How you spent Rs 35,000 crore-fund allotted for procuring Covid-19 vaccines: SC asks Centre

Supreme Court of India. File Pic

The Supreme Court has asked the Centre to clarify how Rs 35,000 crore earmarked in Budget for 2021-22 for procuring Covid-19 vaccine have been spent so far in light of its current Liberalized Vaccination Policy and why the fund cannot be used for vaccinating persons between 18 to 44 years age group.

The top court also posed serious questions on Centre's Liberalized Vaccination Policy which enables State/UT Governments and private hospitals to procure 50 per cent of the monthly Central Drugs Laboratory (CDL) approved doses in the country at a pre-fixed price.

It said that if the Centre's unique monopolistic buyer position is the only reason for it receiving vaccines at a much lower rate from manufacturers, it is important for the court to examine the rationality of the existing Liberalized Vaccination Policy against Article 14 of the Constitution, since it could place severe burdens, particularly on States/UTs suffering from financial distress.

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A special bench of Justices DY Chandrachud, LN Rao and S Ravindra Bhat said that the Centre justification for Liberalized Vaccination Policy has been adduced in a bid to spur competition which would attract more private manufacturers that could eventually drive down prices.

"Prima facie, the only room for negotiation with the two vaccine manufacturers was on price and quantity, both of which have been pre-fixed by the Central Government. This casts serious doubts on UoI's (Union of India) justification for enabling higher prices as a competitive measure," the bench said.

It said that the Central Government justifying its lower prices (for vaccines) on account of its ability to place large purchase orders, raises the issue as to why this rationale is not being employed for acquiring 100 per cent of the monthly CDL doses.

"The Union Budget for Financial Year 2021-2022 had earmarked Rs 35,000 crore for procuring vaccines. In light of the Liberalized Vaccination Policy, the Central Government is directed to clarify how these funds have been spent so far and why they cannot be utilized for vaccinating persons aged 18-44 years," the bench said.

It noted that Centre in response to court's question on the poor and marginalized suffering on account of the vaccine prices, has stated that the eventual beneficiary of the vaccine would not be affected by the Liberalized Vaccination Policy since every State/UT has promised to vaccinate its residents free of cost.

"Nevertheless, it is reiterated that the UoI should consider utilizing its position as the monopolistic buyer in the market and pass down the benefit to all persons," the bench said, adding that even if the States/UTs were to fund the higher-priced vaccines, these funds are expended at the behest of the public exchequer.

It said that the Centre and States/UTs, both operate in the service of the Indian population, and raise and disburse funds in their name and the additional funds expended on procuring vaccines against a deadly pandemic are necessary expenditure for any State/UT Government which has battled the public health emergency for over 15 months now.

"However, an avoidable expense would eventually hurt the welfare of individuals residing within those States/UTs, who may potentially be benefitted by the differential funds being utilized for ramping up the health infrastructure in the State/UT, which is equally important to combat the pandemic," the top court said.

Dealing with the issue of basis of pricing, the bench said that it commend the co-operative efforts of the Centre and the private manufacturers in developing and distributing vaccines which are critical to mitigate the pandemic but want to understand the process of development and augmentation of vaccine production and its pricing for States/UTs and private hospitals.

It directed the Centre to provide clarification the Government would have minimized the risks of the manufacturers by granting Emergency Use Authorization to the vaccines, which should factor into its pricing.

The top court also asked the Centre to clarify on the justification for intervening in pre-fixing procurement prices and quantities for States/UTs and private hospitals, but not imposing statutory price ceilings and the comparison between the prices of vaccines being made available in India, to their prices internationally.

It also sought clarification from Centre on the manner in which cold storage equipment capacity is being balanced between the Central and State/UT Governments.

"The manner in which the States/UTs are managing the logistical burden for vaccinating persons aged between 18-44 years, along with persons aged over 45 years," the bench sought to know.

Besides, several other clarifications on logistics front, the top court also sought to know whether cold storage facilities in India have increased for the Covid-19 vaccination drive, the present numbers, and comparison with the numbers prior to March 2020.

The SC also asked the Centre to place on record all relevant documents and file notings reflecting its thinking culminating in the vaccination policy, and the purchase history till date of all jabs including Covaxin, Covishield and Sputnik V.

The top court also asked the Centre to specify the steps being taken by it to ensure drug availability for Mucormycosis or black fungus.

Besides, it directed all states and Union Territories within 2 weeks their stand on providing free vaccination.

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