Bringing a COVID-19 Vaccine to Market: Where Do We Go from Here?

A lot has been written, including by ourselves, on how best to bring a COVID vaccine (or ideally, several) to market. In this blog, we review the good and the bad about where the world now stands in efforts to bringing a vaccine to market, from the perspective of payers, national governments, and country coalitions, as well as development partners. We also set out some ideas on how best to move forward.

The good

In the months since COVID-19 first came to the world’s attention, there have been positive steps forward in efforts to develop a vaccine:

• The global community, including private and public actors, has moved with unprecedented speed to research, finance, test, and manufacture a COVID vaccine.
• At the same time, governments have committed to cross-subsidizing the poor, backing the CEPI- and Gavi-led Covax facility. This in turn allows, in principle, for differential pricing and subsidised access arrangements for low-income countries (LICs) and for recently announced arrangements for pooled procurement via UNICEF.
• Governments seem to endorse needs-based allocation principles, albeit mostly within (e.g., see the UK approach) as opposed to across national borders, especially when it comes to the wealthiest nations.

The bad

Alongside these promising developments, however, are many ongoing challenges:

• Most high-income countries (HICs) are also engaging in bilateral deals or local buyers’ clubs, with details about these arrangements emerging on a daily basis. Linked to this, there is a general pushback against globalisation and a reversion to vaccine (and other commodity) nationalism and self-reliance.
• In the “arms race” for securing as many doses of as many frontrunner products as possible, usually through advance purchase contracts (APCs), there has been no appetite for or attempt at risk-sharing with the private sector. Further, a “picking winners” approach may well crowd out private investment and undermine public support for the less prominent candidates
• The current approach to bringing a vaccine to market seems to have completely missed a large number of non-producer HICs but also upper-middle-income countries; what we called the “missing middle.” The latter in particular seem to be invisible to the newly shaped market as they neither fit under the Gavi LICs arrangement nor do they have the frameworks and means to aggregate and make visible to manufacturers their demand signals (with the exception of China). This has led some of the bigger BRICs (e.g., India and Russia) to rush to announce their own successful domestic candidates.
• Despite expressed interest, it seems that the Covax facility is viewed more like an ODA solution by the richest countries (e.g., EU), resulting in much lower-than-expected financing (less than 10 percent for the overall ACT Accelerator needs as of 10 August 2020) and hence limited pull power, though it remains to be seen how many of the expressions of interest turn into pledges, and what fraction of that into disbursements.
• Despite the WHO allocation principles and verbal commitments by some governments to share with the rest of the world and by some but not all companies to price at cost, there is no procedural governance mechanism with teeth to enforce these allocation principles as doses of different kinds of vaccine become available, leaving companies to have to make difficult decisions in the midst of a bidding war amongst nations. Indeed, the 3 percent and 20 percent benchmarks to reflect healthcare professionals and elderly populations are hardly applicable equally around the world (e.g., Norway has more healthcare professionals and more older people than Malawi).
• In a rather circular/insular way, the international aid community seems to be taking for granted that a successful vaccine will be developed, licensed, and produced in a timely fashion. The aid community is focusing on delivering on its own target of 2 billion doses, notwithstanding that these doses do not yet exist, and even if they did, they would be nowhere near enough to get the global economy moving. The, perhaps inevitable, division between aid for LICs and the rest of the world is making half the market (by volume) invisible and segmenting policy environments with no clear avenue (other than HICs joining Covax) for bringing the bilateral and ODA discussions together in terms of research, licencing, procurement, and distribution.

What next?

As efforts to bring a COVID-19 vaccine to market progress, governments must publicly acknowledge and signal to manufacturers and investors that they expect several generations of vaccines with improving efficacy as opposed to a single first-to-market one, and make sure producers know that if they produce a better vaccine there will be demand for it (as opposed to health systems being locked into contracts requiring buying one suboptimal product)

Equally and importantly for the first generation products already in APCs as well as future ones, governments must set out HTA-type value assessment frameworks for assessing comparative effectiveness over and above the safety and efficacy hurdle of licensing bodies such as the US Food and Drug Administration and the European Medicines Agency. HTA-type frameworks are also needed for negotiating prices that reflect health benefit as well as to prevent double paying (given the record amounts of push and down payment monies) and to avoid the sunk cost fallacy of adopting a substandard product just because a government had originally bet on it.

• Such an assessment and pricing framework will signal that better performance for later entrants will be reflected in a price premium (as we have discussed elsewhere), ensuring the pipeline doesn't dry out too early.
• It will help address the challenge of parsing out relevant public investments from private investments and different contractual obligations and pricing expectations (reductions for heavy public investment or to enable cross subsidizing within a buying group).
• Further, such an HTA framework, which many industry players are using and are keen on, will help send clearer market signals and clearer market mechanisms than an opaque patchwork of public contracts and quasi market mechanisms. This will enable us to move from round-one national picks to enhanced and performance-linked choices over time. This is particularly important as most companies have understandably signalled that they will not be adhering to cost-plus pricing principles, especially past the first wave of the outbreak. Assessing health benefit will be key to pricing to incentivise more and better vaccines.

Major governments through vehicles such as the G20 and the WHO must come together to convene a multinational platform of trusted experts working with local analysts and planners to translate the WHO allocation principles into actionable/implementable steps under different scenarios of vaccine profiles and epidemiological realities. Such principles can then be hardwired into (ideally) existing and all new contracts. Allocating constrained supply across markets whilst governments are seeking to pre-empt supply through APCs is a critical issue the world must address to achieve an effective response. As well as political will, it requires local modelling and analysis which must start now to enable implementation once the first products are out.

Finally, there is a need for licensing agreements and transfers of technology so successful candidates transfer production in the poorest regions of the world at affordable tail prices. We have already seen legal challenge between innovators and the companies they contract with to manufacture the vaccines, and this is likely to get worse as new products come to market whilst others fail. Ideally we will see deals where HICs bring companies into arrangements which both deliver value to the company and also facilitate necessary technology transfer and licencing out of production (to be paid for by the likes of Gavi) as a condition of accessing that value.