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A top priority for every country is to bring the COVID-19 pandemic under control through the expeditious deployment of safe and effective vaccines worldwide. While supply constraints arguably present the most acute and immediate challenge to vaccine access, for many countries financing is also expected to be a major barrier. News reports show planned spending on COVID-19 vaccines as a large share of existing public spending on health in countries as disparate as Colombia and Uganda—and there is significant risk that this expense will crowd-out essential health services or other public spending priorities.

With strong pre-existing relationships with client countries and the ability to marshal large-scale financing, the World Bank and other regional development banks have vital roles to play in supporting countries’ procurement and deployment of COVID-19 vaccines. And indeed, both the World Bank and Asian Development Bank announced dedicated financing for vaccines and vaccination last year, promising $12 billion and $9 billion, respectively, to the cause. The Inter-American Development Bank indicated it would set aside $1 billion to support its borrowing members, and recently launched a partial credit guarantee to help finance purchases or guarantee indemnity financing if needed.

But how should the MDB vaccine effort intersect with global efforts like COVAX, or indeed plans to share or donate vaccine amongst countries? In this blog, we look at two issues raised by the World Bank’s approach so far and offer options for a better way forward.

Limiting or justifying financing for bilateral vaccine purchasing outside COVAX

While the World Bank has pledged to support COVAX, borrowing country governments can also use World Bank resources to procure vaccines via direct bilateral contracts with pharmaceutical companies or other procurement mechanisms. Initial project approvals (Lebanon, Cabo Verde, Mongolia, Tajikistan, and the Philippines) reflect this approach. It is unsurprising that countries have sought to secure vaccines outside of COVAX since—up to now—the multilateral effort restricted purchasing volumes to 20 percent of every participating country’s population. COVAX’s aim, for equity reasons and given initial supply constraints, is to meet every country’s minimum needs before expanding coverage beyond this threshold. 

Yet the policies of the initiative increasingly appear in need of revision. As countries demand more doses, there is a growing risk that bilateral contracts obtain earlier deliveries and effectively crowd out or delay COVAX deliveries, generating a vicious circle of suboptimal pricing and competitive delivery scheduling, and allowing unchecked spread of the virus in countries with limited vaccine access for key populations. 

Earlier this year, COVAX revised its projections—indicating it expected to be able to reach at least 27 percent of lower-income country populations. (The initial target for the number of doses was set based on the landscaping of supply in 2020, the funding available, and the population coverage related to high priority groups.) But even if—as conditions evolve—COVAX can increase its global target, it will require additional resources to do so. Country co-financing to support the procurement of additional doses (above the initial 20 percent threshold) is likely to be on the table—and the MDBs, including the World Bank, could adopt policies to maximize procurement through this mechanism.  

Another complementary option is to allow as much vaccine procurement as possible via COVAX and use delivery dates as the instrument for priority-setting as an alternate way to disincentivize bilateral procurement efforts and create a clearer, more consolidated demand trajectory for vaccine manufacturers. In combination with either of these approaches, COVAX could also do more to create clear incentives for additional supply, for example via procurement tenders to incentivize scale up of capacity by reimbursing firms for the cost of installation, as suggested by Ahuja et al in January 2021.

While none of these changes is straightforward given COVAX does not have formal governance arrangements, the Bank alongside Gavi, WHO, and other partners could potentially drive such arrangements forward to minimize bilateral procurement in small volumes.

In the absence of such modifications by COVAX or if client countries insist on alternative procurement arrangements, the Bank should—at minimum—require better justification for bilateral contracts or alternative procurement mechanisms—asking project teams to work with client countries to assess the health and economic case for greater levels of vaccination coverage (and therefore greater volumes of vaccine procurement) given a particular country’s age structure, levels of co-morbidities, and existing seroprevalence rates. This analysis should also consider the role of vaccine donations made by other governments.

In addition, the Bank should ensure publication of vaccine contracts and their terms including the number of doses contracted, delivery timelines/lead times, unit prices, liability indemnification, and safety and clinical data. Such an approach would enable informed analysis of delivery dates and allow for an assessment of whether there is indeed a “COVAX crowd-out” effect or whether supply is increasing more rapidly. In doing so, the Bank’s board would serve an important stewardship role, helping to ensure that procurement outcomes can at least be evaluated ex-post to generate clearer policy directions for the future.

Adopting a simpler regulatory standard

When the Bank launched its $12 billion vaccine pledge last fall, the organization outlined criteria for use of the institution’s resources for vaccine purchase. The institution’s vaccine standards are uniquely demanding, requiring in-country regulatory authorization and either (i) World Health Organization pre-qualification (PQ) and approval by one Stringent Regulatory Authority (SRA); or (ii) approval by three SRAs in three regions. The decision to establish this multi-part standard sets the Bank apart from other institutions and organizations in the vaccine deployment landscape—most notably COVAX, which requires (i) WHO PQ or temporarily WHO Emergency Use Listing (EUL); or (ii) under “exceptional circumstances”, products approved by a single SRA from among a subset of institutions.

The Bank’s policy in this regard is too stringent. The Oxford-AstraZeneca candidate, for instance, does not satisfy these requirements (according to the New York Times vaccine tracker, the AZ vaccine has been listed for emergency use in several countries and has EUL from the WHO, but has only been approved for use in one country, Brazil, a country without a SRA). Note that "approval" or "WHO pre-qualification" conveys more stringent criteria and requires a separate process than emergency use listing. As noted in the Cabo Verde project document, the Bank is currently dealing with this issue using case-by-case exceptions given the stringency of the eligibility threshold. However, the policy should be formally revised. Specifically, the Bank should change the criterion to finance vaccines to align with COVAX—accepting WHO EUL to suffice in place of PQ during the public health emergency OR emergency use authorization from at least one of the list of SRAs.

Under the Bank’s current policy, there is a risk that financing could not be used to purchase safe and efficacious vaccines developed in Russia and China, even after they have secured emergency use validation from the WHO since the current policy would still necessitate approval from a SRA (which is limited to authorities in Western countries and Japan).

It is vital that the World Bank ensure vaccines are safe and effective before approving their procurement, but there is no basis for the Bank to be more stringent than COVAX. The cost of delaying vaccine access is too high.

Moving forward, the World Bank needs to plan with shareholders and borrowing member countries for a long-haul effort to procure and distribute vaccines, given the potential that COVID-19 vaccine boosters could be needed down the line. The World Bank should pursue a more systematic and strategic approach to cooperation with global vaccine procurers, starting with COVAX, but considering efforts by PAHO/WHO, Gavi, the African Union, and other partners. The Bank also has a role to play in working with partners nationally and internationally to determine whether COVAX should be leveraged as a broader platform for vaccine procurement beyond the current planned phases and should coordinate with other international actors to ensure its financing can help to bolster and accelerate the race to vaccinate the world.

Disclaimer

CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.

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