradesh since the beginning of May 2021, only a meagre 4.63 lakh doses of the vaccines have been bought by people. And this is not a new trend. On June 28, Andhra Pradesh Chief Minister Jagan Mohan Reddy wrote to Prime Minister Narendra Modi, highlighting how private hospitals in the state were not able to fully use the vaccines allotted to them. At that time, though 17.7 lakh doses were earmarked for private hospitals for July 2021, only 2,6 lakh people were vaccinated at private hospitals in Andhra Pradesh. 

“The past experience and the demand for vaccines at private hospitals in Andhra Pradesh clearly indicate that such huge quantities of vaccine cannot be utilised by the private hospitals,” wrote Jagan, urging the Union government to procure and supply the unused vials to government centres, which were falling short of COVID-19 vaccines.  

Other state governments, too, have made similar requests. On June 28, Tamil Nadu Chief Minister MK Stalin wrote to the Union government, urging them to reduce the allocation of vaccines to private hospitals from 25% to 10%. Naveen Patnaik, the Chief Minister of Odisha, met PM Modi and Home Minister Amit Shah on July 19, asking them to reduce the allocation of vaccines to private hospitals from the existing 25% to 5%. He pointed out that it could increase the pace of vaccination in the state.

As per the current ‘universalisation’ vaccination policy adopted by India, which was revised and put into effect on June 21 this year, 25% of the vaccines manufactured in India is allocated to private hospitals. The remaining 75% will be procured by the Union government and freely distributed to states. Under the previous ‘liberalised’ vaccination policy (effective from May 1), too, private hospitals and industrial establishments (through their hospitals) were permitted to procure 25% of the vaccines manufactured in the country. However, it had also required state governments to directly procure 25% of the vaccines from the manufacturers. 

This eventually culminated in a massive vaccine shortage in government centres and underutilisation in private sectors. As per the statement by the Press Information Bureau (PIB) on July 19, more than 2.6 crore vaccine doses remain unutilised in states, union territories and private hospitals in the country.

COVID-19 vaccine prices are a primary concern

The underutilisation could be attributed to the price factor to some extent. While government centres are administering vaccines free of cost, private hospitals are charging per dose, with a cap announced by the Union government. Private vaccine centres can charge upto Rs 780 (Covishield), Rs 1,410 (Covaxin) and Rs 1,145 (Sputnik), with Rs 150 as the maximum service charge. 

“Basically, the Union government has reserved 25% of the vaccines in private hospitals for the rich,” professor R Ramakumar, an economist and professor at Tata Institute of Social Sciences (TISS), told TNM. “Covaxin, for example, can work up to around Rs 1,380, including tax and service charges. For two doses, the expense that people will have to incur is around Rs 2,700. This is half the monthly income of many people. So, the poor have been excluded by design from this programme,” he said. 

Ramakumar also noted that it is possible that private hospitals are no more interested in administering the COVID-19 vaccine. “The services charges are now capped unlike before when they could charge as much as they want (during the ‘liberalised’ vaccination policy). So the profit they can make is marginal. So, this could be a reason that the private hospitals are also not too keen on administering COVID-19 vaccines,” he said. 

Dr Arja Srikanth, COVID-19 nodal officer for Andhra Pradesh, concurred. “Andhra Pradesh is administering COVID-19 vaccines through 1,600 centres across the state. Besides, village volunteers, ward volunteers and ASHA workers help in streamlining the vaccination process by mobilising the beneficiaries to the government vaccination centres. When such a system is in place at a ward level, who will choose to get vaccinated by paying around Rs 1,000? A family of four or five will have to spend Rs 5,000, which is a costly affair. Only the rich can afford this,” he told TNM.

Lack of publicity of vaccine availability 

Dr TV Ramana Murthy, President of Andhra Pradesh Private Hospitals and Nursing Homes Association (APNA) - Krishna district unit, disagreed that private hospitals are reluctant to administer vaccines due to the reduced margins or the price factor. “Lack of publicity is the main reason,” he noted.    

“When the vaccination drive for people above 60 years started, the private hospitals were allowed to vaccinate the public for a few days. Then, the Union government suddenly stopped supplying to private hospitals for a few days. The public is not aware if vaccinations are available with the private hospitals and hence the vaccines were lying idle,” he said.

“If there is publicity that private hospitals are administering vaccines, then many people will come forward as there are many who are still ready to get it irrespective of the cost. A proper awareness on the availability in the private sector can help vaccinate many more in the state,” said Dr Murthy, adding that some are usually hesitant to go to government hospitals to take the vaccine.

Reallocation is necessary

According to Dr Arja Srikanth, the demand for vaccines from private hospitals has drastically reduced as beneficiaries from the upper-middle class and rich communities, or those who can afford to pay, have already managed to get vaccinated from the private hospitals. Those who are yet to be vaccinated want to get the vaccine from government centres as it is free, he added.

So, since people are not going to private hospitals, let the unutilised stock be allocated to the government as we will be able to cover more number of people,” said Dr Arja. 

Dr Murthy from ANHA said that if the public is not made aware of the vaccine availability in private hospitals, it is better to take back the vaccines and redistribute them through government channels.

Change in allocation strategy needed

With the Chief Ministers asking for a reallocation and private hospitals saying their vaccines are not being used to their full potential due to lack of awareness, what exactly is the way forward?

According to TISS professor Ramakumar, 100% state procurement is the way forward. “The Union government should procure 100% of the vaccine and then allot it to the states as per their formula and as per the requirement. The states should be given the autonomy to decide if they want to use private hospitals for the distribution and if so, how much they want to allot to them they should take a call,” he explained. 

This story is a part of the TNM COVID-19 reporting project. To support this project, make a payment here

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