Issue 9

Evaluating the Implications of Privatization in India’s COVID-19 Inoculation Drive

Anjana Ramesh

India’s vaccination drive has witnessed considerable private sector involvement – from the development of vaccine candidates, to their mass-production. The recent announcement confirming the allowance of private distribution of vaccines has furthered this involvement. What implications does privatization of inoculation drives hold for India and its public healthcare capabilities?

Though India’s vaccination drive began in mid-January, the distribution of vaccines among target populations has effectively been slower than anticipated. Contemplating the introduction of the private sector in vaccination distributions turned into concrete action in late February, with a formal announcement that private hospitals would be allowed to administer the vaccines at the price of Rs. 250. The introduction of private players in the mammoth task of inoculating the Indian population has gathered advocates as well as critics. How will privatizing vaccine distribution affect the healthcare sector – and what precedent does this move set for the future of medical programs in the country?

Privatization of vaccine distribution provides several solutions to the government’s woes at the surface. The production and distribution of vaccines can scale up monumentally faster in the presence of privatising channels. This move also brings about immense benefits by its way of immediately reducing the sole burden of vaccine distribution on governmental bodies as well as the healthcare sector. This can compensate for shortages faced in public healthcare and provide a relatively lower overall cost of vaccination to citizens since the vaccine is now being mass produced. 

However, it is important to evaluate how privatization can adversely affect the long term growth and function of the public healthcare sector in India. Firstly, opening up private channels for vaccine distribution creates an opportunity for frivolous vaccine candidates to gain entry into the market, partake in false advertisement and compromise public trust in vaccine science. This can lead to the persistence of the burden of risk and pressure in the healthcare sector, completely negating the positive effects of vaccination drives. Secondly, it is crucial to note that with the private sector involved, the market is essentially what is determining the production and distribution of vaccines. For instance, Adar Poonawala had stated last year that the Serum Institute of India will be shifting resources from the production of other vaccines to free up capacity for the production of a COVID-19 vaccine. This can lead to a coexistence of shortages of high demand essential vaccines and a glut of low demand new vaccines in circulation. In essence, by large scale privatisation of vaccine distribution, the government will be surrendering a crucial public health responsibility to a capitalist market where companies are competing for larger market shares and higher profits possibly at the expense of public health priorities. 

Though the government has pushed for ‘Atmanirbharta’ or self-reliance to enable Indian firms to become major global players, there should also be a more careful consideration of self reliance in the public sector. India must begin addressing the shortages that plague the country’s public healthcare system and revitalise the capabilities of the public sector in vaccine production and vaccine technology. 80% of the Indian government’s vaccination needs are met by private firms in India and abroad. This has increased the prices by up to 250% as compared to the public sector, pushing India’s vaccination budget up 7 times in just 5 years. Moreover, the government also must be cognizant of the notion that the privatization of vaccines propagates.

While larger accessibility and reach has been cited as a popular reason to support private vaccine distribution, ideally public health systems should be meeting these standards themselves. Though the vaccine is being offered at a relatively low price, it must be questioned as to why it is not being administered by the government at a nominal rate that suits the interests of all sections of society. These questions call for a critique of public health systems in India, and demand an evaluation pertaining to how they can be improved. 

Moreover, the push for privatizing vaccine distribution must be carefully analyzed in terms of how it fits into the larger picture of vaccine development and distribution. Given that the coronavirus has mutated repeatedly already,  R&D units and vaccine production and distribution agencies are critically attached to one another. R&D facilities must continuously identify new strains and develop updated vaccines for them, and vaccine production and distribution must follow through. In a situation where private players are allowed to develop vaccines, as well as produce and distribute them, several questionable effects can emerge. 

Firstly, private sector activities are also often dictated by the aims of conserving patents and intellectual property rights along with profit making. This could affect how private firms choose to invest in R&D, as well as cherry picking between vaccine candidates. Secondly, in a situation where there is a possibility that established vaccines may become ineffective due to mutating strains, the incentives for private distributions cannot be predicted. The cause of private interest in vaccine production and distribution is profit-driven. How these firms react in response to mutating strains will depend on the value of the product in question – the vaccine. While the government can pay these firms for their services in case of any losses, it will represent a government expenditure that could have been avoided.

Moreover, since the vaccine would become a product under a private distribution set-up, it is also important to consider how private companies will react to any misinformation about viable vaccine candidates – and whether such events would affect their distribution among the masses. Instances of widespread misinformation pertaining to vaccine candidates’ safety in the face of reliable scientific evidence could provide private firms with enough reason to reduce or cease their distribution in the face of public mistrust. Navigating such situations will be complicated – with public health interests bearing the brunt of it all. Such gaps will be less likely to emerge in a system where the government will be involved at each step. 

While privatisation of vaccine production and distribution might help curb the spread of the virus, increase reach of vaccination drives and lessen the heavy burden on the healthcare system in the short run, it is crucial in the long run to empower the public sector for it to become cost effective and dependable. The bid for privatizing vaccinations needs to be approached with care – by the government, as well as the private companies involved in the same, for any misstep could have grave consequences for the future of medical treatments and private interventions in India.

Anjana Ramesh is an Economics and Finance student at Ashoka University.

We publish all articles under a Creative Commons Attribution-Noderivatives license. This means any news organisation, blog, website, newspaper or newsletter can republish our pieces for free, provided they attribute the original source (OpenAxis).

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