S.LOW BUT Certainly the economic costs of the Covid-19 pandemic are clear. On July 30, US statisticians showed that the economy contracted 9.5% year over year in the second quarter. Production in the eurozone continued to decline. Even South Korea, which has fought the virus better than almost any other country, has not escaped a deep recession.
A vaccine would help end the economic chaos. Scientists and pharmaceutical companies have taken on this task. More than 150 vaccines are being developed around the world, six of them in final large-scale clinical trials. It took the hepatitis vaccination B.– the disease for which most vaccine candidates were developed – decades to make the progress the Covid-19 trials made in months. The public health and economic costs of the pandemic are so high that, even when scientists are away, policy makers must grapple with two questions: How much must be spent on vaccines to make sure enough is made and how to ensure that they are distributed fairly.
So far, governments have invested more than $ 10 billion in Covid-19 vaccines and made forward purchases of approximately 4 billion doses (although data on deals is murky). Since the vaccines may require two doses, in theory that amount could vaccinate the most vulnerable people in the world. In fact, the effectiveness is far from guaranteed, so that a large part of the purchases could turn out to be duds. A typical vaccine in final studies has a 20% chance of failure. Some of the candidates for Covid-19 vaccines involve novel technologies so the risk of failure could be higher. This explains why the rich countries support multiple efforts and contracts are signed every few days (see Figure 1).
Despite efforts in America and Europe to get to the top of the queue, countries in other countries are likely and will be underserved for some time. According to Goldman Sachs, a bank, Japan has agreed to buy enough for just one dose per person (see Figure 2). On average, emerging economies have secured enough to cover less than a third of their citizens.
GAVI, an alliance that funds vaccines for poor countries, has formed COVAX, a purchasing pool for multiple late-stage vaccine candidates. It promises participants to deliver an effective vaccine to up to 20% of their population by the end of 2021, with rich countries paying for their care and funding a kitten for the poor. Around 80 high and middle income countries have announced that they will join. However, it remains to be seen how much money will be put on the table: you’ll have to pay for the first 15% of your vaccines by the end of the month.
Even fulfilling the commitments already made will be a challenge for pharmaceutical companies, let alone producing enough for the world. Existing production facilities can be repurposed for some types of impact. For others, however, new ones will have to be built. These can cost around half a billion dollars each and typically take three years to get operational.
A company typically goes into production once a vaccine has received regulatory approval. However, these are not normal times. To speed things up, some companies have started mass production of vaccines that are still in clinical trials. Companies may have promised 4 billion doses, but some of their vaccines may not pass and need to be discarded. Many experts believe supply is also being limited by the global shortage of vials and syringes. They put a more realistic estimate of global supply at just under 2 billion by the end of next year.
Since this is nowhere near enough to cover the world, it is easy to imagine fighting breaking out as soon as effective vaccines are available. The experience of past pandemics is hardly encouraging on this front. During the H.1N.1 (Swine flu) pandemic in rich countries in 2009-10 has cornered the supply of vaccines to fight the disease. Only when they had more than they needed did they offer some of it to poor countries. By then, the disease had struck the planet and the pandemic was over.
Even at the beginning of the Covid 19 pandemic, global cooperation quickly collapsed. By the end of April, 80 jurisdictions had restricted exports, with governments being particularly careful to hoard supplies of disinfectants, personal protective equipment and thermometers. Some countries even seized shipments through their territory.
Fearful of a repeat of these looting, the Coalition for Epidemic Preparedness Innovations, an alliance of charities and governments that funded the early development of some of the most promising Covid-19 vaccines, has organized manufacturing across continents. So have some pharmaceutical companies.
The World Health Organization (WHO) also tries to avert vaccine policy. Guidelines have been established for the early distribution of supplies to save most lives, protect fragile health systems, and expedite the end of the pandemic. The first doses were given to health and social workers and the next to 20% of the people in each country most likely to die of Covid-19 if infected. The rest would then go to places with the highest risk of outbreak. COVAX has subscribed to these Principles, but there is no indication that countries would respect them in their bilateral dealings with pharmaceutical companies rather than acting in close self-interest.
There is little hope that America, China or Russia, among others, will allow the export of a vaccine made on their territory before enough is available to all citizens. However, the manufacture and distribution of vaccines involves a complicated global supply chain of raw materials, adjuvants (chemicals commonly used to increase potency), vials, etc. In the worst case, countries denied a portion of vaccines could export them Prohibit inputs into the hoarding country. Everyone loses.
A global all-rounder therefore seems inevitable. One way to mitigate this is to spend more. Some economists argue that governments could do more to speed up the manufacture and distribution of vaccines. Separate research groups assume that the world will have to invest around 100 billion US dollars in order to produce several vaccines early and in sufficient quantities. That would be a tenfold increase in spending. However, given the loss of production and the $ 7 billion boost to the global economy so far, it is peanuts. ■
This article appeared in the Finance & Economics section of the print edition under the heading “Other Difficult Questions”.