A twitter thread
Subject: #India's #Covid vaccination strategy
The details of the latest policy changes are in this press release: https://www.pib.gov.in/PressReleasePage.aspx?PRID=1712710 from @MoHFW_INDIA
Let's ignore for a minute the repeated hagiographic references to #PMModi (see pic).

Presumably, this new policy was thrashed out at NEGVAC. If you have not heard about NEGVAC, then you have not been paying attention to my tweets. NEGVAC is National Expert Group on Vaccine Administration for COVID-19 and we first heard about it was here: https://www.pib.gov.in/PressReleasePage.aspx?PRID=1694439

Ignore the fact that this is as opaque and shadowy a body as it gets considering that it will be taking decisions that will affect every Indian citizen. Focus on the new vaccine policy. It is "a Liberalised and Accelerated Phase 3 Strategy of Covid-19 Vaccination from 1st May"

Here are rthe headlines in screen shots: Note how no opportunity is lost to plug "Worlds largest vaccination programme"

Here is the next bit of the headlines:

And finally,

Now I havent seen any good economic analysis of the potential problems with this strange pricing and procurement policy, much less how this fits in with the relative buying power of Centre v the States. and how its gels with the population age structure.

Start with the age cut off of 45. lets assume that nobody under 18 will get the vaccine (its not licensed and trials are still under way). Some this like 55% of India is 19 and over = 715 million Indians. Lets break this down further into
<45 = 66% of 715m = 470m
>45 = 245m

Check my figures, please. In approx numbers (give or take some inconsequential error) I make it:
245m aged 45 and over;
470m aged 44 and under.
Double those numbers to get the vaccine doses needed
45+: 490m doses (= 0.5 Billion)
<44: 940 m doses. (= 1 billion)

Now acc to this new policy, the Centre will get the first 50% of vaccine prod at a price to be negotiated with the manufacturers hopefully taking into account grants and cash injections already made
3000 Cr to @SerumInstIndia
1500 Cr to @BharatBiotech https://www.reuters.com/world/india/india-fund-capacity-boost-serum-institute-vaccines-run-short-source-2021-04-19/

Lets assume the need for vaccines (total 1.5 billion doses) is fully met. The centre will get 0.5 billion doses at this negotiated price. The remainder 1 billion doses will be bought by State Govts at an 'Open Market price' that manufacturers will announce before 1 May.

Unless you believe that State Govts have a magic money tree, this is as crazy a policy as it gets. depending on how the Centre's price negotiations go. there would be every incentive for vaccine makers to do a sweetheart deal with the Centre and jack up the price for the others.

Of course it is not only State Govts that will be able to buy vaccines in the open market. Private Hospitals and big companies can do so too. Maybe the richest 0.1% of Indians would be willing to pay a premium price.

This cuts across every known best practice of pharmaceutical price negotiations. Of course vaccine manufacturers need to make a fair return and Cos like @SerumInstIndia have taken huge risk that need to be rewarded. But allowing cross-subsidisation is daft.

I can understand Public v private purchasers oof vaccines. But surely the Central Govts and var State Govts are part of the same Public sector. Why should States pay more than the Centre? Would not a central procurement be the most sensible way forward?

Who are the 5 State Representatives on NEGVAC? Why don't we know who they are and which States they are drawn from? And finally given the parlous state of State Govts' finances are they being set up to fail?