27 JUN,2021 | MEDC
As per the latest policy, the Union government will buy 75% of vaccines, which are to be given free to state governments. The remaining 25% are to be purchased by private hospitals, at pre-determined prices, which varies between vaccines. This likely strikes a fair balance between the twin objectives of equity and efficiency. Providing three-quarters of all vaccines free addresses the equity issue. The remaining will find their way effectively through the market forces of supply and demand. Prices will currently be higher than they should be, and that will provide incentive for manufacturers and hospitals to scale capacity aggressively. That is precisely the action required to lower prices in future. There is also no dearth of Indians able and willing to pay market prices for the vaccines of their choice. As Winston Churchill aptly noted, India is a poor country full of rich people.
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