/ 14 January 2021

Khaya Sithole: World needs a shot in the arm, not its own foot

Covid 19 Vaccination Campaign Begins In Belgium
Economic immunity: Belgian Jos Hermans, who is 96 years old, received a Covid-19 vaccine in late December, way ahead of any schedule citizens of poor countries can expect. But the global economy cannot return to normal until most people worldwide have been vaccinated. Photo: Jasper Jacobs/Getty Images

Just over six months ago, as South Africa lived through the horrors of the first wave of the coronavirus pandemic, the World Health Organisation (WHO) published its initial draft of the vaccine rollout plan under the Covax initiative, which was created to foster collaboration among different countries in pursuit of a solution to the healthcare crisis. 

The rationale was that although most if not all countries were affected by the pandemic, many did not have the financial or institutional capacity to negotiate solutions independently. 

The WHO, representing the majority of the world’s nations and funded by a combination of voluntary and compulsory contributions, represented the only opportunity for some countries to stand a chance of accessing vaccines. 

The primary dilemma it sought to address was what would happen if countries with high infection rates did not have the financial resources to participate in vaccine roll-out programmes. 

The secondary issue related to the dominance of the “local” political agenda, where each country sought to solve its domestic healthcare crisis first before considering assisting other affected countries. 

The creation of the Covax programme had multiple aims. The main goal was to pool resources to fund clinical trials across the globe to speed up the quest for a vaccine. Additionally, by representing a cross-section of the rich and the poor, the Covax alliance was best placed to facilitate equitable distribution based on factors like population size and infection rates rather than economic and political capital.

Even if wealthy countries are immune to the virus, they will not be immune to the economic losses of other economies being unable to get started again

Dr Suerie Moon

The unavoidable tension underpinning the initiative was down to the simple fact that no guarantees existed about which vaccine trial(s) would succeed. In other words, Covax may have found itself allocating resources to trials that would ultimately not be approved. In order to mitigate that risk, Covax hedged its bets by supporting multiple trials with the hope that most — if not all — would eventually succeed. 

The practice of backing multiple trials amounts to a hedging of the risk. The approach was not unique to Covax. Richer countries, in a position to participate in Covax and also initiate direct negotiations with manufacturers, put resources into Covax and many other trials. The benefit of that hedging was the ability to benefit from the Covax programme while also enjoying direct access to successful vaccines. 

A secondary element of the hedge related to the unknown variable — the actual cost of vaccines from different suppliers. In an ideal world, the WHO would have committed greater resources to trials that showed promise and also came with a promise of low prices. The low-cost vaccines would enable the WHO’s limited resources to reach many more nations in distress.

Covax’s commitment to equitable distribution resulted in the recommendation to gradually roll out vaccines across participating nations using population sizes and infection rates as primary variables. The effect of that approach would be an equitable rollout that was not necessarily aligned to the political pressures and considerations of various countries. 

The WHO’s limited funding hampered its capacity to reach the desired agreements with manufacturers. Its estimated funding requirement — $7-billion — is still running short and, in the absence of additional funding, makes the Covax project a risky endeavour, especially for countries that have not secured alternative deals.

South Africa’s approach of placing its hedge primarily with the Covax alliance is now the subject of criticism because of the rapid rise in infections during the second wave. A unique feature of the South African case is that we participated in clinical trials and have manufacturing capacity. Remarkably, however, such factors do not seem to have translated into vaccine access as we haven’t leveraged our participation and manufacturing capacity to negotiate proactively. 

Having understood the risks associated with the Covax hedge and the need to have an alternative in mind, one would have expected the South African negotiators to find more persuasive ways of securing the country’s timely access to vaccines. The payment that was eventually made by the South African government to the Covax facility pales in comparison to the investment required to address the local crisis.

The Covax approach was unfortunately replicated at national level by countries that have greater resources than the WHO. Canada signed up as a member of Covax but also went on a drive to secure direct deals with the various vaccines on trial. As a result, the commitments made to Canada by the trials that have been approved will see the country receive enough vaccines to inoculate its entire population more than five times. 

Canada’s gamble — backing as many potential vaccines as possible — has resulted in the unintended effect of hoarding. The practice that sees countries with means acquiring and holding on to vaccines — even more than they need — is a repetition of the practice seen more than 10 years ago during the outbreak of the swine flu. 

Back then, countries such as the US acquired the majority of available vaccines, to the detriment of the rest of the world. The primary instruments then (and again now)were advance purchase agreements that gave manufacturers guarantees their vaccines would be bought once approved. 

That assurance of financial security provides comfort to manufacturers, reduces financial risk and enables more comprehensive trials to be conducted. The importance of financial security has been evident in the fast pace of the vaccine development process, which has resulted in approvals being granted at a record pace.

The hoarding effect creates enduring problems. 

At this stage, it remains unclear whether the vaccine doses will be once-off or a recurring treatment. That anxiety creates an incentive for countries to hold on to rather than pass on whatever vaccines they have secured. Countries that have limited means have to depend on manufacturers being able to produce doses at a rate that covers their pre-existing commitments and also cover new requests from poorer countries. 

The one advantage of being late in the game is that resources can be directed towards fewer, tried-and-tested vaccines rather than the gamble witnessed in initial stages. The problem, however, is that being late in the game results in a piling-up of casualties from the virus.

One way to break the deadlock is for countries that have manufacturing capacity to be allowed to initiate domestic production outside of the value chain of the patent owners. This has been proposed by India and South Africa, which argue that this approach is justified in times of crisis. 

Opponents of such an approach argue patent protection is a fundamental requirement for the pharmaceutical industry to thrive. The stated fear is that once patent protection is abolished in this case, the incentive for companies to invest in research and development of future drugs will permanently be compromised. 

In the absence of a resolution to the patent question, the countries that find themselves at the back of the queue will have to depend on the benevolence of individual manufacturers. The evidence so far indicates that such acts of benevolence are elusive. What remains clear, however, is that the nature of this pandemic is so intersectional it will be impossible for the global economy to recover until the majority of the globe can access vaccines. 

The Rand Corporation estimates that if only wealthy and vaccine-producing nations have access to the vaccines, the world economy would lose $292-billion in value. As Dr Suerie Moon of the Global Health Centre stated: “Even if wealthy countries are immune to the virus, they will not be immune to the economic losses of other economies being unable to get started again.”

The next challenge for global and healthcare leaders is to find an equitable balance between the protection of the industry, whose expertise will soon be called upon to find new solutions, and the protection of the citizens of the world, whose existence is fundamental to the viability of the industry itself. 

Delays resulting in a loss of life across the world will stall economic output and lead to a reversal in many socioeconomic gains seen over the past few decades. In the absence of proactive solutions, the socioeconomic impact of the pandemic will linger on long after the last individual has been vaccinated.