How to get vaccines to poorer countries quicker in the next pandemic

The COVID-19 pandemic caught many global institutions and leaders by surprise. As experts now consider how to best prepare for the inevitable next pandemic, recent research from a pair of economists at the World Bank and International Monetary Fund suggests that a key step to solving vaccine inequity is to help lower-income countries with the financing to place advance orders. On average, wealthy countries placed advance orders for COVID-19 jabs by late 2020 — with some signing contracts in May of that year — while lower-income countries lagged behind by several months, the research shows. Up to 75% of delays in vaccine delivery could be attributed to the timing of when orders were placed, meaning that the sooner vaccines are ordered, the sooner they will likely be delivered. The researchers — Ruchir Agarwal from IMF and Tristan Reed from the World Bank — propose establishing a new advance commitment mechanism with access to a credit line on “day zero,” — defined as the day that the World Health Organization declares a pandemic — which would allow lower-income countries to get in line to buy vaccines earlier. This kind of financing facility would help avoid the issues that arose with the Access to COVID-19 Tools Accelerator, or ACT-A, which was hindered by delays in raising money from donors to place orders on behalf of low- and middle-income countries. “The response could have been even faster and more equitable,” said Reed, speaking at an event Monday on how multilateral institutions can better handle global health emergencies in the future. He said, for example, that while wealthy donor nations did ultimately give around $20 billion to ACT-A to fund vaccines, therapeutics, and diagnostics in lower-income countries, raising that amount took two years. Much of this funding came only in 2021 and even 2022, after the richest countries already placed their vaccine orders. Simply moving up access to the money that eventually becomes available anyway — and most of which went to vaccines — would go a long way toward fixing the queuing problem for lower-income countries. The promise of steady demand could also help spur increased supply by assuring producers that buyers are waiting. “We … need surge funding to purchase vaccines and secure a place in line during ‘wartime,’” Reed said, referring to the acute phase of a pandemic. In their paper, the researchers recommend that countries set up an advance commitment facility immediately. It would pool resources for lower-income countries and would have access to a line of credit — all lying dormant in “peacetime” and standing ready for activation when the next pandemic hits. Barriers to an advance commitment facility The idea of such a funding mechanism is not entirely new. For example, more than a decade ago donors gave $1.5 billion in advance market commitments for a pneumococcal vaccine, which helped speed up delivery in lower-income countries. The World Bank has said that at the time, the vaccine was in fairly advanced stages of development — unlike the COVID-19 vaccine, which was new. “You are looking at a very different risk profile from the financial risk perspective and also from a demand perspective,” said one World Bank official who spoke with Devex about the differences between the pneumococcal and COVID-19 vaccines. “It would not have been an automatic cut-and-paste situation” during the COVID-19 pandemic. Had the bank directly funded advance purchases of COVID-19 vaccines, it would have ended up competing with COVAX, a pillar of ACT-A that was set up to help ensure equitable access, bank officials told Devex. Meanwhile, wealthy nations did not want COVAX competing with them for supplies, even as they bought more doses than they needed. This could emerge as an obstacle to asking countries to create a fund for advance purchases during a crisis, since it could compete against them. The paper suggests that one way around this is to have the private sector assume credit risk via pandemic-linked bonds, with the excess interest financed by donors or low- and middle-income countries. Alternatively, a financier — such as a bank — could assume the risk. The idea is to move away from involving political powers. “The clear lesson is that if we are serious about it, we need to put a lot more money at stake upfront — and at risk,” said another bank official, while stressing that the funds must also go toward ensuring vaccine delivery capacity in lower-income nations. Where to house a new fund While the second official supported establishing a dedicated facility to get ahead of problems in the future, he questioned whether the World Bank itself should house it, given that the lender lacks the expertise in vaccine research and development. “We are not best placed to pick winners in the vaccine world,” the official said. “But we’d be huge champions of having such a fund.” In addition, a dedicated preapproved fund would help overcome a key technical constraint on the way the World Bank lends: It generally finances countries, which are its clients and members. But a global dedicated financing mechanism would not face such limitations and could finance organizations. Another key point that Reed and Agarwal make in their paper is that institutions such as IMF and the World Bank are not able to finance vaccine purchases for drugs that have not yet been authorized by health regulators. “You need a willingness of finance to lend before vaccines are authorized … and also to incentivize supply,” Reed said. To solve this problem, Reed said, the day-zero funding mechanism could be created with a risk-mitigation aspect that would allow the bank or other financiers to finance prepayment, thereby securing lower-income countries a place in line and incentivizing production. These institutions would only then commit to fund the actual procurement once there is regulatory approval, such as an emergency use authorization from the U.S. Food and Drug Administration. “We … need surge funding to purchase vaccines and secure a place in line during ‘wartime’” --— Tristan Reed, economist, World Bank Foreseeing potential complications Of course, even if everything is set up exactly right, there may be complications. For example, during the COVID-19 pandemic, India — a major global vaccine producer — implemented an export ban on vaccines to prioritize its own citizens during a wave of the contagious delta variant. COVAX had based much of its planning on vaccine supply from India. Bank officials told Devex that the export ban reinforced their view that it would be risky for the lender to use its own funds for pre-purchases of vaccines that were not yet being delivered. Amanda Glassman, an executive vice president at the Center for Global Development, said the bank made a few mistakes during the COVID-19 pandemic, including being risk-averse with its funds at the onset while also misreading how vaccines would be produced once approved. “They didn’t understand that vaccine manufacturers couldn't scale up very quickly,” Glassman said. On the risk aspect, she said this could be an issue in the future if nothing changes, as the key to investing, to ensure lower-income countries get a place in line, is to “put up the money” while vaccines are still in clinical trials. At the same time, shareholders in the bank could have pushed for more production, or they could have taken from their own doses and quickly moved them to cover health care workers in lower-income countries. “The donations also lagged a lot,” Glassman said. While Reed favors the idea of having more local vaccine manufacturing capacities across the world, which could also help circumvent any one state’s export bans, part of the issue comes back to demand. There needs to be steady procurements from factories during peacetime so that they can be ready to push out emergency vaccine supplies in wartime. There needs to be “a concerted effort to actually make sure that those local producers have sustained demand,” Reed said. At the moment, the situation in South Africa, where a local vaccine manufacturer is struggling to find buyers, suggests success will depend on the regularity and coverage of routine immunization campaigns and the purchase of these locally produced vaccines by governments and international procurement agencies.