Profmed CEO Craig Comrie unpacks the challenges that lie ahead of private vaccine procurement.
According to medical scheme Profmed CEO Craig Comrie this revelation is not new but this is rendered moot by the fact that government still gets to set the Single Exit Price (SEP) at double the vaccine’s cost, and they can do this for any vaccine procured by the private sector.
“Medicines are regulated in price similar to the way bread and petrol. In this case the Minister of Health will set the price for all Covid 19 vaccines,” said Comrie. “There is a conflict of interest and Government is then given license to effectively load the price of vaccines to promote the use of a government central vaccine rollout programme while using the increased “profit” to cross subsidise (or even tax) privately procured vaccines. This pricing mechanism is already set to be included in the price of the vaccines that government procure”
To illustrate his point, Comrie provided the following example: If the actual cost of a vaccine dose is R250, the current intention from government is to set the SEP (regulated price) at R500. If you are a private facility buying this from Biovac or Government or even vaccine producers, then you are paying R500 and thereby providing the additional money to cross subsidise other vaccinations for South Africans who cannot afford it.
This is how, Comrie pointed out, the government intends to pay for the “So-called one for one finance arrangements that they requested from schemes in January.”
This is another issue where Profmed was deemed to have ‘broken ranks’ as the scheme decried the notion that medical schemes should foot the majority of the bill for South Africans not on medical schemes.
The Profmed position remains that any additional cost contained in the regulated price may be validated if this translates to a quicker vaccine rollout which must happen before the end of 2021.
However, Comrie argues that this would mean that the next 10 months will then require 4 million vaccinations every month. “That is no soft target, but it is doable with the right level of engagement between government and private sectors. It will just take a little bit of innovation and significant coordination to make sure we get vaccines to all who are willing to receive them.”
Although Afriforum has been extremely vocal about the issue of privately procured vaccines, Comrie says schemes and healthcare groups had already engaged suppliers, the response from vaccine suppliers has always been the same.
“As a scheme of 75 000 professionals and their families, our efforts to procure vaccines were rejected as vaccine supplier order books were focused on larger orders of over 10 million doses. These type of orders could only come from governments and so far, they have refused to engage with private sector on a smaller scale.”
Comrie explained that this has put a damper on private procurement but said he has been assured by vaccine manufacturers that as production levels pick up in the second half of 2021, the private sector will then be able to purchase vaccines from these suppliers.
“This will most likely create opportunities in the third phase of the government vaccine rollout,” said Comrie. “Once all healthcare and essential workers, as well as the vulnerable have received vaccines then the floodgates of private procurement should be opened. It is critical that we get and distribute the vaccines in the most effective manner to save lives, whether through the support of the government’s vaccine rollout program or through private sector procurement, this must be as soon as possible.”
