UNICEF

April 15, 2021 — U.S and Gavi co-host event for additional funding for COVAX amid concerns about two workhorse vaccines for COVAX

An important part of global efforts to vaccinate the world has been the work of the World Health Organization, Gavi, CEPI and UNICEF to provide an array of vaccines through early support of research and procurement of large quantities of doses for distribution to countries participating in the program including 92 low- and middle-income economies through COVAX. The COVAX objective for 2021 has been distribution of around two billion doses. While a large amount of money has been raised for vaccine purchases, additional needs in 2021 for COVAX are around $2 billion.

This Thursday, the United States and Gavi will co-host an event seeking additional funding for COVAX. The U.S. State Department press release from April 12 is copied below. See U.S. Department of State, United States to Host Event to Launch the 2021 COVAX Investment Opportunity, April 12, 2021, https://www.state.gov/united-states-to-host-event-to-launch-the-2021-covax-investment-opportunity/.

“On Thursday, April 15, 2021 at 8:00 a.m. EDT the United States will co-host the launch of the Investment Opportunity for the Gavi COVAX Advance Market Commitment (COVAX AMC), a virtual convening to galvanize additional resources and commitments to support global COVID-19 vaccination.

“Secretary of State Antony Blinken, USAID Acting Administrator Gloria Steele, and Gavi Board Chair José Manuel Barroso will bring together world leaders, the private sector, civil society, and technical experts to advance and accelerate global access to COVID-19 vaccines. Secretary Antony Blinken will offer opening remarks.

“Equitable access to safe and effective COVID-19 vaccines across the globe is critical for reducing the tragic loss of life, ending the pandemic, bolstering the U.S. and global economy, and keeping Americans safe at home and abroad. By pooling donor resources, the COVAX AMC provides access to safe and effective COVID-19 vaccines for 92 low-and middle-income economies, supporting the delivery of quality, lifesaving vaccines to those most in need and helping to contain the spread of COVID-19 and emerging variants.

“Thanks to Congress and the generosity of the American people, the U.S. government has already contributed $2 billion to support the COVAX AMC, out of a total planned $4 billion through 2022. The United States is currently the largest donor to COVAX, making up nearly forty percent of the COVAX AMC funding commitments announced to date.

“This event will be live-streamed on Gavi’s website, gavi.org and open to the public.  For more information email OES_PA_DG@State.gov.”

Gavi’s press release of 29 March 2021 announcing the event is copied below and provides the needs that hopefully will be met by Thurday’s event. See Gavi, United States to host launch event for Gavi COVAX AMC 2021 investment opportunity, 29 March 2021, https://www.gavi.org/news/media-room/united-states-host-launch-event-gavi-covax-amc-2021-investment-opportunity.

Geneva, 29 March 2021 – The United States government announced today that it will host the launch of the Investment Opportunity for the Gavi COVAX Advance Market Commitment (AMC). The virtual event, which will take place in April, will be co-hosted by José Manuel Barroso, Chair of the Gavi Board, and the Secretary of State and USAID Administrator on behalf of the United States. It will bring together world leaders, the private sector, civil society and key technical partners to present the case for additional resources for the Gavi COVAX AMC. 

“Country demand for COVID-19 vaccines has increased significantly in light of new COVID-19 variants, and the need for additional financing has become more urgent. In addition to committing US$ 4 billion to support Gavi’s COVID-19 related work, the United States is a long-standing supporter of the Alliance. It was one of Gavi’s original six donors and has contributed more than US$ 2.7 billion to Gavi’s core work since 2000. 

“’We welcome U.S. leadership in hosting the launch of the Gavi COVAX AMC Investment Opportunity,’ said José Manuel Barroso, Gavi Board Chair. ‘The United States has been a key Gavi partner for more than two decades, playing a critical role in helping the Alliance expand access to lifesaving immunisations for the most vulnerable around the world. Its recent contribution of $4 billion for procurement and delivery of COVID-19 vaccines for lower-income countries has made the United States Gavi’s top donor and a leader in the global pandemic response. With U.S. financial and diplomatic support, Gavi is very well positioned to mobilize the funds and the doses we need to end the acute phase of the pandemic.’

“The Gavi COVAX AMC is an innovative mechanism that seeks to provide access to up to 1.8 billion donor-funded doses of COVID-19 vaccines for 92 lower-income economies. In order to achieve that goal and build on the contributions made by donors so far, Gavi will be seeking at least US$ 2 billion in additional funding for the AMC in 2021. The Investment Opportunity will outline how Gavi will use this funding to support equitable access around the world, thus helping end the acute stage of this pandemic. The Investment Opportunity also looks ahead to the future, describing how to address the pandemic as it continues to evolve. 

“’As the United States has made clear through its Gavi partnership and commitments to global health security, no one is safe until everyone is safe,’ said Dr Seth Berkley, CEO of Gavi. ‘Gavi is thrilled to co-host the launch of the Investment Opportunity with the United States. With new donor funding, we will be able to procure up to 1.8 billion COVID-19 vaccine doses for lower-income countries. Strong U.S. support for the AMC is a reminder that COVAX offers the fastest, most comprehensive way out of the acute phase of the global pandemic.’

“’The emergence of new, more transmissible COVID-19 variants makes fair global access to vaccines more important than ever to protect the most vulnerable, reduce the prevalence of disease and slow down viral mutation.’ said Dr Richard Hatchett, Chief Executive Officer of the Coalition for Epidemic Preparedness Innovations (CEPI), which manages COVAX vaccine research and development. ‘Equitable access to COVID-19 vaccines will benefit the entire world, so I’m delighted that the U.S. will help COVAX to secure additional donor funding for lower-income countries.’

“Hon. Kwaku Agyeman-Manu, Minister of Health of Ghana, which took one the first deliveries of COVAX-supported vaccine doses, remarked that ‘this is about fairness, about justice, and about bringing a swift end to the pandemic. COVID-19 has affected all of us, and we must protect at risk populations everywhere if we are ever going to see a return to normal. We will only recover fully if we recover together and with its support for COVAX, the United States is helping set the course for a safer, more resilient world.’

“The Gavi COVAX AMC is a central part of the COVAX Facility, the global pooled procurement mechanism designed and administered by Gavi. Thanks to the support of COVAX AMC donors, coupled with the demand and resources of 191 participating economies, the Facility has already begun to deliver doses – the majority to lower-income countries – as part of the largest and most rapid global vaccine rollout in history.

“COVAX, the vaccines pillar of the Access to COVID-19 Tools (ACT) Accelerator, is co-convened by Gavi, the Coalition for Epidemic Preparedness Innovations (CEPI), and the World Health Organization (WHO) – working in partnership with UNICEF as a key delivery partner, developed and developing country vaccine manufacturers, the World Bank, and others. It is the only global initiative that is working with governments and manufacturers to ensure COVID-19 vaccines are available worldwide to both higher-income and lower-income countries.”

Challenges to COVID vaccines through COVAX from concerns over AstraZeneca and Johnson & Johnson

A large portion of total vaccine doses expected in 2021 through COVAX is from AstraZeneca/Serum Institute of India and from Johnson & Johnson. AstraZeneca has had early production issues and the Serum Institute of India (which licenses the AstraZeneca vaccine for production) has curtailed exports in March and April (and possibly longer) because of the large increases in new COVID-19 infections in India and a redirection of production of vaccine doses for use in India. The AstraZeneca vaccine (from AstraZeneca and from the Serum Institute) constitute the bulk of doses expected in the first half of 2021 by COVAX and the Johnson & Johnson vaccine is expected to be a major supply source in the second half of 2021 as well as Novavax (either produced by Novavax or by license from the Serum Institute. However, both the AstraZeneca vaccine and the Johnson & Johnson vaccine have seen temporary stoppage of use by one or more countries flowing from a number of serious blood cot situations for patients who have taken the vaccine (causation under investigation). The AstraZeneca vaccine, which has been available for longer and under more scrutiny, has been limited in terms of age eligibility in a number of countries at this point. The AstraZeneca vaccine is the lowest priced vaccine (Novavax has an identical price to COVAX of $3.00/dose but is not yet approved). See UNICEF, COVID-19 vaccine market dashboard, https://www.unicef.org/supply/covid-19-vaccine-market-dashboard (prices). COVAX has a $3.00/dose ceiling price, so it is assumed that the Johnson & Johnson vaccine is similarly priced because of the pricing cap used by COVAX. With options, purchase agreements with COVAX have AstraZeneca/Serum Institute supplying some 700 million doses, Johnson & Johnson 500 million doses and Novavax (if approved) 1.1 billion doses. Id (COVID-19 vaccine supply agreements).

The challenge for COVAX and the low- and middle-income countries dependent on supplies from COVAX is the cost and availability of supplies if delays in shipments from the Serum Institute of India are prolonged or if there develops hesitancy in using vaccines which, while approved by many countries, carry some additional risk of serious blood clots. The prices recorded by the UNICEF data base show all other vaccines as significantly higher cost than the three supplying large quantities to COVAX. This suggests much larger financial needs to acquire the doses needed to address the “acute stage” of vaccination — 20% of populations representing health care and those at high risk — if COVAX must change sourcing for the major part of its vaccine doses. It also raises questions about the ability of other vaccines to fill the gap volume-wise in 2021 if major vaccines from AstraZeneca, Johnson & Johnson are not widely accepted or if exports are delayed for months out of India for each of AstraZeneca, Johnson & Johnson and Novavax (if approved).

While the event on Thursday will be focused on raising funds to meet the perceived needs of COVAX at the present time, those needs may be significantly larger in the coming months depending on developments.

Other funding and supply options

While the COVAX effort has been developed to handle the acute phase through contributions, the vaccination needs to get the world fully vaccinated are a multiple of the doses that COVAX is focused on procuring in 2021-2022.

The World Bank has earmarked $12 billion for vaccines and infrastructure for vaccinations for the world’s needy. Many low- and middle-income countries are working with suppliers directly or with Individual countries to obtain doses outside of the volumes expected from COVAX. Suppliers alone or in conjunction with governments have been working to license other producers and to ramp up production so that, depending on approvals of various vaccines, global production by the end of 2021 could be 10-15 billion doses. For example, the Quad countries (United States, Japan, India and Australia) have announced a plan to expand production in India to supply around one billion doses (2021-2022) to countries in the Indo-Pacific region paid for by Quad members and distributed by Australia. The UNICEF vaccine dashboard shows 6.9 billion doses of capacity of all vaccines under development or approved in the first half of 2021 increasing to 14.2 billion doses of capacity in the second half of 2021. See UNICEF, COVID-19 vaccine market dashboard, https://www.unicef.org/supply/covid-19-vaccine-market-dashboard (capacity). Thus, there should be significant additional capacity available later in 2021 for vaccine doses needed for low- and middle-income countries.

Similarly, it is likely that as major countries like the United States, Canada, the European Union, the United Kingdom and others get their populations vaccinated, there will be significant volumes of vaccines that have been bought by these countries that can be distributed to other countries in the last months of 2021 and in 2022.

Some of these efforts may be undertaken in consultation or conjunction with COVAX.

Conclusion

COVAX is an important effort at facilitating vaccinating large parts of the world against the COVID-19 pandemic, including many low- and middle-income countries. Many countries and the EU have led efforts in 2020 to increase funding for the effort. With the Biden Administration rejoining the World Health Organization and reengaging with multilateral organizations, and with the support of the U.S. Congress in funding U.S. contributions to COVAX, this Thursday’s event co-hosted by the United States and Gavi is an important chance to help COVAX receive the additional funding needed for its 2021 objectives.

Because the pandemic continues to be problematic around the world, there are many moving parts to a successful global vaccination effort including availability of vaccines, efficacy of vaccines including against new variants, ability to overcome vaccine hesitancy among portions of the population in many countries and the evolving understanding of human reactions to some of the vaccines available.

Greater cooperation among health administrators and the WHO would seem important to ensure that safe vaccines are not derailed because of discovered risks where the balance of benefits to risks strongly supports continued availability and use of the vaccines (with appropriate warnings). Where restrictions are appropriate, greater cooperation would permit a common approach versus differing restrictions which can only serve to cause confusion to the public and encourage vaccine hesitancy. COVID-19 reported cases globally are presently 137 million with deaths approaching 3 million. Vaccination doses administered globally are 806 million with serious adverse reactions and deaths quite limited (likely in the thousands globally). Serious adverse reactions and deaths if tied to vaccines are obviously a concern that should be addressed appropriately. However, eliminating vaccine availability to large portions of populations where there are not other options available risk far greater damage.

COVAX delivers COVID-19 vaccines to 100th country; India surge in infections likely to reduce product availability for COVAX through May and likely longer

Apress release from the WHO, Gavi, CEPI and UNICEF on the COVAX facility’s success in getting vaccines to 100 countries by April 8 is impressive news for the efforts of the WHO, GAVI, CEPI, UNICEF and their supporters to get vaccines to low- and middle-income countries as part of the effort to have vaccine distribution done equitably and affordably. See Press Relase from WHO, Gavi, CEPI, UNICEF, COVAX reaches over 100 economies, 42 days after first international delivery, April 8, 2021, https://www.gavi.org/news/media-room/covax-reaches-over-100-economies-42-days-after-first-international-delivery#:~:text=The%20milestone%20comes%2042%20days,Ghana%20on%20February%2024th.&text=Of%20the%20over%20100%20economies,Advance%20Market%20Commitment%20(AMC). The press release is embedded below.

PDF Embedder requires a url attribute COVAX-reaches-over-100-economies-42-days-after-first-international-delivery-_-Gavi-the-Vaccine-Alliance

While the release indicates that there will be delays in deliveries of vaccines in March and April because of increased COVID-19 cases in India, developments in India could mean an even greater delay in supplies than announced in March. For example, the major supplier of vaccines to COVAX in the first half of 2021 is the Serum Institute of India (“SII”) which is licensed by AstraZeneca to produce that vaccine in India for distribution in large part to COVAX. Yesterday, the president of SII indicated that export shipments could resume in June depending on cases levels in India. See Financial Times, India to restart Covid vaccine exports in June if local cases fall, April 7, 2021, https://www.ft.com/content/fcdffb8f-f86e-4bd9-adec-20256aeb0a07. It doesn’t appear that SII has notified COVAX of a further delay past April, but a June resumption, if it occurs, suggests that delays will continue through May at a minimum.

The situation for SII is complicated by a need for expanded capacity. It has sought $400 million from the Indian government to ramp up production from 71 million to 100 million doses per month by May. See Fierce Pharma, ‘Very stressed’ Serum Institute asks government for $400M vaccine production boost, April 8, 2021, https://www.fiercepharma.com/manufacturing/very-stressed-serum-institute-india-asks-government-for-vaccine-production-boost.

Moreover, the refusal of SII to export doses to the United Kingdom, to COFAX and others has become the basis for a legal notice from AstraZeneca. See Times of India, Covid-19: AstraZeneca sends legal notice to SII over delays in vaccine supply, April 8, 2021, https://timesofindia.indiatimes.com/india/astrazeneca-sends-legal-notice-to-sii-over-delays-in-vaccine-supply/articleshow/81960902.cms. SII is also finding itself refunding moneys paid by countries who are not getting supplies. See Reuters, Serum Institute refunds S. Africa for undelivered AstraZeneca doses, April 8, 2021, https://www.reuters.com/article/us-health-coronavirus-safrica/serum-institute-refunds-south-africa-for-undelivered-astrazeneca-doses-idUSKBN2BV1TI.

While COVAX is looking to expand sources of vaccines, SII is the major source through June. Professor Simon Evenett has put out a one page analysis of the implications for supply to COVAX from SII if the resumption of exports is premised on India fully vaccinating all those willing to be vaccinated for whom the government of India has opened up vaccinations. While SII has not stated that resumption of exports is tied to full vaccination of Indians who are 45 years or older, Prof. Evenett’s paper is an interesting analysis of how long a delay could occur in terms of SII becoming a major exporter again. His paper entitled “Vaccine Maths 2: Will India start exporting COVID-19 vaccines again in June 2021?” is embedded below.

Vaccine_Maths_2.pd_

Conclusion

With the spread of the new variants of COVID-19 that have higher rates of transmission and higher rates of serious infection, many countries find themselves facing increased numbers of cases and increased hospitalizations and deaths even as vaccine supplies are increasing and vaccination roll outs starting in many countries. There is a lot of attention within multilateral organizations such as the World Bank, IMF and WTO and by a number of countries on the needs for increased production and distribution to all countries. See, e.g., April 6, 2021, IMF April World Economic Outlook, IMF and World Bank Spring Meetings and U.S. efforts on global access to vaccines, https://currentthoughtsontrade.com/2021/04/06/imf-april-world-economic-outlook-imf-and-world-bank-spring-meetings-and-u-s-efforts-on-global-access-to-vaccines/. COVAX is an important part of the solution but it will need more funding and greater diversity of suppliers to meets its role in the equitable and affordable access to vaccines in 2021 and 2022.

Global vaccinations against COVID-19; developments and challenges in the roll-out for many countries

Globally there have been extraordinary developments of vaccines to help against the COVID-19 vaccine. UNICEF has set up a COVID-19 Vaccine Market Dashboard which notes that at present 14 vaccines have been approved by one or more countries, that the companies in production or testing vaccines report existing or intended capacity in 2021 of 21 billion doses (depends on other vaccines being approved and companies overcoming any bottlenecks in supply), indicates that there are 10.4 billion “secured vaccine doses”, that there are 3.56 billion doses “secured and optioned for the COVAX facility” and that prices in the market range from $2.06/dose to $44.00/dose. See UNICEF, COVID-19 Vaccine Market Dashboard, https://www.unicef.org/supply/covid-19-vaccine-market-dashboard (visited April 2, 2021). The dashboard contains a great deal of information looking at information on products, capacity, agreements, price and delivery.

The COVAX facility, administered by Gavi, put out in early March the first round of allocation of vaccine doses procured for low- and middle-income countries and others choosing to participate in acquiring through COVAX to improve equitable and affordable access for all. 142 of the countries participating in the COVAX facility were identified as allocated delivery of specific quantities of vaccine from a total of 237 million doses that were expected to be available to COVAX during the February – May timeline. See The COVAX Facility, First Round of Allocation: Astra Zeneca/Oxford Vaccine (manufactured by Astra Zeneca & licensed and manufactured by Serum Institute of India), https://www.gavi.org/sites/default/files/covid/covax/COVAX-First-round-allocation-of-AZ-and-SII.pdf . 87 of the 92 countries who will receive doses at no cost or reduced cost are included in the first round allocation (“AMC” countries). The March 2, 2021 document is embedded below.

COVAX-First-round-allocation-of-AZ-and-SII

In an April 1, 2021 update, Gavi notes that to date COVAX has shipped more than 33 million doses to 74 country. See GAVI, COVAX vaccine roll-out, https://www.gavi.org/covax-facility (visited April 2, 2021). While the ramp-up of deliveries to COVAX is scheduled to occur over time, COVAX received notice in late March of delays for shipments from India (Serum Institute of India) in both March and April, which COVAX has estimated could be a delay for as much as 90 million doses and indicated the delays were due to internal needs in India for more doses to support their own vaccination program. See UNICEF, COVAX updates participants on delivery delays for vaccines from Serum Institute of India (SII) and AstraZeneca, 25 March 2021,https://www.unicef.org/press-releases/covax-updates-participants-delivery-delays-vaccines-serum-institute-india-sii-and. The bulk of the press release is copied below.

GENEVA/NEW YORK/OSLO, 25 March 2021 – Deliveries of COVID-19 vaccines produced by the Serum Institute of India (SII) to lower-income economies participating in the COVAX Facility will face delays during March and April as the Government of India battles a new wave of COVID-19 infections. COVAX and the Government of India remain in discussions to ensure some supplies are completed during March and April.

“According to the agreement between Gavi and the Serum Institute of India (SII), which included funding to support an increase in manufacturing capacity, SII is contracted to provide COVAX with the SII-licensed and manufactured AstraZeneca (AZ)-Oxford vaccine (known as COVISHIELD) to 64 lower-income economies participating in the Gavi COVAX AMC (including India), alongside its commitments to the Government of India.

“To date, COVAX has been supplied with 28 million COVISHIELD doses and was expecting an additional 40 million doses to be available in March, and up to 50 million doses in April.

“COVAX has notified all affected economies of potential delays. SII has pledged that, alongside supplying India, it will prioritize the COVAX multilateral solution for equitable distribution.

“Participating economies have also received WHO guidance on optimizing the national deployment doses of the AstraZeneca-Oxford vaccine in a constrained supply environment.

“Separately, the COVAX Facility has informed participants allocated AstraZeneca-manufactured doses of the AstraZeneca-Oxford vaccine that some of the first deliveries due in March are now set to take place in April.

“In this early phase of COVID-19 vaccine roll-out, vaccine manufacturers require time to scale and optimize their production processes. AstraZeneca, which uses a novel supply chain network with sites across multiple continents, is working to enable initial supply to 82 countries through COVAX in the coming weeks.

“COVAX retains its objective of supplying initial doses of vaccines to all participating economies in the first half of the year before ramping up significantly in the second half of 2021. To date, COVAX has shipped vaccines to over 50 countries and economies.”

While there have been various manufacturing challenges in the early months of vaccine roll-outs, the decision by India to slow distribution of vaccine doses purchased by COVAX will clearly slow distribution to many least developed and developing countries dependent on COVAX for their vaccine doses. Since as much as a third of vaccine doses that COVAX has distributed have gone to India, the Indian government has what is at least a public relations challenge at the present time. See India Today, India received one-third of vaccines made for poor countries by India under COVAX programme: Report, 30 March 2021, https://www.indiatoday.in/coronavirus-outbreak/vaccine-updates/story/india-received-one-third-of-vaccines-made-for-poor-countries-by-india-under-covax-programme-report-1785242-2021-03-30. However, with a number of variants of the virus circulating widely and with infections increasing in many countries around the world, the delays are of concern to many governments with anxious populations looking for a path past the pandemic.

In a paper from Airfinity and the St. Gallen Endowment for Prosperity through Trade on March 31, 2021, an effort is made to look at the likely damage to low income countries from the announced delays in shipments to COVAX. See Simon J. Evenett and Matt Linley, Halting India’s Vaccine Exports: The Fallout, 31 March 2021. The paper estimates that the delays in shipments will push back achieving even minimum vaccinations by 60-90 days for many of the COVAX recipient countries. The paper is embedded below.

AF-SGEPT-TL1-31-March-2021-finalised

While there is a lot of positive news being reported (e.g., expansion of capacities and expected shipments in 2021, effectiveness of some of the existing vaccines against some of the new variants, agreement between the United States, Japan, India and Australia to generate one billion doses of a vaccine in India for distribution in the Indo-Pacific area in 2021 and 2022, and the United States hosting a funding effort for COVAX later in April to help close the funding needs for 2021 (after the U.S.’s $4 billion contribution)), delays for up to 90 million doses ( 37.97% of the total doses expected in the February – May 2021 time period by COVAX) to those dependent on COVAX is a significant challenge. See, e.g., Gavi, United States to host launch event for Gavi COVAX AMC 2021 investment opportunity, 29 March 2021, https://www.gavi.org/news/media-room/united-states-host-launch-event-gavi-covax-amc-2021-investment-opportunity; March 25, 2021, Global vaccinations for COVID-19 — continued supply chain and production issues and a new wave of infections in many countries delay greater ramp up for some until late in the second quarter of 2021, https://currentthoughtsontrade.com/2021/03/25/global-vaccinations-for-covid-19-continued-supply-chain-and-production-issues-and-a-new-wave-of-infections-in-many-countries-delay-greater-ramp-up-for-some-until-late-in-the-second-quarter-of-2021/; March 12, 2021, COVID-19 vaccines – U.S., Japan, India and Australia agree to one billion doses for Indo-Pacific countries, https://currentthoughtsontrade.com/2021/03/12/covid-19-vaccines-u-s-japan-india-and-australia-agree-to-one-billion-doses-for-indo-pacific-countries/; March 12, 2021, The 8-9 March  “Global C19 Vaccine Supply Chain and Manufacturing Summit” – efforts to ramp-up production, https://currentthoughtsontrade.com/2021/03/12/the-8-9-march-global-c19-vaccine-supply-chain-and-manufacturing-summit-efforts-to-ramp-up-production/.

The WTO Director-General Ngozi Okonjo-Iweala is planning a meeting on vaccines later in April that was described in a WTO press release as follows.

“DG Okonjo-Iweala also said that she plans to convene an event in mid-April to discuss ramping up COVID-19 vaccine production and how the WTO can contribute to a more rapid and equitable distribution of vaccines. 

“The event, to be held under Chatham House rules, will include all regional member groups, representatives from vaccine manufacturers from developing and developed countries, civil society groups working on access to medicine, and other relevant stakeholders.

“’The idea is to move us along on our quest to solve this unacceptable inequitable access of poor countries to vaccines,’ she said. ‘At the bottom of this is a very serious scarcity in supply. And how to solve it is to look at how we expand manufacturing in all its ways.’ 

“She stressed that the event would help advance global discussions on access to vaccines. She expressed hope both for increased vaccine manufacturing in the short- to medium-term, and a longer-term framework agreement that would provide for automatic access to vaccines and other medical products for developing countries in future health crises, including a way forward on the TRIPS waiver proposal many of them support.

“’We also need to look to the future and agree a framework where countries do not need to stand in the queue in order to get access to life-saving vaccines, therapeutics, and diagnostics,’ she said, emphasizing that this can be done while still incentivizing research and development.”

WTO, Director-General urges WTO members to deliver concrete results this year, 30 March 2021, https://www.wto.org/english/news_e/news21_e/dgno_30mar21_e.htm.

Conclusion

Governments are understandably focused on trying to end the pandemic at home as a first priority. The efforts of the WHO, Gavi, CEPI and UNICEF through the COVAX facility in recent years has provided a welcome source of hope for many nations for greater equity in distribution and in affordability of vaccines, including in the last year addressing the enormous challenge presented by the COVID-19 pandemic. Many countries and private groups have stepped up with major funding contributions to make vaccine available. Individual governments are also working to increase supplies globally. Many bottlenecks have arisen with the large number of inputs and the enormous increase in demand that has arisen over the last year. There is a need for continued efforts by governments and businesses to address the challenges and to see that the needs of the low- and middle-income countries can be met in a timely manner as well. While there will be a lot more production in the second half of 2021, there are and will continue to be challenges in the second quarter. Focus on identifying challenges and global cooperation to solve bottlenecks will do a lot to ensure greater global success in the remainder of 2021.

The EU’s response to challenges to its actions on COVID-19 vaccine exports

At the WTO General Council meeting held on March 1-2 this week, agenda item 9 was aimed at the European Union. The agenda item, entitled “Call to Prevent Export Restrictions on COVID-19,” was put on the agenda by Colombia, Costa Rica, Ecuador, Panama and Paraguay. I had reviewed this agenda item as one of 16 agenda items that was likely to draw a fair amount of attention. See February 26, 2021, WTO Director-General Ngozi Okonjo-Iweala’s first week on the job starts with a two day General Council meeting, https://currentthoughtsontrade.com/2021/02/26/wto-director-general-ngozi-okonjo-iwealas-first-week-on-the-job-starts-with-a-two-day-general-council-meeting/ (Agenda item 9 was added by Colombia, Costa Rica, Ecuador, Panama and Paraguay reflecting concerns by them (and presumably many other trading partners) about actions taken by the European Union to exert control over exports of vaccines from the EU in light of EU concerns about its own access to vaccines from manufacturers. See CALL TO PREVENT EXPORT RESTRICTIONS ON COVID-19 VACCINES, WT/GC/818 (18 February 2021)).

The new Director-General, Ngozi Okonjo-Iweala, has stressed the importance of the WTO doing more to address the COVID-19 pandemic and help Members recover. Equitable and affordable access to vaccines is an issue of importance to the membership and stressed by the Director-General. See, e.g., March 3, 2021, WTO Director-General opinion piece in the Financial Times and recent actions by the U.S., https://currentthoughtsontrade.com/2021/03/03/wto-director-general-opinion-piece-in-the-financial-times-and-recent-actions-by-the-u-s/; March 1, 2021, WTO Director-General Ngozi Okonjo-Iweala’s opening statement at the March 1 General Council meeting, https://currentthoughtsontrade.com/2021/03/01/wto-director-general-ngozi-okonjo-iwealas-opening-statement-at-the-march-1-general-council-meeting/

While the EU Ambassador provided comments on various agenda items, agenda item 9 was obviously one of importance to the EU. See EU Statement at the General Council of 2 March 2021 on the “Call to Prevent Export Restrictions on Covid-19Vaccines,” 02 March 2021, https://eeas.europa.eu/delegations/world-trade-organization-wto/94083/eu-statement-general-council-2-march-2021-%E2%80%9Ccall-prevent-export-restrictions-covid-19-vaccines%E2%80%9D_en. EU Ambassador João Aguiar Machado provided a detailed justification for the EU actions in imposing an export licensing/authorization regime on COVID-19 vaccines claiming lack of transparency by pharmaceutical companies and the need to ensure “fair” distribution. The EU program does not affect vaccines for COVAX low- and middle-income countries nor for various neighboring countries. Of note, for countries covered by the export licensing/authorization scheme, there have been 150 export requests all of which have been granted. The statement is embedded below.

EU-Statement-at-the-General-Council-of-2-March-2021-on-the-Call-to-Prevent-Export-Restrictions-on-Covid-19-Vaccines-–-02-March-2021-European-External-Action-Service

The EU stressed that the major problem facing the world was global capacity far below global demand. The EU is working to identify production bottlenecks and to encourage producers to license their products to maximize global production and expressed a willingness to work with other WTO Members and with the Director-General. The part of the statement covering the demand/supply imbalance is copied below.

“However, the root causes of the problem lie elsewhere: the exploding global demand is well above the global production today. As long as this global industrial challenge is not met, and the world population is not vaccinated quickly enough, we will all face a risk of a continuing health emergency including new Covid-19 variants and a prolonged economic crisis.

“The European Union believes there is an important role for public authorities to play and to drive the increase of production, and to facilitate access to the vaccines and other treatments that are in need today. Cooperation must be promoted amongst the different participants along the value chains where necessary to enhance production capacities. A closer, more integrated and more strategic public-private cooperation with the industry is needed. In this spirit, the EU has set-up a Task Force for Industrial Scale-up of COVID-19 vaccines to detect and help respond to issues in real-time. In order to ramp up production, we will, amongst others, work closely with manufacturers to help monitor supply chains and address identified production bottlenecks. Since EU vaccine production is critical for global supply, the benefits of this initiative will extend beyond the EU’s borders.

“Scaling-up of production on a global level requires further actions. It will not happen without increased global collaboration with the pharmaceutical industry, which should facilitate the transfer of the right know-how and technology for the highly complex vaccine production process. We should facilitate this collaboration, while also recognising that intellectual property provides the necessary platform for it to take place. Waiving intellectual property rights would disrupt this collaboration and the transfer of know-how. In conclusion, Mr Chairman, we believe it is legitimate to engage the sector in order to ensure that all complementary production facilities across companies and continents are actively contributing to ramp up production. Companies that have tried and failed to develop a vaccine of their own, for example, should actively consider making their facilities available for the production of vaccines of successful companies. Companies with new vaccines should consider whether they have checked all options for licensing agreements to increase production. The objective should be to ensure they enter into licence agreements with companies around the world that have the necessary production capacities and could export the vaccines to any low middle-income countries without production capacities. At the same time, we should be mindful that the manufacturing campaigns for covid-19 vaccines do not crowd out the production of other life-saving vaccines and therapeutics.

“The EU, working together with other WTO Members and under the leadership of the Director-General Dr. Ngozi Okonjo-Iweala is ready to facilitate a dialogue between the vaccine developers and companies with the production facilities that are ready to step in to help out with the production of vaccines and their delivery to the countries in need. We welcome the DG’s proposal to focus on collaboration among companies to enhance licensing in order to use all the adequate manufacturing capacity, including in developing countries. The EU is ready to facilitate this dialogue and contribute to the efforts on expanding these partnerships.

“The EU remains open to a dialogue with all WTO Members on how to facilitate the collaboration with the pharmaceutical industry on the transfer of know-how and technology. In the same manner, the EU remains open to a dialogue on how to facilitate the use of the TRIPS flexibilities, should the voluntary solutions fail or not be available. The flexibilities offered by the TRIPs Agreement are absolutely legitimate tools for Members in need, as many are in the midst of this pandemic. This includes fast track compulsory licences for export to countries without manufacturing capacity. Administrative burdens should not stand in the way of manufacturing and delivering vaccines to where they are needed.

“We believe that a successful contribution of the WTO to the current pandemic will require all WTO Members to agree on actions that will not only encompass the elements enshrined in the Ottawa Group’s proposal on Trade and Health, such as export restrictions or transparency, but also address the problem of insufficient manufacturing capacity. The EU stands ready to engage in such a dialogue.”

In my post yesterday, I reviewed some of the efforts that have already occurred where pharmaceutical companies are working with other companies to expand production and availability worldwide. See March 3, 2021:  WTO Director-General opinion piece in the Financial Times and recent actions by the U.S., https://currentthoughtsontrade.com/2021/03/03/wto-director-general-opinion-piece-in-the-financial-times-and-recent-actions-by-the-u-s/. But the articles referenced yesterday are just some of the collaborations going on as manufacturers with existing capacity work with companies with COVID-19 vaccines to help expand capacity and production and vaccine manufacturers work with contract producers to expand supply chain capabilities. An additional cooperation agreement was announced today in the press. In addition, some governments, including the U.S. and EU have also worked with manufacturers to ramp up production. See, e.g., Wall Street Journal, Novartis to Help Make CureVac Covid-19 Vaccine, March 4, 2021, https://www.wsj.com/articles/novartis-to-help-make-curevac-covid-19-vaccine-11614859271; Reuters, Poland strikes deal to produce Novavax COVID-19 vaccine, March 3, 2021, https://www.reuters.com/article/us-health-coronavirus-poland-mabion/poland-strikes-deal-to-produce-novavax-covid-19-vaccine-idUSKBN2AV19O (“Polish biotech firm Mabion has signed a preliminary agreement to manufacture Novavax’s COVID-19 vaccine with financial support from a state-run fund, as the government strives to accelerate its vaccination programme.”); PMLive, Novartis, Bayer announce separate agreements to bolster COVID-19 vaccine manufacturing, February 1, 2021, http://www.pmlive.com/pharma_news/novartis,_bayer_announce_separate_agreements_to_bolster_covid-19_vaccine_manufacturing_1362454#:~:text=Novartis%20and%20Bayer%20have%20announced,vaccine%20and%20CureVac’s%20vaccine%2C%20respectively.&text=Novartis%20will%20aim%20to%20begin,its%20site%20in%20Stein%2C%20Switzerland (“Novartis and Bayer have announced separate agreements to aid the manufacturing of Pfizer/BioNTech’s COVID-19 vaccine and CureVac’s vaccine, respectively.”); Pharmaceutical Technology, Pharmaceutical Technology-02-01-2021, Volume 2021
Supplement, Issue 1, Contract Service Tapped to Produce COVID-19 Vaccines, Page Number: s29-s30, https://www.pharmtech.com/view/contract-service-tapped-to-produce-covid-19-vaccines (reviewing actions by Pfizer/BioNTech, Moderna, Johnson & Johnson, AstraZeneca, Novavax). Expanding supply also requires vaccines being approved by governments for use. The EU recently announced it was beginning review of the Russian vaccine Sputnik V. See The Globe and Mail, Europe starts review of Russia’s Sputnik V vaccine to try to overcome shortages as new variants appear, March 4, 2021, https://www.theglobeandmail.com/world/article-europe-starts-review-of-russias-sputnik-v-vaccine-to-try-to-overcome/. And, of course, major producers are expanding where they are producing their vaccines using existing or new facilities. See, e.g., The Globe and Mail, Novavax publishes COVID-19 vaccine contract with Canada, March 4, 2021, https://www.theglobeandmail.com/canada/article-novavax-publishes-covid-19-vaccine-contract-with-canada/ (“American pharmaceutical company Novavax has published its vaccine agreement with Canada for 52 million doses of its COVID-19 vaccine. The company expects to eventually produce some of the vaccine in Canada.”).

Thus, a great deal is going on to expand production capacity globally. Strong intellectual property laws are critical to the developments and resource commitments being made. While many developing countries are pushing to start a process of text drafting for a TRIPS waiver at the WTO, such an effort would be counterproductive to global health needs over the longer term. Washington Trade Daily’s March 2, 2021 edition at pages 5-7 has an article entitled “Call for TRIPS Waiver Negotiations” which presents the views of largely developing countries on the desire to move to negotiating text even though there is not agreement on the proposed waiver. See Washington Trade Daily, March 2, 2021, https://files.constantcontact.com/ef5f8ffe501/ed93e180-7dee-4beb-8629-0e73d4d0ea5c.pdf.

The U.S. Chamber of Commerce released a statement on March 2nd characterizing the effort for a TRIPS waiver being promoted by India, South Africa and others as “misguided”. See U.S. Chamber, U.S. Chamber Statement on Proposed WTO IP Rights Waiver, March 2, 2021, https://www.uschamber.com/press-release/us-chamber-statement-proposed-wto-ip-rights-waiver. The statement is copied below (emphasis added to the third paragraph).

WASHINGTON, D.C. – The U.S. Chamber of Commerce’s Global Innovation Policy Center (GIPC) issued the following statement from Senior Vice President Patrick Kilbride regarding the World Trade Organization (WTO) General Council’s discussion of a proposed waiver of intellectual property (IP) commitments in the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement. 
 
“‘Vaccine distribution is critical for ending the pandemic and reviving the global economy. The U.S. Chamber of Commerce welcomes the WTO General Council’s discussion of the role of intellectual property rights in defeating the COVID-19 pandemic. During this time, transparent and predictable intellectual property rights have formed the legal and economic basis for an unprecedented level of highly successful collaborations between government, industry, academia and NGOs. 
 
“‘The Chamber supports decisive and bold action to remove regulatory and trade barriers in order to boost the global distribution of treatments and vaccines, including support of global vaccine programs such as COVAX. Proposals to waive intellectual property rights are misguided and a distraction from the real work of reinforcing supply chains and assisting countries to procure, distribute and administer vaccines to billions of the world’s citizens. Diminishing intellectual property rights would make it more difficult to quickly develop and distribute vaccines or treatments in the future pandemics the world will face.  
 
“’The ‘3rd Way’ proposed by incoming WTO Director General Ngozi Okonjo-Iweala to encourage licensing agreements is worthy of further discussion and consistent with the ongoing success of government-industry efforts to bring an end to COVID-19 as rapidly and as safely as possible.’”

Conclusion 

While there has been a lot of concern among trading partners about the EU action in imposing export licensing of COVID-19 vaccines, to date the licensing system does not appear to have caused problems in fact in the distribution of doses ordered by the group of countries covered by the new system. Moreover, with or without government encouragement, vaccine producers have been working to expand production through arrangements with other vaccine producers, through working with contract manufacturers, and by expanding facilities and internal capacities.

There is no doubt that the COVID-19 pandemic presents a once in a century global health pandemic with demand at the beginning far outstripping supply. Governments have a role to play working with producers, suppliers, those involved in distribution and applying the vaccines to address bottlenecks, to provide encouragement and incentives to rapidly expand production and to support the efforts of the WHO, GAVI, CEPI, and UNICEF to fund the needs of COVAX. While concerns in the early days of vaccine rollout are understandable, COVAX has contracts with a number of vaccine producers and others under negotiation or awaiting approval. AstraZeneca, the first vaccine producer with a contract to supply COVAX put out a press release on March 2, 2021 which is copied in part below. See AstraZeneca, AstraZeneca advances mass global rollout of COVID-19 vaccine through COVAX, March 2, 2021, https://www.astrazeneca.com/media-centre/press-releases/2021/astrazeneca-advances-mass-global-rollout-of-covid-19-vaccine-through-covax.html.

Supply to 142 countries underway as part of the unprecedented effort to bring
broad and equitable access to the vaccine

“AstraZeneca with its partner Serum Institute of India
will be the biggest initial supplier to COVAX
 

“The first of many millions of doses of AstraZeneca’s COVID-19 vaccine have begun arriving in low and middle-income countries across the world through the multilateral COVAX initiative, the first steps in fulfilling the Company’s efforts to provide broad and equitable access to the vaccine.

“First COVAX shipments were dispatched late last week to Ghana and Cote D’Ivoire, and more are due to begin arriving this week in countries including the Philippines, Indonesia, Fiji, Mongolia and Moldova. This supply represents the first COVID-19 vaccine for many of these countries.

“Further shipments will arrive in the coming weeks with the aim of supplying a total of 142 countries with hundreds of millions of doses of the vaccine in the coming months. The majority of these doses, manufactured by AstraZeneca and its licence partner Serum Institute of India, will go to low and middle-income countries.

“Pascal Soriot, Chief Executive Officer, Astra Zeneca, said: ‘These first steps towards fulfilling our broad, equitable and no-profit emergency response to the pandemic mean millions of people, irrespective of their country’s income level, will soon be protected against this deadly virus. This is a moment of great pride for us at AstraZeneca and I am extremely grateful to our partners including Gavi, CEPI and Oxford University for their hard work and dedication in order to make this humanitarian ideal a reality for many millions of people around the world.’

“Seth Berkley, Chief Executive Officer, Gavi, said: ‘Global, equitable access to COVID-19 vaccines is only possible when the public and private sectors work together. When we launched the Gavi COVAX Advance Market Commitment in June 2020, our first Agreement was with AstraZeneca. Nine months later, the first doses are already being delivered to those that need them most. This is the beginning of COVAX’s effort to end the acute phase of the pandemic, not the end, but we can all take strength from this moment and I thank AstraZeneca and the University of Oxford for their support and partnership at every step of our journey.’

“Vaccine shipments have been allocated according to the COVAX Allocation Framework which determines volume per participating country based on a number of factors, including country readiness, national regulatory authorisations and national vaccination plans in place. The supply through COVAX follows the recent Emergency Use Listing by the World Health Organization (WHO) for active immunisation in individuals 18 years of age and older, which provides a vital and accelerated pathway to enable supply.

“AstraZeneca was the first global pharmaceutical company to join COVAX in June 2020 in line with the Company’s shared commitment to global, equitable access to vaccines.

“The vaccine can be stored, transported and handled at normal refrigerated conditions (2-8 degrees Celsius/36-46 degrees Fahrenheit) for at least six months and administered within existing healthcare settings.”

The “third way” sought by the WTO Director-General has been underway for some time and is picking up speed as vaccines start to be approved. There are an increasing number of announced agreements among producers to work together to expand production of particular vaccines. Thus, collaboration and cooperation among producers has and is occurring. Governments can help by identifying bottlenecks in all areas relevant to raw materials, intermediate products, finished vaccine doses, distribution and resources to apply the vaccines and helping to resolve the bottlenecks; by encouraging increased ramp ups of capacity and production, including through licensing.

A broad waiver of TRIPS obligations as being pursued by India, South Africa and many other developing and least developed countries is unwise, unlikely to be agreed to, and if implemented, will backfire in terms of global cooperation in getting the world’s population vaccinated and will destroy the likelihood of private sector engagement to solve future pandemics. The EU’s approach as laid out in EU Ambassador João Aguiar Machado’s statement on March 2 is likely the best course forward whether through the WTO or otherwise.