Centre should buy entire Covid vaccine output and allocate them proportionally: Tamil Nadu FM

Our Bureau Chennai | Updated on June 08, 2021

P Thiaga Rajan

‘The Centre is uniquely positioned to negotiate as a monopsony to counter the imbalance in market structure’

The Centre should acquire 100 per cent of the production of all domestic manufacturers and allocate them proportionally to the states, based on their respective population as a first approximation (or refine further based on spread/infections), Tamil Nadu Finance Minister P Thiaga Rajan in response to Prime Minister Narendra Modi’s announcement on vaccine on Monday.

The prevailing unbalanced market structure (duopoly of manufacturers, which may expand to an oligopoly of 3 or 4) for vaccines, the Centre is uniquely positioned to negotiate as a monopsony to counter the imbalance. The massive gap between supply and demand makes the market even more inefficient, which further argues for this sole-buyer for the union, he said in a tweet.

Expanding on Chief Minister MK Stalin’s statement, Rajan said that all private hospitals exist within a state, and hence they can be directed to get their supplies directly from their respective state governments. When even states are unable to procure vaccines at the required quantityas pointed out by the Prime Minister, it is unrealistic that thousands of private hospitals can acquire directly from a duopoly/oligopoly of vaccine manufacturers with any semblance of an orderly market, Rajan said.

With many governments around the world have invoked the equivalent of force majeure clauses to remove regular governance norms to battle the Covid-19 pandemic, a move to acquire 100 per cent of the domestic production of vaccines by the Centre would be well in keeping with the expectations of investors and industrialists globally and would not damage India’s market-economy credentials with investors in any way.

The Prime Minister has reiterated multiple times that health is a state subject. As health education (which requires attached hospitals for the requisite clinical experience) is inextricably linked with health delivery, Rajan urged the Centre to end the NEET examination and let states administer their own exams as an integral part of managing their own health departments, the delivery mechanism for public health, which has been repeatedly acknowledged as a state subject.

Published on June 08, 2021

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