Deep Pockets, Strong Relations: Corporate Hope for COVID Shots

COVID Vaccination Phase Three: Liberalised Supply and Pricing Concerns.

(Photo: Arnica Kala / The Quint)

The vaccine procurement and distribution landscape has changed considerably since the Government of India (GoI) first launched its COVID-19 vaccination programme on 16 January 2021. Whether you consider these changes as positive or not likely depends on whether you are employed in a tier-1 city by an organisation with deep pockets and strong relationships.

Yes, it has ever been thus in India and the pandemic has underscored this divide in blood.

The Ministry of Health and Family Welfare (MoHFW) issued its ‘COVID-19 Operational Guidelines’ back in December 2020, outlining the GoI’s vaccination strategy.

Only the GoI can procure and distribute vaccines and only healthcare workers and frontline workers were eligible to receive the jabs. But the guidelines contemplated ongoing engagement with the private sector and vaccination through private health facilities.

As part of this planned engagement, the MoHFW then issued a guidance note dated 6 April 2021, stating ‘COVID-19 Vaccination At Work Places’, outlining the conditions, under which private-sector employers could organise vaccination camps at the workplace only for their employees.

Such camps were to be organised in collaboration with private healthcare facilities, registered as Private COVID Vaccination Centres (PCVCs).

PCVCs could purchase vaccines from the Government and ‘partner with’ private sector employers to administer vaccines at employee vaccination camps. Such PCVCs could charge no more than Rs. 250 per person per dose for such vaccinations.

Even when the GoI expanded coverage to adults above 45 years in Phase 1, it had retained control of procurement, distribution and pricing. But this changed in Phase 3, with the GoI’s ‘Liberalised Pricing and Accelerated National COVID -19 Vaccine Strategy’, which came into effect from 1 May 2021.

Changes that Phase-3 Vaccination Bought

The new policy expanded the vaccination programme to cover those aged 18-44 and allowed state governments and private hospitals to buy vaccines approved for use in India directly from domestic vaccine manufacturers at prices set (and declared in advance) by such manufacturers.

Earlier, the GoI procured vaccines in bulk and allocated them to the States.

Private hospitals could no longer buy vaccines from the GoI. But at the same time, the cap on what they could charge for vaccinations was removed.

• Vaccine manufacturers would now supply 50 per cent of their monthly production to the GoI (i.e. the central government), and the other 50 per cent to state governments, private hospitals and industrial establishments, through their hospitals (i.e. the decentralised channel).

• Out of the 50 per cent allocated to the decentralised channel, half would go to the state governments and the other half to the private sector.
• The GoI would continue to vaccinate healthcare/frontline workers and citizens aged 45 and over.
• State governments could technically begin to vaccinate citizens under 45, but being short on vaccines were encouraged by the GoI to prioritise citizens aged 45 and above.
• The immediate impact of allowing vaccine manufacturers to set their own prices was to increase the cost of procurement between four to eight times for private hospitals, and between two to four times for the states.

The two vaccines manufactured in India were both being supplied to the GoI for Rs 150 a dose before phase-3 vaccination.

Immediately after, the manufacturers announced that private hospitals would be charged Rs 600 per shot for Covishield and Rs 1,200 per shot for Covaxin.

For states, Serum Institute announced a rate of Rs 400 per dose, then reduced it to Rs 300 the next day as a ‘philanthropic gesture’. Bharat Biotech quoted the states Rs 600 per dose (quelling any instinct towards philanthropy). Soon, it became clear that private hospitals were, inexplicably, having more luck than the State Governments in procuring vaccines.

Ensuing vaccine shortages have resulted in most states halting vaccination of citizens in the 18-44 group altogether.

The New Policy essentially created a second, more expensive, ‘free-market’ vaccination programme, running parallel to the GoI and state government programmes.

Large organisations who were keen to vaccinate their employees and facilitate a return to the workplace and normalcy took advantage of the ‘liberalised’ new policy to tie up with large hospital chains and conduct vaccination camps for their employees. Today, these corporate vaccination camps are your best shot at vaccination if you’re in the 18-44 category. How do they work? What are the rules?

Vaccines Authorised for Use in India

On 3 January 2021, the CDSCO approved two vaccines for restricted emergency use:

1. Covishield, developed by Oxford-AstraZeneca and manufactured in India under licence by the Pune-based Serum Institute of India (SII)
2. Covaxin, (developed by Bharat Biotech in association with ICMR and National Institute of Virology)

On 12th April 2021, the CDSCO approved Sputnik V, developed by Moscow’s Gamaleya Institute. Sputnik V is currently being imported into India by Dr Reddy’s Laboratories, and also being contract-manufactured under licence by Panacea Biotec.

No other vaccine has been approved yet. Zydus-Cadila is likely to seek emergency-use approval for its three-dose vaccine, currently in Phase-3 trial, in June 2021.

Hyderabad-based Biological E has received approval to begin Phase-3 trials of its own two-dose vaccine and expects to produce 75-80 million doses a month from August 2021 (subject to approval). It also has a licence to contract-manufacture 600 million doses of Johnson & Johnson’s single-dose vaccine, which has not been approved for use in India yet.

Can Private-Sector Employers Directly Purchase COVID Vaccines Manufactured in India?

No. Under the new policy, apart from the GoI and the state governments, only hospitals and ‘industrial establishments, through their hospitals, are eligible to procure vaccines from the private channel. Therefore, corporates generally procure vaccines from and conduct vaccination camps through a PCVC.

A list of registered PCVCs is available on the CoWIN app.

Can Private Sector Employers Procure Vaccines From the Government?

No. While, before the new policy, a company could also purchase vaccines from and vaccinate employees in partnership with a government healthcare facility, now it can only buy vaccines from the ‘private channel’.

Are Vaccine Prices Capped?

Not for private sector employers, because while the prices at which the manufacturers sell to hospitals is set, there is no cap on the prices at which these hospitals may resell. The New Policy only says ‘the price charged for vaccination by private hospitals would be monitored.’

In practice, employers will likely find that only a handful of hospital chains have vaccine stocks and are willing to conduct corporate vaccination camps. Further, the prices charged by these hospitals vary significantly around the country and an employer may have to pay up to double the rates set by the manufacturers to secure supply.

Can Employers Import COVID-19 Vaccines?

Yes, through authorised importers.

The Central Drug Standard Control Organisation (CDSCO) issued a public notice on 4 May 2021 (titled ‘Guidance for import of vaccine by private sector or any person’), which allowed imports of vaccines by the private sector.

However, the process laid down by the CDSCO itself for import of vaccines (see ‘CDSCO public notice on Guidance for approval of COVID-19 Vaccines’, dated 15 April 2021) requires that one first procure an import license and registration from the CDSCO. An application for such a license may only be made by the foreign vaccine manufacturer’s Indian subsidiary or authorised agent.

To import a vaccine already approved in India, such as Sputnik V, an import licence is sufficient. To import a vaccine that’s not yet been approved in India (e.g. the Pfizer or Moderna vaccines), the applicant must also secure a new drug permission by the CDSCO.

The CDSCO has stated that it will ‘fast track’ (i.e make a decision within three days) applications for approval of vaccines that have already received emergency approval for restricted use by the relevant drug regulatory authorities of the US, European Union, UK or Japan, or listed for Emergency Use by the World Health Organisation.

Once a ‘foreign produced’ vaccine has been approved for restricted emergency use in India as above, an importer/ authorised agent with the necessary import license can import the vaccine, but must thereafter (i) conduct a ‘post approval parallel bridging clinical trial’ and (ii) administer the imported vaccine to 100 recipients, monitor them for 7 days for safety outcomes and then submit the safety data to CDSCO for approval to sell the vaccine more widely.

The new policy also says that imported vaccines may be ‘utilised entirely’ by state governments and the private sector, the implication being that there is no requirement to reserve half the capacity for the GoI, as with domestically manufactured vaccines.

Rules and Regulations That Apply for Employers to Organise Vaccination Camps?

Under the MoHFW Guidance Note, any corporate looking to implement a vaccination drive must comply with specific guidelines, including the following:

1. Employers must approach the District Task Force (DTF) chaired by District Magistrate or Urban Task Force (UTF) chaired by Municipal Commissioner to be identified as an eligible workplace (i.e. one that employs more than 100 people and has three separate rooms for waiting, vaccinating and observation).
2. Once identified, the relevant office or workplace is registered as a ‘Work Place COVID Vaccination Center’ (WCVC) on the CoWin portal.
3. A WCVC must be tagged to the nearest private health facility registered as a PCVC. The tagged PCVC will provide the vaccine and deploy a trained vaccination team to the WCVC.
4. The employer must designate a ‘Nodal Officer’ to oversee and facilitate the vaccination process, including identifying all beneficiaries, ensuring their registration on the CoWIN portal and coordinating with the tagged PCVC to arrange space and infrastructure.
5. All Work Place CVCs must have a medical officer as a team leader and an anaphylaxis kit for management of any adverse event, and have a basic life support ambulance on standby.

How Are Employers in Mumbai Governed?

The Mumbai Municipal Commissioner has separately framed and issued on 7 May 2021, its ‘Guidelines on COVID-19 Vaccination at Work Places/Housing Societies’. These guidelines also cover vaccination in housing societies but are generally very similar to the MoHFW Note.

Can Employers Also Vaccinate their Employees’ Family Members?

Neither the MoHFW Note nor the MoHFW letter dated 19 May 2021 allowed employees’ families to be vaccinated at workplace vaccination camps, while the Mumbai Guidelines did.

Employers realised (even if the GoI initially did not) that employees are not free to return to or focus on work while family members remain affected by or vulnerable to COVID-19.

Naturally, the MoHFW received several requests, including from the National Association of Software and Service Companies, to reconsider its position.

On 21st May 2021, i.e. two days after ‘clarifying’ that private employers could not vaccinate their employees’ families, the MoHFW again ‘clarified’ that an employee’s family members and dependents (as identified by the employer) could be vaccinated at a workplace CVC, provided the employer procured the vaccines.

At a time of widespread vaccine shortages – when state governments reportedly cannot procure vaccines from domestic manufacturers, but private hospitals can – those fortunate enough to be employed in organisations that have managed to pull together vaccination camps have come to realise that these camps represent the only source of access to vaccines, for themselves and their families.

But the trouble with this pandemic is that none of us are safe until all of us are. And while those who beat the odds in this roll of the dice can thank their employers for now, what will happen when the next wave rolls around, and there are no vaccines to beat the mutated variations that wash up on our urban shores?

(Shantanu is a New York and India qualified lawyer who worked with international law firms, such as Linklaters and White & Case, in New York, Singapore and Hong Kong, and held senior legal positions at pharma majors Lupin and Cipla in India, before founding his own firm, Ronin Legal. Ronin Legal focuses on healthcare, M&A and general corporate advisory. Sampreetha currently interns at Ronin. This is an opinion piece, and the views expressed are the author’s own. The Quint neither endorses nor is responsible for them.)