Private hospital doctors say Punjab government strong armed them to buy overpriced vaccines

Between May and June, the Punjab government sold vaccines to private hospitals in the state at more than two-and-a-half times the price. Doctors at private hospital told me that the state also strong-armed hospitals into buying the vaccines from the government at inflated prices instead of placing orders before the manufacturers directly. This has meant that people in Punjab had limited access to government vaccines, which were instead diverted to private players, who then charged the public exorbitant rates. Some large private hospitals even marked up the price further as service charges and sold it to smaller private hospitals, according to doctors I spoke to. This led to some people paying a price for vaccines that was marked up thrice, costing as much as Rs 1,560 for a single shot.

Punjab began including private players in its vaccine roll-out in early March. On 1 March, the second phase of India’s ambitious vaccination programme began, which aimed to vaccinate everybody above the age of 60, and those above the age of 45 who had co-morbidities for COVID-19. Two days earlier, Vandana Gurnani, the additional secretary at the health ministry and mission director of the National Health Mission, sent a letter to the state-level mission directors of the NHM that private hospitals could begin vaccinating people under the Ayushman Bharat programme, the central government health scheme—a programme to ensure the health of central government employees—or any state health-insurance schemes.

The letter specified, “The service charges to be recovered by private hospitals acting as COVID Vaccination Centres would be subject to a ceiling of Rs100/- per person per dose.” It continued, “In addition, private hospitals will recover Rs.150/- per person per dose as cost of vaccine dose. Hence, financial ceiling of the total amount recoverable by private hospitals is Rs.250/- per person per dose.” The charge of Rs 150 was the cost of the vaccine dose, which was to be sent to a centralised bank account. Following this, the Punjab government began distributing their vaccine stock to private hospitals in the state.

On 22 April, the Punjab government also announced that regardless of the cost it would ensure free vaccination for every adult. The state government had previously budgeted for this in Punjab’s 2021–22 budget, which was presented on 1 April. However, by late April, the COVID-19 case rate had grown quickly in the state while it was facing a vaccine shortage.

On 30 April, Amarinder Singh, the chief minister of Punjab, sent a panicked letter to Harsh Vardhan, the union health minister. “We have received 33.43 lacc doses of Covishield and 3.34 lac doses of Covaxin and most of these have been utilized leaving behind the stock barely sufficient to carry on vaccination for another 1-2 days,” the letter read. “With the opening of vaccination of 18-44 years of age group, there has been a sudden rise in the demand for vaccination. While the State is in touch with the Vaccine Manufacturers for supplies of Phase-3 vaccination category, the supplies being presently made available by the Government of India for priority categories is very low and beneficiaries are returning back due to the shortage of vaccination.” Singh requested that the union government urgently deliver 30 lakh doses of Covishield and ten lack doses of Covaxin to Punjab.

The shortage of vaccines did seem dire in the state. The third phase of the national vaccination programme, now open to all adults, was due to start the next day. Neighbouring Haryana and Chandigarh had already begun opening registration for the vaccine roll-out. But on 30 April, Singh issued a terse press release stating that they were deferring the roll-out “due to non-availability of vaccine.” By then, Punjab had already become one of the worst-hit states in the second wave of COVID-19.

Alongside the start of the third phase of vaccination, the union government two weeks prior had clarified what options would be available for state governments for procurement of vaccines. The union government clarified that, every month, it would procure 50 percent of doses from any manufacturer cleared by the Central Drug Laboratory, and deliver the doses for free to the state governments. State governments as well as private players would be free to negotiate with manufacturers for the other 50 percent and buy as required. As of 30 April, Bharat Biotech, the manufacturer of Covaxin, announced it was going to sell the vaccine to state government’s at Rs 400 per dose. The Serum Institute of India, the distributor of Covishield, were willing to sell one dose at Rs 300 for state governments.

In late April, the Punjab state government had created an expert group for prioritising vaccination, which was led by the virologist Gagandeep Kang. The expert group also included Jacob John, a community-health expert from CMC Vellore, and Rajesh Kumar, the former head of public health at PGIMER, Chandigarh. On 25 April, the expert group defined priority groups that must be vaccinated first by the state government, including construction workers, industrial workers and those with comorbidities. The government also chose to prioritise the districts most severely affected by the virus. Anticipating the coming vaccine shortage, on 25 April, the Punjab government placed an order for 30 lakh doses of Covishield from the Serum Institute. However, the first batch, of one lakh doses, arrived only on 10 May.

On 1 May, citing the critical shortage of vaccines, the Punjab government began recalling unused vaccine doses it had distributed during the second phase of the vaccination drive for Rs 150. “I don’t understand, when the focus should be on rapid and extensive vaccination, why did the state government recall these vaccines?” a doctor running a private hospital in Amritsar, who wished to remain anonymous, asked me. “We felt they were obviously recalling the vaccines, to begin selling the same at a much higher price later.” While the doctor’s fear that the same vaccines that were taken on 1 May were sold at a higher price later cannot be proven, in May the Punjab government did begin selling vaccines at a marked up price to private hospitals.

From late May, several doctors from private hospital told me, the Punjab government began arm-twisting private hospitals to acquire vaccines from them, rather than through direct agreements with manufacturers. The process through which the Punjab government set up a system to sell vaccines to private hospitals is transparent in three letters sent by senior state government officials.

On 20 May, Amit Kumar, the special secretary at the state’s health department, wrote a letter to several senior government officials stating that in order to create funds for vaccinations, a new bank account was being created. The account, opened in a branch of HDFC in Chandigarh was called the “Vaccination Fund, Punjab” and all CSR funds pertaining to vaccinations were to be redirected to the account. By 20 May, the state government had received 3.6 lakh doses, of which 2.3 lakh had already been used in government facilities.  

On 29 May, GB Singh, the director of health and welfare in Punjab, sent a letter to several senior officials and all immunisation officers in the state to ensure that private hospitals are given vaccines. “You will ensure the availability of vaccines to Private hospitals for maximum coverage in the State,” the letter said. It also specified, “As per the vaccine allocation by the Govt. of India, the beneficiaries of the vaccines should be from the State of Punjab/UT only.” That same day, Charanjeet Singh, the civil surgeon of Amritsar, sent a letter to all private hospitals registered in the district. The letter referred to the previous two letters and said, “Regarding the subject, vaccines should be procured according to the above two letters and be administered in your hospital.” The Caravan has a copy of all three letters.

A doctor in a private hospital in Amritsar, who wished to remain anonymous, told me that he was part of a WhatsApp group for private hospitals that wanted to buy vaccines from the government. The group included Amarjeet Singh, the assistant civil surgeon of Amritsar. The doctor shared screenshots of the group chats, in which Amarjeet Singh writes, “All the hospitals who have deposited money in pb govt account to purchase vaccine please give me details in my office on so-that information can be sent to state to send for supply.” In subsequent messages the assistant civil surgeon says, “1060 per dose,” and “Minimum 100 doses order.” He told me that there were similar WhatsApp groups created in other cities in Punjab too, a majority of which were deleted later.

An orthopaedic surgeon from Amritsar, who wished to remain anonymous, told me that he had gotten strict verbal orders from Amarjeet to only get vaccines through the state government, and not directly from manufacturers. “By then, I had already arranged for the Covaxin doses from the manufacturer Bharat Biotech itself,” he told me. “The state government was selling it at Rs 1060 per dose and only later did I get to know that the state government had itself got it for only around Rs 400.” When asked, Amarjeet did not deny that he had sent the messages to private hospital doctors. He confirmed that 999 doses of the vaccine had been bought by private hospitals in Amritsar from the Punjab government.

The cost the state government incurred for buying the vaccine is easily calculable from a press release the Punjab directorate of information and public relations issued on 29 May. The press release, quoting Vikas Garg, the state’s nodal officer for vaccination, stated, “Further, Covishield 4.29 lakh doses have been purchased at the cost of Rs. 13.25 Crore and Covaxin 1,14,190 doses procured at a cost of Rs. 4.70 crore.” This means that on average, one dose of Covishield cost the Punjab government Rs 309, and one does of Covaxin cost the state Rs 411.

An office bearer of the Indian Medical Association, who wished to remain anonymous, told me that it was disheartening to see how the state government had raised the cost of private vaccination from Rs 250 to more than Rs 1,060 in less than a month. “Earlier we were getting the vaccine at Rs 150 per dose and were allowed to take Rs 100 additionally for administering the injection or the service charges,” she told me. “But now, we are forced to take the vaccine at a much higher rate than what state government itself is getting it.”

The case of the Sri Guru Ram Das University of Health Sciences suggests that the state government began selling vaccines to private hospitals immediately following the creation of the “Vaccination Fund, Punjab” account. The SGRDUHS, in Amritsar is run by Shiromani Gurudwara Parbandhak Committee—the organisation responsible for the management of gurdwaras across Punjab, as well as other states. “On 21 May, our hospital purchased and received 512 vials—which accounts for 5,120 doses—of Covaxin worth Rs 53.76 lakhs,” AP Singh, a professor of anaesthesia and dean at SGRDUHS, told me. “In short each dose is costing us around 1,050 rupees. And we are vaccinating free of cost to all the beneficiaries above 18 without any discrimination. We have never charged any beneficiaries ever, even when we were purchasing Covishield from state government.” Singh told me he had written to Vini Mahajan, the state’s chief secretary, asking that the hospital be given free vaccines, but got no response.

Another doctor from Jalandhar, who also wished to remain anonymous, told me, “Big hospitals like Max and Fortis were getting a lions share of the vaccines that the state government was selling.” The Indian Express reported that of the 42,000 doses that the Punjab government sold to private hospitals, Max hospital in Mohali bought 30,000 doses. The doctor from Jalandhar continued, “This meant that there was again a shortage, so we from smaller hospitals had to buy the vaccines from Fortis, who marked the rate up by 200 rupees and sold it to us at 1,250 rupees. When we vaccinated people, we had to raise the price again slightly.” He told me that in some places a single dose of the vaccine was costing as much as Rs 1,560. “Of course, because the state government was giving all the vaccines to private hospitals this meant that government hospitals didn’t get too many, and people were forced to pay the exorbitant rates at private hospitals to get vaccinated,” he added.

In May, senior government officials also posted on social media urging people to get private vaccines. For example, on 15 May, Vini Mahajan, Punjab’s chief secretary tweeted, “#Privatehospitals Max Mohali and @fortis_hospital have procured vaccines & have begun #vaccinating 18-44 years in #Punjab. Max is charging Rs. 900 for covishield and Fortis Rs. 1250 for Covaxin. Please register on #CowinPortal to book a slot at these hospitals.”

On 4 June, Sukhbir Singh Badal, the president of the opposition Shiromani Akali Dal, called for a high court-monitored probe into the legality of the Punjab government selling vaccines to private hospitals at a marked-up price. Badal accused the Punjab government of creating an artificial shortage of vaccines so that both the state government and private hospitals could profit. On the same day, Vandana Gurnani, the additional secretary at health ministry, sent a letter to Hussan Lal, Punjab’s principal secretary for health, about the diversion of vaccines. Referring to an NDTV report about the opposition’s claims that the Punjab government sold vaccines to private hospitals at a marked up price, Gurnani’s letter said, “The contents of this news article, prima facie, appears to be in clear violation of the Liberalized Pricing and Accelarated National COVID-19 vaccination strategy”—the official name for the third phase of the Indian government’s vaccination programme. The letter continued, “The State Government is therefore, requested to confirm the veracity of this news article and send a clarification to MoHFW immediately in this regard.”

Later that evening, Lal sent a letter in response to Gurnani offering an explanation. In the letter, he claimed that in the second week of May, only two private hospitals in Mohali had access to vaccines and a majority of the other private hospitals in the state had completely run out. Lal said that the decision to sell vaccines to private hospitals was primarily a result of the inability of private hospitals to procure vaccines themselves and due to the priority groups as stipulated by the expert group.

“The State Government received requests regarding allowing vaccination of 18-44 years age group population of categories which were not prioritized by the State Government including students desiring of going abroad for higher studies, etc,” Lal’s letter said. “It was in this background that it was decided, as one time measure, to encourage and support the private hospitals to provide limited doses of vaccine so that the persons who are in need of vaccination can get vaccinated quickly at the private hospitals.” The response however does not mention how the Punjab government set the price for the vaccines it sold, which was the primary question in Gurnani’s letter.

When asked about the pricing, Lal told me, “Had we given the doses at the same cost, it would have been like squandering the public supply through these private hospitals.” He continued, “As per the GoI orders, they would have otherwise got it at Rs 1,050 only. There were those who were desperate to get the vaccines against payment and we decided to sell only 40,000 doses at these rates. The money was going to vaccine fund to buy more vaccines in future but there was a huge outcry.”

Other officials made similar justifications. Garg, the state’s nodal officer for vaccination, also argued that it was imperative to give vaccines to private hospitals to vaccinate “various sections of the society … including students who have got admission in foreign universities.” He told me, “This would have allowed vaccination to those sections of the society who are yet not prioritised but they are willing to pay and in need of vaccination.”

Kang, the head of the expert group also argued on similar lines. “We did consider students, particularly those who were likely to need to travel, and decided that the if they needed to travel for education, they were likely to belong to the upper socio-economic strata and therefore more likely to access doses of vaccine that would be available in private-sector hospitals.”

It is unclear how Kang or Garg reached the conclusion that selling vaccines to hospitals was the best way to ensure vaccination for students. Given that the state had budgeted for free vaccinations for its whole population, if the expert committee or the Punjab government recognised that groups like students going abroad needed vaccines in a rush, they could have simply added them to the government’s prioritised list. Multiple private doctors also told me that no government officials had specified to them that only select groups, such as students going abroad, had to be vaccinated. None of the letter or orders from government officials to each other, or to private hospitals, that were accessed for this report include any such specification either.

The Punjab state government appears to be the only state government reported to have sold vaccines to private hospitals at a marked-up price rather than distribute it through the state government health infrastructure. Gurnani’s letter to Lal also suggested this. In states such as Karnataka, the state government does not even have data on the number of vaccine doses that were bought by private hospitals. Manisha Verma, the additional director general of media and communication for the health ministry did not respond to questions about whether they had reports of other state governments selling vaccines to private hospitals.

On 4 June, Amarinder Singh said he would reverse the order diverting vaccine stock to private hospitals. A press release of the Punjab DIPR issued that evening stated, “The Health Minister Mr. Balbir Singh Sidhu said that instruction of providing one-time limited vaccine doses to private hospitals has been withdrawn by the State and all these vaccines will be administered free of cost to age group of 18 to 44 years at Government vaccination centres.” The release goes on to say that of the 42,000 doses sold by the state government to private hospitals, only 600 had been used. The release also stated that Sidhu said that “instruction has been issued to all Civil Surgeons that no fresh allotment to be made to any private hospitals and the private hospitals should return forthwith all the vaccine doses available with them.” Sidhu also said he was ordering an enquiry into the sale of vaccines to private hospitals.

The Amritsar doctor who wished to remain anonymous told me, “On 3 June, we got the message on our WhatsApp group to collect our doses.” He continued, “On 4 June, my employee was standing before the district immunisation officer, and the latter got a call from the civil surgeon. My employee was then sent back saying that the vaccine vials have to be returned. Later, it was revealed that Covaxin is not being allocated and that the money would be refunded.” Amarjeet, the Amritsar ACS, told me, “The private hospitals have been refunded for the vaccines by the state and the vaccines now remain with us.” The Amritsar doctor confirmed that he had been refunded.

Sidhu has argued that the decision to sell vaccines to private hospitals has nothing to do with him. On 4 June, Sidhu told the media that the office of the health minister had no part in the order. “Our department only handles testing and treatment,” he said. “For any other details you should ask the chief secretary.” He additionally told me on 21 June, “Orders were not given by me.” He continued, “These were Chief Secretary and Vikas Garg’s orders. The moment I got to know of these, I appraised the CM of the situation and got the order withdrawn immediately.”

His comments, though, ignored the fact that the letter announcing the creation of the bank account of the “Vaccine Fund, Punjab,” was sent by Amit Kumar, the principal secretary of the health department, who works under Sidhu. In other states such as Odisha and Jharkhand, the procurement and distribution of vaccines does come under the purview of the health minister. A report in the Economic Times also confirms that the procurement of vaccines in Chhattisgarh, Punjab, Kerala, Madhya Pradesh, Bihar and Telangana are managed by the respective state’s health minister. The chief secretary Mahajan did not respond to emails asking them about where the order to sell vaccines to private hospitals came from.

The official order for the withdrawal came from Garg, the nodal officer for vaccination. His order read, “The order of providing one time limited vaccine doses to 18-44 years age group population through private hospitals has not been taken in the right spirit and is hereby withdrawn.” The fact that the withdrawal came from Garg suggests that the initial order, too, had come from Garg. He refused to share a copy of the initial order.

At present, Sidhu has ordered that private hospitals should return to directly procuring vaccines from manufacturers. He also announced that the amount deposited by private hospitals to the vaccine fund would be refunded shortly. AP Singh, the anaesthetist from SGRDUHS, told me that his hospital had not been refunded for the vaccines it had bought from the state government yet. “They should refund us, of course, that is one thing,” he said. “But who is going to refund the people of Punjab whose free vaccines were sold, creating a shortage and forcing them to buy it from private hospitals? A government that promised vaccines free in its budget has forced people to buy it at 1,500 rupees. Who is going to refund them?”