As The Race Continues To Find A COVID Vaccine, The Question Is, Who Will Pay For It?

After months of social distancing, a vaccine for the contagious coronavirus is the next big thing the world is waiting for. In the run-up to the launch of a vaccine, all pharmaceutical companies and stakeholders have come to one pertinent point -- what about pricing? While some argue that the ones who can afford, must pay for it, some contest that everyone must get it for free.

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'Will the govt have 80,000 crores to buy & supply vaccine?'

Adar Poonawalla, the chief executive of the Serum Institute of India which is conducting trials of Covid-19 vaccine candidates, on Saturday raised questions regarding the country¡¯s plan to produce and distribute shots against the coronavirus disease.

A phase III trial of the vaccine candidate developed by Oxford University and British pharmaceutical company AstraZeneca is underway in India as part of a production and testing deal with Pune-based Serum Institute of India (SII).

adarpoonawalla.com

¡°Quick question: will the Government of India have 80,000 crores available over the next one year? Because that is what the Ministry of Health needs to buy and distribute the vaccine to everyone in India. This is the next concerning challenge we need to tackle,¡± Poonawalla tweeted. A spokesperson for the company said no further clarification was available for Mr. Poonawala¡¯s statement. At a population of 130 crore, this works out to about ?600 per vaccine. ¡°The situation is currently complex and dynamic but a likely price would be close to half of that or $2-$3,¡± said the person who declined to be identified because the policy wasn¡¯t yet firmed up. ¡°Those in the national immunisation programme will get it free. There will be a large government-led programme...essentially all who cannot pay will get it free.¡±

It is important to that on August 15, Prime Minister Narendra Modi announced that India is prepared to mass produce Covid-19 vaccines for domestic consumption when scientists approve the trails. ¡°Not one, not two, as many as three coronavirus vaccines are being tested in India,¡± he said from the ramparts of the Red Fort in his Independence Day speech. Days later, when foreign secretary Harsh Vardhan Shringla visited Dhaka, he mentioned in a press briefing that when India is ready with a vaccine, ¡°our closest neighbours, friends, and partners and other countries will be part of it¡±.

This came at a time when officials familiar with the Covid-19 vaccine diplomacy plan said on condition of anonymity, "The Union government is working on at least five distinct ways, ranging from free vaccines to guaranteed supply, in which it can help its immediate neighbours as well as countries in West Asia, Africa and even Latin America, The idea is to leverage the country¡¯s standing as the world¡¯s vaccine factory to consolidate diplomatic ties."

The question remains -- Who will pay for it?

Although pharmaceutical companies plan on recovering some or all of their vaccine development costs, millions of Americans with health insurance will be able to get the COVID-19 vaccine at no additional cost. This is due to the bipartisan Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress in March. This would make a COVID-19 vaccine a ¡°preventive health service,¡± which means health plans must cover the entire cost.

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As far as India is concerned, a survey has found high willingness among Indians to get vaccinated when that day comes. However, the survey also finds that many may not take the jab if they need to pay for it.

The survey was conducted by Britta Augsburg and others among 4,000 slum dwellers in Lucknow and Kanpur in June. Around 95% of the respondents expressed willingness to get vaccinated, say the authors in an article in Ideas for India. In contrast, even at the peak of the virus, just 74% of the respondents to a survey in some European countries wanted to get the vaccine when it arrives.

How far have we come?

Companies such as AstraZeneca that is collaborating with Oxford University, and Johnson and Johnson that is yet to catch up with the leading contenders have said that they are not looking for profit in the initial stages. Some, on the other hand, are still contemplating how to go about this rather sensitive issue.

Moderna, one of the leading contenders that has advanced to the latter stages of human trials, is planning to price the COVID vaccine at $50-60 (Rs 3,700-Rs 4,500) for the entire course. This would mean that per dose would be priced at $25-30 (Rs 1,800-Rs 2,300).

According to the Financial Times, the aforementioned prices have been pitched by the company but is yet to be finalised. Moreover, these prices would apply to high-income countries and the US.

If Moderna's pitch sticks, Americans would end up paying much more for the COVID-19 vaccine than their Indian counterparts. SII that is producing the AstraZeneca vaccine has pegged the vaccine for a much cheaper price. Poonawalla has said that the manufacturers are aiming to price the vaccine at under Rs 1,000 ($13) per dose. He had also said that he aims to keep 50 per cent of the production reserved for India.

US company Pfizer and German collaborator BioNTech, whose coronavirus vaccine candidate is also in the advanced stages of human trials, have meanwhile signed a deal with the Netherlands, Germany, France and Italy for $3-4 (Rs 225-300) per dose, as mentioned in Financial Times.

How will the pricing be decided?

The pricing of the COVID vaccine would be decided keeping in mind multiple factors such as the timing, regulatory submissions, medical need, efficacy as well as competition. Some variations in pricing might also take into account the size of orders and timing of delivery. Having said that, it would be difficult to compare coronavirus vaccine prices during their development stages.

How will the vaccine be distributed?

The distribution of the coronavirus vaccine also remains another moot point. World leaders including Canadian PM Justin Trudeau, South Korean President Moon Jae-in, New Zealand Prime Minister Jacinda Ardern, South African President Cyril Ramaphosa have called for equal access to the COVID-19 vaccine. "Vaccines save lives. That's why we're working here at home and with partners around the world to find one. And when we do, we must keep working together to make sure that people everywhere have access to it - because where you live should not determine whether you live," said Trudeau.