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Congress leader Chidambaram wants state governments to unionise to haggle over vaccine costs: Here is why that is a bizarre idea

Chidambaram suggested that states should come together to reject the prices for the Covid-19 vaccines that have been set.

P. Chidambaram, former Union Minister and senior Congress leader, has managed to come up with another spectacularly braindead idea that does not make any sense. It is quite probable that even he is keenly aware that his suggestion will cause great harm if implemented.

Chidambaram suggested that states should come together to reject the prices for the Covid-19 vaccines that have been set. He suggested that a price negotiation committee ought to be formed jointly by the states and a uniform price could be negotiated. He is basically asking state governments to unionise to haggle over vaccine prices.

P Chidambaram floats grand dumb idea
Chidambaram’s grand dumb idea

Chidambaram said further, “The joint purchasing power of the State governments will force the manufacturers to agree to a uniform price States must take the initiative. The central government has abdicated its responsibility and surrendered to corporate profiteering.”

The whole propaganda by opposition parties began after the Serum Institute of India announced the price of its Covid-19 vaccine for state governments and private hospitals. For the former, the price has been pegged at Rs. 400 per dose while for the latter, it is Rs 600.

There are multiple obvious flaws with the argument. Firstly, there is a uniform price for all the states. It is with the central government that the states have a difference in the cost of Covid-19 vaccines and that too, only for a limited number of doses.

The opposition parties and entertainers accused the SII of profiteering from the crisis. In reality, the cost of Covid-19 vaccines in India is extremely low and it is much higher in other countries. For instance, the cost of Moderna and Pfizer vaccines range from Rs. 2000 to Rs. 3000 per dose.

Currently, the SII is selling the vaccines at Rs. 150 per dose to the central government, incurring a loss in the process. The cost has been set to Rs. 150 for the first 110 million doses and following that, the centre will be charged Rs. 400 as well.

Even under such circumstances, opposition parties are creating a ruckus over the price. It is bizarre to expect a pharmaceutical company to continue to supply vaccines at a price where they are incurring losses. The business is unsustainable if this continues. They also have to pay royalty to AstraZeneca as well.

Nevertheless, Chidambaram first invents a false bogey of a price differential between the centre and states and then recommends an even more bizarre idea. Firstly, SII cannot supply vaccines at an even cheaper rate and continue to remain viable commercially.

Secondly, it does not make sense politically for states to embark upon such a misadventure. Forming a committee to negotiate prices means an inevitable delay in the procurement of vaccine doses. A delay in vaccine procurement will directly translate into jeopardising the health of their citizens. Consequently, such a delay will reflect extremely poorly on the states for haggling over prices that are already extremely low.

Furthermore, states where BJP is in power will not be on board with such theatrics. States can continue to provides vaccines to its citizens for free, as many states have already announced, but for that, they will have to procure the vaccines at the designated prices.

The BJP is currently in power in 17 states or Union Territories, that is, states where they are either the main ruling party or are in a ruling alliance. That leaves only 14 others where opposition parties are still in control. Even among them, it is unlikely that the YSRCP government in Andhra Pradesh, the KCR Government in Telangana or the Naveen Patnaik government in Odisha will go along with such harebrained ideas.

Then there is President’s Rule currently imposed in Jammu and Kashmir and Puducherry. That leaves only 9 states and Union Territories where the the governments may be willing to come together to form the price negotiation committee as suggested by Chidambaram. Even Delhi is unlikely to get on board with the proposal considering the pressure Arvind Kejriwal is in already.

Will they risk losing massive public support haggling over Covid-19 prices? It appears extremely unlikely. The failure by the states to procure vaccines for their citizens will reflect directly on the government’s performance in states. Any delay will build angst towards the government despite their posturing on social media.

Thus, while Chidambaram maintains a pretense of grave seriousness while dishing out the suggestion, it is unlikely to receive support even from states where his party is in power. He also appears to have forgotten that procuring vaccines is not like buying groceries from the market where people feel entitled to demand chilies worth Rs. 5 for every purchase worth Rs. 100.

 

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K Bhattacharjee
Black Coffee Enthusiast. Post Graduate in Psychology. Bengali.

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