Some thoughts on vaccine pricing in India and the Union-State drama.

1. Union government should absorb the cost of the vaccine. It can easily afford it and recover it many times over in increased economic activity. States will struggle fiscally, especially poorer states. Union can and should absorb the cost.

2. Delivery and distribution should be decentralized and left to state and local governments and PRIs. Centralized vaccine allocation is very messy, once the Union pays for vaccines and allocates to states, states should distribute.

3. All vaccines procured by Union and distributed by the states should be completely free of charge. BUT it should not be the only allocation mechanism. A parallel market option should exist for those who can afford to buy at the price set by Serum Inst and Bharat Bio.

4. Stop quibbling over how much money Serum Institute is charging or what profit they will make. To increase capacity dramatically costs money. To attract supplies from the world over in the middle of a pandemic costs money. The alternative means delay, which is more costly.

5. Those who feel the at-cost price of Rs. 150 last August has unfairly jumped to Rs. 600 today do not understand supply curves.NOTE they are upward sloping. At higher price greater quantity will be forthcoming. Pay the higher price! The alternative is more costly.