Differential pricing for vaccines ‘inherently unfair’: TN CM writes to PM Modi

Kerala Chief Minister Pinarayi had also flagged the issue and said that the Union govt’s COVID-19 vaccine policy places a huge financial burden on states.
Edappadi K Palaniswami
Edappadi K Palaniswami
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Tamil Nadu Chief Minister Edappadi K Palaniswami, on April 26, called the differential pricing for vaccines for the Union and state governments ‘inherently unfair’. In a letter written to Prime Minister Narendra Modi, Palaniswami urged the Union government to procure and supply the entire quantity of vaccines required to vaccinate all groups including those in the age group of 18-45 years.

In the letter, Palaniswami pointed out that the new policy announced by the Union government amid the pandemic stated that the state governments must purchase vaccines from the manufacturers at predetermined prices. Adding that these prices are different from the prices at which the Union government is procuring vaccines, the Chief Minister said that some manufacturers have already announced a higher, increased rate for procurement of vaccines by the state governments.

“Such a differential price mechanism is inherently unfair since it places a higher financial burden on States. It is also iniquitous since the State Governments have considerably less fiscal resources at their command than the Central Government,” he wrote. He added that the state governments have a reasonable and valid expectation that the Union government would supply COVID-19 vaccine for phase three of the vaccine programme, since a budgetary provision of Rs 35,000 crore has been made in the estimates for the year 2021-22.

Requesting the Union government to directly procure the entire quantity and distribute it to the state governments, Palaniswami also suggested that the Union government explore alternate sources of vaccine supply like imports in order to achieve the goal of vaccination smoothly in the future. 

The Union government, a few days ago, released a new policy on vaccine procurement by which manufacturers shall supply 50% of their stock to the Union government at a predetermined price and the remaining 50% can be procured directly by the state governments and the private hospitals across the country. The Union government also allowed the vaccine manufacturers to declare the prices of the vaccines for state governments and private hospitals beforehand. Based on the declarations, Serum Institute of India (SII), which manufactures Covishield, has priced its vaccine at Rs 400 per dose to the state governments and Rs 600 per dose to the private hospitals. While the Union government gets the vaccine for Rs 150 per dose as per their current agreement with SII. Bharat Biotech, which has developed Covaxin based on the strain isolated by the publicly-funded National Institute of Virology, has priced its vaccines at Rs 600 per dose for state governments and Rs 1200 per dose for private hospitals. And the price per dose of Covaxin for the Union Government is Rs 150.

A few days ago, Kerala Chief Minister Pinarayi Vijayan also raised the issue, citing the additional financial burden that the decentralised procurement of vaccines would place on state governments. He flagged the issue at the Chief Ministers' meeting chaired by the Prime Minister on Friday. After the meeting, he told the media, “This is not a desirable situation during a pandemic. We cannot accept the policy that those who have money purchase the vaccine. Vaccination has been free and universal in India and the state government intends to move forward with that policy. We will keep our word given to the people."

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