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The Sputnik V vaccine will be priced at Rs 995 a dose said Dr Reddy’s Laboratories, which is importing and selling the vaccine in the domestic market. That works out to $13.4 a dose and is higher than the $10 a dose that was being speculated upon earlier when Sputnik V was given the green signal to be part of India’s vaccination programme.
But price may not be a barrier at a time when citizens are unable to find vaccination slots as demand has outrun meagre supplies. Also, once domestic supplies of the Russian vaccine pick up, the price is expected to decline. Even then, whether even this initial price will be accepted by the various procuring entities such as the centre, states and private organisations remains to be seen. They would try and bargain the price lower, depending on the scale of their orders.
One shot at improving the supply situation for those looking for their first injection dose is the extension of the Covishield dosing interval to 12-16 weeks from the earlier interval of 6-8 weeks. This will take the pressure off those who have taken their first dose from looking for a second dose and will allow those who are eligible but have not got their first dose to get it.
The extension gives the vaccination programme a break. Vaccine supplies are expected to ramp up significantly only between August and December, which the government outlined in a presentation made yesterday. Thus, the current supply crunch will continue for some time even though some additions to capacity will see it improve from the current diminished run-rate (compared to April).
While an improvement is expected in the near term, to what extent it takes place remains to be seen. And the government has made a major prediction of 2.16 billion doses of vaccines becoming available, from different producers, between August and December. What is implied is that the supply problem will be taken care of and there will be enough to vaccinate a major part of the population by the end of calendar 2021.
These are predictions and whether the capacity really ramps up remains to be seen. Also, even earlier, the existing companies have worked with the confirmed orders they have in adding to capacity. Therefore, production will take place only if they have orders and advance payments giving them the confidence.
Then, there’s the matter of the government’s decision to take only 50percent of the capacity and leave the rest to state governments and private hospitals/companies to bid for. This was in response to complaints of inadequate supplies and a need to vaccinate the 18-44 age group. Now that there is enough capacity to vaccinate all age groups, will the centre take back the role it had partly surrendered? This can give more visibility on the procurement front if the country procures as one, even as the distribution can be decentralized and even the pricing can vary depending whether it’s state-managed or privately administered.
What investors should make of all this is the question our research team has attempted to answer in a two-part series on acquiring herd immunity. In Herd Immunity Part 1: Why the markets are not feeling the pain of the second wave, the focus is on why markets are sanguine, what companies are saying about the risks from the second wave, lessons from other countries who have turned the corner in the fight against COVID-19 and on why immunity derived from vaccination is a key metric to keep an eye on.
And in Part 2: Is the race a sprint or a marathon?, the focus shifts to the developing outlook for vaccination and estimates on the number of new vaccines to be added in the coming months, the ramp-up of production and therefore, how much of India’s population would have acquired immunity by October-end. It looks at the challenges in the roll-out and what all of this means for investors. While it ends on a cautious note, there is that optimism that this too shall pass. Don’t miss reading it.
From the opinion team:
The billionaire boom: How the super-rich soaked up COVID cash (republished from the FT)
Summer of discontent: AC industry battles loss, back to back
Ready and willing, 5G market awaits Indian telcos
India’s solar power target needs an urgent review
Cadila’s animal health sale to fund its business transformation
The FMCG sector's main growth engine was rural India, but the second wave may cause turbulence
China’s population growth curve bends down, India holds the edge
More investing insights from the research team:
Happiest Minds – Can it run more after the stellar rally?
Jindal Steel and Power: Are most positives priced in?
Lupin: Focus on inhalation and bio-similars to aid margins in medium term
Pidilite Industries: Market share gains propel Q4 earnings
Technical picks: Larsen & Toubro, Maruti, Ajanta Pharma and Cipla (These are published every trading day before markets open and can be read on the app)
Ravi Ananthanarayanan
Moneycontrol Pro
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