The Centre seems to be in total denial about vaccine shortages in the country, and is blaming the states for mismanaging available stocks. The fact is the Centre, as monopoly buyer and supplier of all vaccines, failed to anticipate higher vaccination demand for the 45-plus age group.
Simple math explains the problem at hand. The total production capacity of the manufacturers of Covishield and Covaxin, the two local players, is roughly 24 lakh vaccines a day. The current demand is 37 lakh vaccines a day. The daily shortage is already huge and is probably getting concealed by some past inventory stocks of Covishield. The gap will become more acute in the weeks ahead because production capacity increase will take time, even if it is already underway.
In March, demand didn’t exceed supply because there was some vaccine hesitancy and new infection rates were under control. But the demand has suddenly spiked since April 1, due to the second surge in infections as well as the age threshold for vaccination being reduced to 45 plus. By now, production capacity increase should have already happened. The Centre clearly planned it very badly.
After vaccine inventories exhaust, the demand-supply gap on a daily basis could touch 15 to 20 lakh vaccines a day. There is an urgent need for ramping up of production capacity.
With such a growing gap between the demand and supply of vaccines, it was a bit surreal for Prime Minister Narendra Modi to talk of a “festival of vaccination” in his video conference with the chief ministers on Thursday.
Ironically, most states have just two or three days of vaccine supplies left. Maharashtra is in the eye of the storm for political reasons, but other states like Odisha, Chhattisgarh, Telangana and Andhra Pradesh have also reported vaccine shortages. Sangeeta Reddy, co-owner of the Apollo Hospital group, told NDTV that there is a vaccine shortage at the district level in Andhra Pradesh and Telangana.
T.S. Singh Deo, health minister of Chhattisgarh, hit the nail on the head when he said if states get fewer vaccines than they can administer, going by overall demand, then it should be deemed a shortage. There are serpentine queues in hospitals and other designated medical centres in Tier 2 and 3 cities, where the virus is spreading much more this time. There may be a need to scale up of daily supply of vaccines by over 50%. So each state might require a 50% increase in its quota by end April. This demand could grow further as experts say the current cycle is likely persist until mid May.
The all-important question is whether the existing production capacity of just two manufacturers can meet the growing demand in the next few weeks. Modi’s invocation of a “festival of vaccinations” really depends on how fast the production of Covishield by the Serum Institute of India and Covaxin by Bharat Biotech can be scaled up from present levels.
At present, Covishield constitutes over 90% of the vaccine supply. The Serum Institute has the capacity to produce 60 million doses a month and its promoter, Adar Poonawala, has been seeking bridge finance from the government to enhance capacity to produce 100 million doses to meet the growing demand. At present, the Serum Institute cannot meet even its current export commitment of over 60 million doses.
Bharat Biotech, which makes Covaxin, has much smaller capacity, probably less than 10 million doses a month. Like the Serum Institute, Bharat Biotech had also asked for capital support from the government to ramp up capacity in February. Predictably, the babus have been slow to respond to the need for additional capital.
The truth is that the Centre has been very slow in anticipating the need for capacity expansion to deal with a second surge of infections, which would require a much higher level of vaccination. This problem has occurred largely because a bunch of bureaucrats at the Centre have been put in charge of decision-making on production and distribution capacity across the country. On the one hand, Modi argues that bureaucrats should not run businesses, and on the other, he totally centralises the business of procuring and distributing vaccines.
Since the government is the sole buyer, it influences decisions on capacity expansion. If this had been left to the private sector, with the government just setting a price and subsidising the poor, things would have been very different.
Why the Modi government is so insistent on centralising procurement is inexplicable. And when things go wrong, it blames the distribution problems on the states. Union minister Prakash Javadekar said the Centre only procures the vaccines and distribution at the district level is the responsibility of the states. He is specially taking a dig at opposition-ruled states. So, would Javadekar please explain the failure of BJP-run states like Uttar Pradesh and Madhya Pradesh where the shortages are as much even if their chief ministers are quiet about it. The Centre must stop this blame game and accept primary responsibility.
The basic approach of the government is flawed. Governments, whether at the Centre or in the states, can never be efficient procurers and distributors, especially when capacity is virtually licensed, because the Centre is a monopoly buyer. This is exactly like the good old license raj. Only competition among vaccine makers and decentralised private distribution, with multiple players including Pfizer, Johnson & Johnson and Sputnik, could create the dynamics for smooth supply and prevent the current political football being played between the Centre and states.
The larger blame for this suboptimal system must lie at the prime minister’s door. It is hypocritical on his part to talk about a vaccine festival when there is a shortage of capacity and an absence of more vaccine players in the market, due to bad government policy. Pfizer had applied for a licence last December. It withdrew its application when tedious questions were raised by bureaucrats. Similarly, Sputnik V and Johnson & Johnson are writing for clearance from the authorities to start distributing. Questions which were ignored before allowing Covaxin and Covishield to start distribution are being raised with the other equally credible players wanting to enter the market. If sarkari babus think they can run the vaccine production and distribution business, then we are doomed. We cannot afford this because lives and livelihoods are at stake. The damage bureaucrats do will take years to be undone.
It is time Modi takes some important decisions to undo the damage done so far. After the lockdown last year, Modi showed hyper optimism by suggesting how the great Mahabharata war was won in 18 days! That is history. Now, if we can’t win this battle with all the vaccines available in the market, the government will have no one but itself to blame.