There are lots of lessons for the future from the successful development and rollout of Covid vaccines, which could prove vital in dealing with a future pandemic. This success story was not guaranteed and the speed with which vaccines were developed and deployed remains surprising.
Two recent papers, from the Washington Peterson Institute and from University of Chicagoeconomists, provide valuable analysis of what went well and what might be done better if we want to ensure the next vaccines the world needs can be developed and produced even more quickly.
At the beginning of 2021, the pandemic was killing 300,000 people worldwide each month. The full economic cost for the United States alone was about $800 billion a month. That means there could have been a huge benefit to society, and to the world economy, if the successful production of vaccines could have been speeded up by even a month.
Early last year when the pandemic began, the US and the European Union saw the urgency of developing vaccines rapidly. While different models were used to drive the process on each side of the Atlantic, in each case the chosen approach reflected the fact that the governments could not predict which research programme would be successful. Therefore, in both cases financial incentives were provided to quite a wide range of researchers and companies. This proved very wise as some of the really big pharmaceutical firms – for example GSK – proved unsuccessful in their research effort, while a number of much smaller and newer firms – Moderna being one – provided vital breakthroughs. Eighteen months ago, it would not have been possible to predict which firms would be the winners.
Spreading risk
Because success in developing vaccines and scaling up production is uncertain, large countries or blocs such as the US or the EU are in a better position to hedge their bets and spread risk than smaller ones, and thus to drive vaccine development. Scientific expertise is essential but does not guarantee success. The UK struck it lucky with Oxford-AstraZeneca, where other expert labs produced blanks. BioNTech succeeded, while others produced duds.
While the eventual widespread deployment of vaccines to the public has proved rather similar across the EU and in the US, America was a few months ahead of the curve. Given how complex it can be to manufacture vaccines, governments needed to invest in production as well as in vaccine development. The US strategy in that regard proved more effective than the EU’s, where supply was affected by manufacturing problems.
The EU’s approach offered contracts to buy large quantities of vaccine, on condition that the companies successfully developed the product. That strategy left a huge amount of risk with the companies, who were unwilling to scale up manufacturing capacity in advance until they knew that their vaccines would work. However, the US gave financial support for advance investment in the manufacturing process, which proved more effective in ramping up supply.
The University of Chicago study indicates governments should shoulder more of the risk in scaling up manufacturing capacity, rather than just contracting to buy the successful product. Money wasted by governments in developing manufacturing that may not be needed if a vaccine is unsuccessful would be small relative to the benefits of early deployment of a successful vaccine. However, some level of risk should be carried by pharmaceutical companies, in order to incentivise them to do a good job.
Diversification
The Peterson Institute’s research highlights the complexity of the supply chain necessary to produce a successful vaccine. This study emphasises the importance of diversifying the manufacturing process across plants and countries.
While the successful Pfizer vaccine was initially produced in the company’s own plants, different companies in the US, Germany, Belgium and the UK have played vital parts in the large-scale production process. Today, Pfizer has separate supply chains in the US and Europe, which involve many different companies. This includes a plant in Dublin which produces essential inputs for Pfizer’s EU supplies.
Because the supply chain is complex, crossing many countries, vaccine nationalism is dangerous. While the debacle about fulfilment of the EU contract with AstraZeneca may have tempted the EU to retaliate against the UK, this could have been very harmful to overall EU vaccine supply, since the Pfizer production process relied on supplies of a vital component manufactured in the UK.
It would make sense, and potentially save many lives, to invest in advance manufacturing capacity, building up stockpiles of intermediate inputs used in vaccine production. That would enable faster and cheaper scaling up of vaccine production in any future pandemics.
