Question

give an example of a healthcare product that is financed by the government but produced by private firms. Can you explain why this arrangement exits?

Answer 1

We can take the example of the ongoing pandemic in 2020 i.e. the COVID-19 pandemic which has affected the economies and healthcare system of almost all the major countries. The initial cases of covid-19 were seen in Wuhan,China and it gradually spread to other parts of the world. Some of the worst affected countries are U.S. , brazil , UK , Russia. So countries were forced to impose lockdown to slow down the rate of transmission which has led to disruption of economies.

Till now there have been no progress with the production of any vaccine for covid-19. In this scenario , there are certain private firms which have been funded by the governments for the prouction of covid-19 vaccine. This is an example of a situation where the financing is done by the government but produced by private firms. In India The Union science and technology ministry started funding a Pune based firm for covid-19 vaccine.

Such an arrangement may exist in times of such crisis as there is a need for the vaccine as soon as possible because the healthcare system will collapse if the transmission rate is not controlled. So the goverment decided to fund private firms for this so that this can be done as soon as possible