I'm not well read on the economics and the nuances of it, but there was a fantastic discussion on Clubhouse just today with some economists and people in healthcare. I have also read a few other things which provide useful information.
The USA had a very good vaccination funding strategy from the beginning. They invested in a diverse portfolio of vaccines spanning multiple technologies, providing advance market commitments for significant volume. I have seen multiple numbers bandied about but I think the total amount they put in was close to $20 billion. What that allowed vaccine manufacturers to do was not be afraid that a market would exist, and allowed them to scale manufacturing to ensure supply. This always seemed a good strategy to me, and some economists were calling it a good strategy as early as mid 2020. Billions invested would save trillions in the economy(plus the lives of course) and billions < trillions is very simple math.
India did not do this. India did a terrible job, and were instead haggling with Serum(who were funding their own scale) for a lower price for months. That was mistake number one and a very costly mistake. As late as January, India was still penny pinching and had booked only 10m doses when they themselves had promised 345 people innoculated(2x the doses) by July. These 700m doses were never going to come out of thin air. They should've funded Serum much, much earlier than the cheque they brought out a couple of weeks ago.
At the start of the pandemic, and in fact, well into the pandemic, vaccine demand was not huge. More importantly, the number of approved vaccines was nil. What has happened since then in Q4 and early Q1 2021 is a lot of vaccines are now approved. There is now suddenly demand for 14 billion doses. What that means is that the raw materials used to manufacture vaccines are a lot more expensive now. There is manufacturing capacity all over the world and Serum is competing with these people to get hold of the raw materials. These raw materials do not scale so rapidly, so the cost to procure these are going to become higher as the supply scales to meet demand. The price that Serum gave at 150 rupees allows them to manufacture at profit but for them to compete on the global market, they need to be making a lot more profit to re-invest it. Serum making more money on the margins allows them to provide more vaccines to us and the world. Capping the price is handicapping our own supply chain.
Did Modi and co feck up(multiple times)? Yes.
@pratyush_utd's point is not that. It's the fact that our policies after fecking up are probably limiting our own supply. We have the vaccines we have today because Serum financed their own manufacturing. We'd be a lot worse if they hadn't.
The point on "entire pharma system" not being utilized is also a red herring and it is not true.