Rs 80,000 crore: Estimate cost Govt has to bear to provide free COVID vaccine

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Research on vaccines for Covid-19 has reached Phase 3 trail (that is, testing an experimental drug in human). Although the private companies developing the vaccines are getting public grants, the price of vaccines are likely to vary between $3 (with a price cap) to $30 a dose, depending on the drug manufacturers. AstraZeneca, for instance, in a deal with the Euro Commission has agreed to sell vaccines between $3 and $4, a dose. Moderna is promising a delivery with a price tag of $37, per piece.

Sinovac, the Chinese vaccine maker, is selling vaccines for its emergency program in select cities in China at $60 for two shots of vaccine. The vaccine, jointly developed by Sanofi and GlaxoSmithKline, comes with a price tag of $10, a piece. Ergo, for the Indian consumers, the first best option is to go for the vaccine developed by the Pune-based Serum Institute of India (SII), with a price cap of $3 per dose. Under circumstances, when imports become necessary, the price will be on the higher side.

Assuming India’s population size of 1.3 billion, this means the government needs to shell out $3.9 billion or around INR 30,000 crore Indian rupees to foot the bill for the vaccine. Then there is distribution, transportations and logistics costs for delivering the vaccines. For medicines, this cost amounts to 10-14%. However, for vaccines, as it requires transporting and storing in refrigerated containers, this cost will increase further. Therefore, there is a merit when SII is asking for INR 80,000 crore from the government.

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