Editorial Notes

[Editorial Notes] Way to vaccinate India- COVID-19

As COVID cases rise with increasing economic activity, the only way forward for India is to formulate a sensible acquisition and pricing policy for a coronavirus vaccine, when it becomes available.
By IASToppers
September 17, 2020


  • Introduction
  • What are the Vaccination and Vaccines?
  • How can be India vaccinated?
  • An opportunity for Indian Economy
  • Problems regarding vaccine
  • The Way forward
  • Conclusion

Way to vaccinate India- COVID-19

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A sensible investment by the government will be worth every rupee in jumpstarting economic activity and helping the poorest Indians who have suffered acutely in this crisis. India must resist the temptation to give in to the outrage of doctors, social workers, politicians and journalists, who all have important roles to perform in the pandemic but could botch up vaccine delivery because of a misunderstanding of market processes and the price mechanism.

What are the Vaccination and Vaccines?

  • Vaccination is the administration of a vaccine to help the immune system develop protection from a disease. 
  • Vaccines contain a microorganism or virus in a weakened, live or killed state, or proteins or toxins from the organism.

How can be India vaccinated?

  • The only way to achieve it is to rely on and work with the private sector to acquire and allocate the vaccine across India, and shun price and quantity controls.
  • Vaccines for the poor should be paid for by the government and a free market for the vaccine should operate for those who can afford it.
  • The government is already working with pharmaceutical companies like Serum Institute of India. Ideally, it must acquire about 500 million doses in the first year and ensure delivery to the poor.
  • There are many delivery strategies– reimbursing the poor for getting vaccinated, reimbursing private vendors for each patient administered, setting up a government-provisioned free vaccination drive, etc.

An opportunity for Indian Economy:

  • Where the chance of vaccine development, production and availability for the poor is low, the pandemic has created a very large market for the vaccine, and the incentives of vaccine developers are well-aligned with society at large.
  • Indian manufacturers, frontrunners at mass producing vaccines, have struck deals with most vaccine developers and global pharmaceutical companies. This places India in a unique position to get early access to a vaccine
  • Currently, Indian vaccine companies can produce at a scale that brings costs down to ₹150-225 per dose; 500 million doses would cost the government just over ₹110 billion to acquire at cost.
  • If the rich get vaccinated first by buying it at a market price, their actions will have two effects:
  • They are more likely to venture out and spend, helping the economy.
  • While doing so, they are less likely to transmit the disease. They are also less likely to burden the medical system.

Problems regarding vaccine:

  • The private testing market was crippled by slow approvals and court-mandated pricing. This must not happen with a vaccine.
  • The rich, civil society and vaccine producers could consider special pricing strategies—for every person buying well above cost, firms will give one free to the poor.
  • Leaving gaps in the delivery of the vaccine will only serve to allow the virus to survive, and continue to wreak further damage.
  • The World Health Organization (WHO) has y indicated that immunisation services are disrupted in India.

The Way forward:

  • The government must resist India’s past impulses of nationalizing private firms, or imposing price and quantity controls, or strong-arming manufacturers on pricing.
  • The government must pay for vaccine doses at cost, the only way to ensure India doesn’t destroy its own long-term private vaccine production capacity. 
  • Getting the pricing and quantities right with the private sector is crucial, and paying private firms for doses will not only pay for itself and more in increased economic activity, but also help develop India as a pharmaceutical hub.
  • The government should allow a completely free market for vaccines that it doesn’t reimburse or acquire.  Even if doses are priced well above cost, courts and governments should not worry about the rich getting the vaccine first in the market.
  • When individuals get vaccinated against a disease, it reduces or eliminates their chances of getting it. Plus, it also reduces the chances of others getting the disease, as the recipient is less likely to transmit it. So, the social value of a single dose of vaccine is higher than the private value of that dose. 


India must formulate a policy that ensures the fastest delivery of a vaccine for the largest number of people. Given that a vaccine is well on its way, its acquisition and allocation should be based on an economic way of thinking. India needs to have strong mechanisms that enable informed decision-making about immunization priorities.

Mains 2020

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