Image credit: Suneesh K
The government’s decision to open up Phase 3 of the Covid-19 vaccination drive for everyone above the age of 18 may become a bittersweet moment for companies.
While multiple senior executives Moneycontrol spoke to welcomed the move saying it would help them also provide jabs to younger employees, nearly all of them are now worried about the increased cost of vaccinating their staff.
Under this programme, vaccine manufacturers will supply 50 percent of their monthly Central Drugs Laboratory (CDL) released doses to the Indian government and the remaining 50 percent can be supplied to State governments and the open market.
For corporates who were originally planning to vaccinate their employees (plus family in some cases), this means a change of plan. Vaccines being sold in the open market would mean the manufacturers are free to set a price. This means that the Rs 500 a company would have to spend per employee (for two doses) for vaccination would significantly increase.
Why is cost a big concern?
For a company with 1,000 employees, the current cost of Covid-19 vaccination is Rs 5 lakh, at Rs 250 for each dose. Once the liberal vaccination regime kicks in from May 1, pricing will be opened up.
So, the same Rs 250 per dose vaccine could be priced at Rs 1,000. If that is the case, for a 1,000-employee company, the vaccination cost would zoom from Rs 5 lakh to Rs 20 lakh.
“While we want to vaccinate our employees, there will be a significant cost increase if vaccines are priced at Rs 1,000-2,000 for two doses. Companies would then have to selectively vaccinate employees, depending on their income level and whether he/she is required to be physically present at the workplace,” said the human resources head of an insurance company.
Currently, companies are looking at which employees need to get vaccinated immediately and need full reimbursement. The rest will either be asked to pay for the vaccination or be given a part reimbursement.
Pricing concern
Corporates across sectors told Moneycontrol that pricing of the vaccines and availability will be the biggest concerns at a time when there are reports of those above 45 years missing their vaccination appointments.
“The initial plan was to reimburse the vaccination costs for all 10,000 employees and their spouses. But now that pricing will be decided in the open market, we have to figure out how to manage the costs. If vaccines are priced at Rs 1,500 and upwards, it will be a significant financial cost and we may only be able to provide it to those earning below a certain threshold,” said the chief financial officer of an electrical goods firm.
The government has said that manufacturers would transparently make an advance declaration of the price for the 50 percent supply that will be available in the open market, before May 1, 2021. Based on this price, State governments, private hospitals, and industrial establishments will be able to procure vaccine doses from the manufacturers.
Will there be vaccines for everyone?
Since State governments, private hospitals and industries have to procure vaccines from one source, there are concerns about the availability of vaccines for everyone.
Apart from the existing Covaxin and Covishield vaccines, State governments can import others such as the Pfizer BioNTech vaccine, Moderna vaccine and J&J Covid-19 vaccine.
“It is a good step. But where is the vaccine? My mother was supposed to get her second dose on April 19. But it got cancelled,” said a senior executive at a steel company.
Some of the major steelmakers, including Tata Steel, JSW Steel and ArcelorMittal Nippon Steel India had earlier reached out to vaccine makers to directly procure jabs. JSW Steel, for instance, wanted to procure jabs for its 25,000 employees, and their family members. In total, up to 200,000 doses would be needed.
The plan was to first vaccinate employees at manufacturing units, as they are more vulnerable than those working from home.
An executive from another steel company said the hope is that they will get the supply at a price of about Rs 1,000 a jab.
Among other sectors, Amazon, Havells, ICICI Bank, TVS Motor, Infosys, Flipkart, TCS, Accenture, Cognizant and Reliance Industries are among companies that have offered to cover the Covid-19 vaccination cost for employees.
On the face of it, the plan looks good, considering the worsening Covid-19 situation across the country. Beds are in short supply and the number of critically ill patients is on the rise.
“This will be the turning point in the battle with Covid. We will win,” Mahindra Group chairman Anand Mahindra tweeted after the government announcement.
Devil in the detail
But, for manufacturing units, the devil is in the detail. How many vaccines will be available and who should be prioritised are a couple of the questions corporates are grappling with — especially since most factories employ workers in the 20-30 age group to operate machinery.
“Over the last two years we managed to bring down the average age at our plants to under 30 from an average of 45 years a few years ago. The decision to vaccinate all above 18 is a big positive for us. We will await further guidelines about vaccine availability before taking this further,” said a mid-level executive from one of India’s top four carmakers.
Stock exchanges, meanwhile, are going ahead with their vaccination plans. “As most of our staff are operating from home, we are exploring the possibility of vaccination for our employees under the current circumstances,” said an NSE spokesperson.
A BSE spokesperson said that the management is providing vaccination to all employees and their spouses, children and parents. “BSE has collaborated with Bombay Hospital for the vaccination drive, as per the government guidelines currently applicable. The prevailing guidelines are for 18+ years of age only. BSE has also tied up with various hotels to provide quarantine facilities for families of the employees,” the spokesperson added.
On April 19, India had 2,59,170 fresh Covid-19 cases and 1,761 deaths. The Health Ministry’s official overall death toll stood at 1,80,550 with 15.3 million cases.
