Dude, Where is My Vaccine?

While there are many critics of the government’s vaccine strategy, over 75% of 18+ indians could be vaccinated by october ‘21

- Dr. SRIVATSA KRISHNA

It is sad to see commentators write about things they are clueless about – which is much like YoYo Honey Singh trying to teach M.S. Subbulakshmi how to sing Venkateshwara Subrabatham. Vaccination is one such thing where people with kindergarten knowledge are preaching the treatise! Vaccinating a billion people is a tough challenge and India with its EVin (Electronic Vaccine Intelligence Network) has the basic infrastructure in place to do it, yet we are stumbling. Not because of the absence of good intent or good policy design by the Government of India (GoI), but due to politics and its sad consequences.

First, a monopsonist, or a sole buyer, can easily aggregate demand and drive down vaccine prices. Market power in product markets exists when firms have the ability to set prices they charge, within limits of the demand curve for their products. If 30 state governments are allowed to buy, then it will lead to interstate competition and drive prices up for everyone. So, the initial policy of GoI to centrally procure vaccines and allocate it to states was the correct policy response (did someone say government’s don’t follow “evidence-based policy” design?)

Second, the supply of vaccines in India is limited and we get about 60-70 million doses a month, even though Serum Institute of India (SII) claimed they would make about 100 million doses a month by early 2021. As such the supply curve of Covid vaccines is inelastic in the short to medium term. This is the nature of the beast and cannot be improved overnight. To quote one of my intellectual role models Warren Buffet “No matter how great the talent or efforts, some things just take time. You can't produce a baby in one month by getting nine women pregnant.”