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Government’s free vaccination drive kills market for private hospitals, 25% allocation largely unutilised

With the wider availability of vaccines, people prefer to get their jabs at government centres rather than pay for shots at private hospitals.

September 25, 2021 / 07:53 AM IST
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Private hospitals that were expected to play a major role in India’s Covid-19 inoculation drive are finding few takers, forcing many of them to return unused vaccines to state governments. Others are offering discounts or waiving service charges to clear their stocks and cut losses.

“Many (hospitals) have burnt their fingers by taking large stocks of Covid-19 vaccines,” said Dr Alok Roy, chairman of Kolkata-based Medica Superspecialty Hospital. Roy is also chair of the FICCI Health Services Committee.

Roy blamed the poor response on high vaccine prices set by the government. To clear out its vaccine inventory, Roy said his hospital is offering a 20 percent discount.

“People are not willing to pay for the Covid-19 vaccination as they are getting it for free at government vaccination centres. They are willing to wait,” Roy said.

The government allowed manufacturers to set higher prices for vaccines purchased by private entities. The maximum price for Covaxin and Covishield was fixed at Rs 1,410 and Rs 780 per dose, respectively, including Rs 150 as administration fee. Two doses each of Covaxin and Covishield are needed for full vaccination.

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COVID-19 Vaccine

Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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Fortis Healthcare, one of India’s largest private hospital chains, said fewer people are accessing its vaccination centres.

“With increased availability of free vaccinations through the government, demand has significantly reduced since July,” said Anil Vinayak, group chief operating officer. He said Fortis will continue to vaccinate citizens at its hospitals.

Another hospital executive who didn’t want to be identified said payments are not being made on time for vaccine stocks that were returned.

“If we keep it (stock), it will expire, so we decided to return it to the government,” the executive said.

India had administered 840 million doses of Covid-19 vaccines as of September 24. The private sector accounted for only 6 percent of the doses administered from May 1 to September 22, health secretary Rajesh Bhushan said.

Since July, the Central government has been procuring and supplying 75 percent of the vaccines produced in the country to the states and Union Territories. The private sector can buy the remaining 25 percent.

The government now says there is no earmarked quota for the private sector.

“There is an indicative percentage of what the government would procure and what would be available for the private sector to procure,” Bhushan said at a recent media briefing.

This, in effect, means that if the private sector is unable to procure or utilise the earmarked percentage, then the government will procure that quota because whatever is produced in the country must be utilised, he said.

“If the government allows us to give booster shots to healthcare workers and people above 60 years of age whose antibodies are waning, we can see some demand,” Roy said.
Viswanath Pilla is a business journalist with 14 years of reporting experience. Based in Mumbai, Pilla covers pharma, healthcare and infrastructure sectors for Moneycontrol.
first published: Sep 24, 2021 08:15 pm

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