The Supreme Court has questioned the Centre’s logic that manufacturers are selling it Covid vaccines for a hefty discount because it places bulky orders. The court asked the government then why it cannot buy 100 per cent of the vaccines at a discount, instead of leaving States to fend for themselves.

“The Central government justifying its lower prices on account of its ability to place large purchase orders for vaccines, raises the issue as to why this rationale is not being employed for acquiring 100 per cent of the monthly CDL doses,” a Bench, led by Justice DY Chandrachud, wondered aloud in a 32-page order.

The Centre can buy vaccines for ₹150 while the States have to shell out between ₹300 and ₹600.

“If the Central government’s unique monopolistic buyer position is the only reason for it receiving vaccines at a much lower rate from manufacturers, it is important for us to examine the rationality of the existing Liberalised Vaccination Policy against Article 14 (right to equality) of the Constitution, since it could place severe burdens, particularly on States/UTs suffering from financial distress,” the court held.

Burden on States

It said the Centre, with a ₹35000-crore budget to buy vaccines, has money to spare unlike the States, which has suddenly been burdened with the task to cough up funds to purchase vaccines and inoculate a larger expanse of the population, including the 18-44 age group.

“The Union Budget for Financial Year 2021-2022 had earmarked ₹35,000 crore for procuring vaccines. In light of the Liberalised Vaccination Policy, the Central government is directed to clarify how these funds have been spent so far and why they cannot be utilised for vaccinating persons aged 18-44 years,” the Supreme Court ordered.

The Centre’s liberalised vaccination policy gives it only a 50 per cent role to purchase vaccines. The other half is equally shared between States/Union Territories and private hospitals.

The court said the Centre has left States with very little bargaining powers by pre-fixing with the manufacturers both the quantity and price of vaccines meant for the States.

“Prima facie, the only room for negotiation with the two vaccine manufacturers (Serum Institute and Bharat Biotech) was on price and quantity, both of which have been pre-fixed by the Central government,” the court reasoned.

Foreign companies

Besides, the court said States are handicapped in their direct talks with foreign vaccine manufacturers as the latter prefer negotiating with federal governments of countries.

The court also sought confirmation from the States about the Centre’s claim that “every State/UT Government shall provide vaccination free of cost to its population”.

“It is important that individual State/UT Governments confirm/deny this position before this court. Further, if they have decided to vaccinate their population for free then, as a matter of principle, it is important that this policy is annexed to their affidavit, so that the population within their territories can be assured of their right to be vaccinated for free at a State vaccination centre,” the court explained.

The Bench directed States and UTs to file their affidavits in this regard within the next two weeks and clarify their individual policies for free vaccination.

Written policy

The court has asked the Centre to place on record its ‘written policy’ to ensure the equitable distribution of vaccines across sections of the society, and how this would factor into the rationale of equal apportionment between State/UT Governments and private hospitals.

It also wants the government to enumerate the nature and extent of its intervention with respect to the final, end-user price charged by private hospitals, especially when a cap on procurement by the private hospitals has been set. eom

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