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Smart Thinking blog

Insights and expert advice on the key issues facing today’s pharma marketer

Will that be cash or charge?

India is asking people to pay for booster shots, but extremely poor countries should never consider charging people for public health services

Piggybank vaccine

It seems it’s not enough that the UK Prime Minister has been fined for breaking the rules during lockdown. Or that an American president suggested injecting people with disinfectants to treat COVID-19. Or that videos posted by the President of Brazil were removed from YouTube for spreading COVID-19 misinformation. It’s certainly not enough that China seems hellbent on locking down every city and separating children from their parents during quarantine periods. With COVID-19, it seems that the theatre of the ridiculous has reached new heights.

To wit, the Indian Health Ministry announced that, as of 10 April, the country’s booster campaign would be expanded and made available to all adults between the ages of 18-60 who had received their second shot at least 39 weeks earlier. But there’s a catch: the booster is only free for frontline workers, healthcare workers and senior citizens over the age of 60, and these free booster shots will be available at government vaccination centres. Unless you fit into that category, the booster will cost you somewhere between Rs225-600 per dose and will only be available at private vaccination clinics.

Prime Minister Modi’s government has mocked this public health crisis at every turn. The lack of preparedness has been appalling. The continued large religious gatherings and political rallies that have been ground zero superspreading events have been heartless in their sheer negligence. During the spring of 2021, the world watched in horror as the delta variant overwhelmed India. The government’s oxygen supply effectively ran out. And then, to no one’s surprise, the crematoriums ran out of space and funeral pyres burned incessantly in the open streets and alleyways of the country’s cities and villages. And for those who could not afford a proper Hindu burial ceremony, bodies of loved ones ended up floating in the Ganges.

On the scale of callousness, India’s ‘approach’ to dealing with COVID-19 is, pound-for-pound, the worst in the world.

I don’t need to remind readers what the implications of this policy are. As tens of millions of people are unable to afford, or unwilling to pay for, a booster shot, the virus will continue to infect people. It will continue to overwhelm the Indian health system. And it will continue to replicate, giving potential rise to new, more resistant variants.

But when people ask me about India’s decision to charge its own citizens for doses of COVID-19 vaccines (including booster doses), I reluctantly point to the academic literature for a sobering dose of reality.

The health policy literature is littered with examples of countries that have implemented fees at the point of care with mixed results. If the intent of charging people to access services/ interventions is to discourage some sort of malfeasance or inappropriate utilisation and to ensure fundamental equity for all users, then we can have that discussion.

Public finance has devoted large portions of its theoretical underpinning to public health funding. In fact, it has suggested that subsidising public health programmes largely comes down to three main pillars – private benefit, private cost and social benefit. The private or individual benefit of getting boosted against COVID-19 is high. You are protected against becoming ill, being hospitalised or dying. Accordingly, there should be very little need to subsidise public health interventions when the individual benefit is high. People are motivated, you see. They don’t need anyone to give them extra motivation (for example, a lower or subsidised price).

The private ‘cost’ of COVID-19 vaccines is also very low. We don’t see debilitating side effects or time off work needed to recover from the vaccination. Accordingly, because the private or individual cost is low, there should not be a high need for a subsidy. But here’s the catch: relative to income, without a subsidy, the price of a COVID-19 vaccine may be very high. And this is an aspect of charging fees for basic public health requirements during the middle of a global pandemic that needs to be thought about carefully. We end up with what is known as a negative selection effect. Instead of screening out those who may need the vaccine the least (ie the young and healthy), we might end up screening out those people who can least afford the vaccine but need it the most (ie the most vulnerable).

On the issue of the third pillar – social benefit – the literature is more clear: as the social benefit of a public health programme increases (ie, preventing massive worldwide death and morbidity), the need for subsidies should also increase. In other words, if you’re asking people to save the world, you can’t ask them to pay to do so.

Poverty changes the equation in my mind. I tend to think that countries with extreme poverty should never consider charging people for public health services. But, what seems cold-hearted in the middle of a global pandemic may have some root in academic theory.

Rohit Khanna, MBA, MSc, MPH is the Managing Director of Catalytic Health, a leading healthcare communication, education & strategy agency. He can be reached at: rohit@catalytichealth.com or you can learn more about him at rohitkhanna.ca

Rohit Khanna, MBA, MSc, MPH is the Managing Director of Catalytic Health, a leading healthcare communication, education & strategy agency.

15th June 2022

From: Marketing

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