Centralize vaccine purchases to minimize costs: EY India
“ Allow States to prioritize areas and ages of vaccination in their jurisdiction ”
India’s vaccination bill can be minimized by following a fully centralized purchasing model that would lower prices rather than states making purchases alone, EY India said in a report on Thursday, calling for an urgent overhaul of “ the current ad hoc and non-transparent vaccination distribution strategy ”.
If the country maintained the vaccination rate of 2.31 million doses per day recorded in March and April, with the current interstate distribution pattern, it would end in dire straits, the report noted, adding that the pace of vaccinations had already fallen further in May. .
“At the level of the whole of India, it would take 748 days to achieve full coverage of the population aged 18 and over (eligible population). But, in terms of coverage of individual states, some states would need far too many days. For example, Uttar Pradesh may require 1,553 days, while Bihar may require 1,351 days and Tamil Nadu may require 1,217 days, ”the report said.
Emphasizing that the Center has a key role in ensuring immunization coverage nationwide, the report by EY India Chief Policy Advisor DK Srivastava, who was also a member of the Advisory Board of the 15th Commission of finance, said in the Union budget for immunization is intended to be transferred to the States.
“If the Center were to become the only government agency to procure vaccines, the average price per vaccine would be much lower than if individual states were to engage in floating global tenders. To vaccinate the total population of India aged 12 and over at 108.5 crore, the total doses required would be 217 crore considering two doses per person, ”the report explained, adding that a single agency purchase would be able to achieve economies of scale and negotiate more. Power.
“At an average price of ₹ 300 per dose, the total cost of the vaccination would be ₹ 65,108 crore. If state participation pushes the average price up to ₹ 500 per dose, the country’s total vaccination bill would needlessly increase to ₹ lakh 1.09 crore. This increase in costs, which can be higher if the average price of vaccines increases even more, is clearly avoidable in addition to avoiding the confusion resulting from the involvement of States in the purchase and implementation of vaccines ”, underlined Mr. Srivastava.
Vaccination and extended lockdowns are the only two policy instruments available to control the pandemic, and vaccination would be essential to help minimize the economic costs of lockdowns, which are gradually spreading in terms of duration and area coverage. geographic, he said. .
“There is clearly a trade-off between the duration and spread of lockdowns on the one hand and the erosion of growth on the other. The more extensive the lockdowns, the greater the loss of GDP growth will be, ”Srivastava said, adding that estimates of government non-tax revenue and non-tax revenue for the year are heavily dependent on monetization and government plans. divestment of assets which appear “ extremely difficult to achieve ”.
Estimating a deficit of 2.3 lakh in the Centre’s overall revenues, Srivastava said the budget deficit could fall to 7.9% of GDP for the year from the budgeted figure of 6.8%, but said stressed that the government should not cut spending at this stage.
“… Spending should be strongly redefined in favor of increased health spending and health infrastructure. The Centre’s capital expenditure allowance for the Department of Health and Family Welfare was quite low at 2,508.7 crore for FY22. This needs to be improved considerably. Strengthening hospital capacity perhaps at every district headquarters would not only cover the current shortage of hospital beds, but also increase construction activity and absorb much of the currently unemployed migrant workforce ” Mr Srivastava said in the report.
“There should only be two vaccine distribution channels, namely government and private. There should be no distinction between central government and state government and prices should be uniform. State governments may be allowed to prioritize areas / ages for vaccination within their jurisdiction, ”suggests the report.