Khaya Sithole: The perils of vaccine nationalism

Exactly five years ago this week, one of the largest property deals in the world took place in India. Lincoln House — a massive mansion Mumbai used by the United States government as its consulate until 2011 — was sold for $113-million. The building has a history of famous tenants. Its immediate previous owner — the maharaja of Wankaner — was an aristocrat whose sale of it in 1957 paved the way for its occupation by the US government under a 999-year lease.

The “buyer” of the property — Cyrus Poonawalla, who acquired it as his weekend home — is one of India’s richest men and the founder of the company that may turn out to be the most important private entity in the world today.

Back in the late 1960s, Poonawalla established the Serum Institute of India, which actually began as a shed on the family horse farm. Over the past 50 years, the company has grown to be the biggest producer of medical vaccines in the world, with revenues of about $800-million and facilities that are able to provide 1.5-billion doses of medicines of various types on an annual basis for use in more than 170 countries. 

An important feature of Serum is its commitment to making its products available and affordable, to developing and poor nations in particular. According to the New York Times, half of the world’s children have been vaccinated with Serum’s products. Its scale and capacity to produce medical vaccines is unmatched by any other company in the world. It is this reality that has put the company at the centre of the emerging tensions around the scramble to find a vaccine for the coronavirus.

As countries across the world have seen their economic activity decline and healthcare systems become overwhelmed by the effects of the virus, the need to find a medical solution has become more critical with every passing day. The problem is that the processes progress at a pace that is far too slow for a crisis of this nature. 

These processes — involving some innovation and acumen from scientists, the benevolence of citizens willing to participate in the clinical trials and the competence of regulators responsible for assessing effectiveness — are an unavoidable feature of the quest to find a solution. The primary risk that needs to be managed at all levels, is simply that of rushing the process and approving a vaccine whose effectiveness is suboptimal.

The consequence of that, would not only be a failure to arrest the spread of the coronavirus itself, but also create the possibility of new healthcare complications emerging. Last week, one of the more promising trials — involving Oxford University and AstraZeneca, was abruptly halted when one of the participants developed an “adverse event”. 

The immediate fear was that the illness resulted from the vaccine currently on trial. Had that been the case, then the prospects of that trial continuing as planned would have diminished. As it turned out, the isolated incident was not regarded as an indication of problems relating to the vaccine on trial, and the process resumed this week.

More haste, less speed

However, through all of that, a small incident occurred highlighting the risks associated with the current desperate quest for a solution. The Serum Institute of India has committed to producing doses of the Oxford-AstraZeneca vaccine, should it clear regulatory approvals. The current pandemic has increased social and political pressure on regulators to not be seen as stumbling blocks in the search for a solution. 

Such pressures — if not managed properly — may lead to premature certification of vaccines that add to, rather than solve, the healthcare crisis. After the Oxford clinical trial was suspended, Serum had a duty to inform the Indian regulators of this development and failed to do so. That oversight has no place in projects of this nature, in which the vigilance of all stakeholders is critical.

Nevertheless, this alliance, involving leading institutions in research, pharmaceuticals and production, is the type of partnership the world needs. However, it also runs the risk of elevating expectations to unrealistic levels. The success rate of vaccines that are conceptualised and eventually cleared by regulators, is notoriously low. In a study published in 2013, Esther Pronker referred to a productivity gap that exists in the pharmaceutical industry. 

This gap is defined as a situation in which the invested resources within an industry do not match the expected product turnover. Data from 1998 to 2009 indicates that the average time for the development of a vaccine is 10.71 years. But even more alarmingly, the market entry probability for a vaccine is only 6%. In other words, not only is the process of developing a vaccine slow and expensive, the prospects of success are disappointingly low. Serum’s gamble of committing to production and investing in additional capacity before a vaccine is actually approved is a rare step that indicates an intersection between huge faith and deep pockets.

The politics of distribution

There are currently more than 160 vaccines in various stages of development across the world. Statistically, a chance exists that a solution will be found. The problem, however, is the question of how the vaccine will be funded and distributed once it exists. For companies like Serum, the question of mass production is linked to how to fund expansion and distribute the vaccine. 

As a company based in India, there is an expectation that Serum will prioritise India in its distribution. Its chief executive — Adar Poonawalla — has stated that half of the doses produced by Serum will be for the Indian market and the rest made available to the open market. Additionally, the company aims to produce the vaccine at no more than $3 per dosage. These commitments go a long way towards answering the key questions of access and prioritisation. 

As the healthcare crisis persists and decimates economies, the ability to afford the vaccine is emerging as the new crisis long before a vaccine is even found. For poorer nations — crippled by years of underinvestment in healthcare infrastructure and weak bargaining power in economic matters — the prospect of being condemned to the back of the vaccine queue is a persistent threat. 

This is amplified by the fact that whichever country finds the solution first has to consider the political and social dimensions of the healthcare of its own citizens, alongside the health and welfare of the world at large. For countries run by politicians treading on fragile ground, the propensity of providing access to their own countries first before lending a hand to the rest of the world is an unavoidable possibility.

The rise of resource nationalism

In March 2020, at the outset of the pandemic, Indian Prime Minister Narendra Modi banned the exports of up to 26 drugs to avoid disruptions in its pharmaceuticals industry value chain. US President Donald Trump — as expected — sought to persuade companies to speed up the process of getting a solution for Americans through Operation Warp Speed. These episodes were the earliest indications of the rise of resource nationalism, through which countries seek to prioritise their own citizens. 

The rationale adopted by proponents of vaccine nationalism is premised on the theory that whoever funds the development of the vaccine, deserves a first bite at the solution. Paul Hudson, the chief executive of the French vaccine maker Sanofi, stated in May that the US would get the vaccine ahead of the rest of the world because it backed early research initiatives.

Some governments are actively entering into such arrangements in principle. The United Kingdom government spent $86-million on the Oxford study and now expects 30-million doses to be reserved for it. Trump, for once, doesn’t need to extend himself much to achieve the same outcome. In 1950, as the US was engaged in the Korean War, the Defense Production Act, which allows the US government to jump the queue in procurement, was passed. Since March, he has already invoked the Act in relation to ventilators and the production of surgical masks.

Health concerns must be a priority

The effect of these actions is that the distribution of the vaccine may end up being determined by the sheer fortunes of geography and economics. India’s trump card is being the host country to the biggest production facility. Rich countries are using their economic muscle to power through the pandemic by placing orders for possible vaccines across all promising trials. 

The consequence of this approach is that the distribution will occur along the lines of economics and politics rather than science. Given the intersectionality of global supply- and economic-value chains, any solution that prioritises countries based on anything other than healthcare considerations, will mean that all countries remain at risk for as long as some countries are excluded from the solution.

But long before we get there, there are multiple hurdles that need to be conquered. The hope is that in India, where so much of the world’s fate now rests, the traditional red tape will not be the impediment that delays the processes. But, as Poonawalla knows — Indian bureaucracy is not exactly defined by a sense of urgency. 

Nine years after the Americans put it on sale and five years to the day he put his offer to buy Lincoln House, he is still waiting for the transaction to be concluded. The main reason — no one seems to know where the documentation proving provenance of the mansion can be found. 

If that is to be the type of chaos that prevails at the time of the vaccine distribution, we need to keep looking for better solutions.

Khaya Sithole — chartered accountant, academic and activist — writes regularly for the M&G and discusses the issues raised in his columns on his Kaya FM show, On The Agenda, every Monday from 8pm to 9pm