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Thread.
A lot of useful discussions going on about pricing of vaccines. Some thoughts on this.
There are 2 issues here. The first, how much should the vaccine producers charge for the vaccines?
The second, how much should the citizens pay to get themselves vaccinated?
Thread.
A lot of useful discussions going on about pricing of vaccines. Some thoughts on this.
There are 2 issues here. The first, how much should the vaccine producers charge for the vaccines?
The second, how much should the citizens pay to get themselves vaccinated?
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It is important to address these two issues separately, rather than conflating them.
It is important to address these two issues separately, rather than conflating them.
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Let’s start with the second one, the amount we have to pay to get vaccinated.
Here, for the vast majority of our citizens, it makes complete sense to provide it for free, with the government (centre or state) picking up the tab.
Let’s start with the second one, the amount we have to pay to get vaccinated.
Here, for the vast majority of our citizens, it makes complete sense to provide it for free, with the government (centre or state) picking up the tab.
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This is justified by the poor income levels of most Indians, the massive impact that vaccination can have on controlling the pandemic, and the relatively low cost of such a policy for the government.
This is justified by the poor income levels of most Indians, the massive impact that vaccination can have on controlling the pandemic, and the relatively low cost of such a policy for the government.
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But shouldn’t those who can, pay for their vaccines?
I would argue that they should be allowed to pay, only if they want to.
For example if they want imported vaccines of want to get vaccinated from private players.
But shouldn’t those who can, pay for their vaccines?
I would argue that they should be allowed to pay, only if they want to.
For example if they want imported vaccines of want to get vaccinated from private players.
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However, everybody should be eligible to get vaccinated freely by the govt.
The reason is that the govt will not save a very significant amount of money by leaving out this small section of population.
In fact, it might be costly to determine who should or shouldn't get it.
However, everybody should be eligible to get vaccinated freely by the govt.
The reason is that the govt will not save a very significant amount of money by leaving out this small section of population.
In fact, it might be costly to determine who should or shouldn't get it.
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So the policy should be to provide free vaccination to anybody to wants it, leaving the option of paid vaccination to the individual.
So the policy should be to provide free vaccination to anybody to wants it, leaving the option of paid vaccination to the individual.
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Now we come to the first issue.
The optimal price that the producers should get depend on two factors, working in opposite directions.
If the price is too high, it will increase the fiscal burden on the governments, centre or state.
Now we come to the first issue.
The optimal price that the producers should get depend on two factors, working in opposite directions.
If the price is too high, it will increase the fiscal burden on the governments, centre or state.
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On the other hand, if the price is too low, it might disincentivize the producers.
But what should we be incentivizing the producers for?
On the other hand, if the price is too low, it might disincentivize the producers.
But what should we be incentivizing the producers for?
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One argument is that the producers took risk in initiating early production when the vaccines had not yet been certified.
This risk-taking needs to be rewarded so that they may be repeated in future, if necessary.
For eg, if mutations need new vaccines to be produced.
One argument is that the producers took risk in initiating early production when the vaccines had not yet been certified.
This risk-taking needs to be rewarded so that they may be repeated in future, if necessary.
For eg, if mutations need new vaccines to be produced.
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But there is another reason why we may need an incentive.
We do not know how long a double shot of vaccine will give us immunity.
This means we may need to plan for contingencies where the population needs to be vaccinated for a number of years.
But there is another reason why we may need an incentive.
We do not know how long a double shot of vaccine will give us immunity.
This means we may need to plan for contingencies where the population needs to be vaccinated for a number of years.
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This will need creating much more capacity.
It may be better to incentivize the creation of that capacity now than in another crisis down the line.
This will need creating much more capacity.
It may be better to incentivize the creation of that capacity now than in another crisis down the line.
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So while the prices paid to producers should not be too high, covering only normal profits may not be optimal either.
What is important is that there should be complete transparency in these calculations.
So while the prices paid to producers should not be too high, covering only normal profits may not be optimal either.
What is important is that there should be complete transparency in these calculations.
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For a product as politically sensitive as the vaccines, it is important that the producers make these cost and profit breakups public knowledge.
This will minimize unnecessary speculation and provide credibility to the vaccination process.
End.
For a product as politically sensitive as the vaccines, it is important that the producers make these cost and profit breakups public knowledge.
This will minimize unnecessary speculation and provide credibility to the vaccination process.
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