COVID-19 has assaulted the health of people and economies. The impact on the economy has led to further stress on people's livelihoods. This unprecedented threat to public health has not been constrained by measures taken by national and state governments. All humankind is waiting with bated breath for a COVID-19 vaccine that can set us on a course to normalcy. The human and economic cost of COVID-19 has been immense and governments are stepping up to expedite vaccine availability.
Given the vaccine's huge impact on public health, it is reasonable to expect that the government makes it available free for all. The cost of undertaking this exercise would depend on a variety of factors " cost of manufacturing, cost of supply chain and cost of administration of the vaccine. For example, nucleic acid-based vaccines have to be stored at sub-zero temperatures and are costly to make and transport. The estimated cost for the Moderna vaccine is $15/dose, and sourcing all necessary doses from Moderna would cost over INR 2,50,000 crore. On the other hand, Serum Institute of India has promised a certain quantity of the Oxford vaccine at $3/dose. If India were to buy all vaccines at this cost, we will have to spend roughly INR 50,000 crore. Both costs include a distribution cost assumed at 20 percent of the vaccine price. However, these estimates do not include the cost of ramping up vaccine supply, a step essential if India aims to vaccinate its population in a reasonable amount of time.
India currently makes one billion vaccine doses for use in the country. However, this capacity also caters to other vaccines and cannot be completely diverted to manufacturing the COVID-19 vaccine. Additionally, we should expect vaccine prices to reduce as more scientific advances are made in the field. Let's assume given all the variables, the cost for vaccinating India is about INR 1,50,000 crore. This is higher than the cost >estimated by Serum Institute's Adar Poonawalla and accounts for additional manufacturing setups being put in at government's cost.
On the face of it, this looks like a huge amount. But really, it's around 1 percent of India's economy and is >equivalent to the amount being spent on the recently-announced food security welfare scheme Gareeb Kalyan Anna Yojana in FY21. On paper, the government footing the entire vaccination bill is entirely doable. If the vaccines do offer a path to normalcy, then this one-time cost is an essential investment with increasing returns. It definitely fits with the aspirations of the political economy, since promising an eagerly awaited elixir at free of cost is an attractive strategy to gain votes. It is therefore not surprising that various state governments and even the Union government has announced that the vaccine will be made available free of cost to Indian citizens.