How the complexities of vaccine funding, procurement and distribution could hamper equitable access for vulnerable populations

By Jonathan Bey

As we approach the end of 2020, we see many headlines about vaccine approvals and, in the same breath, hopeful reports of an imminent recovery. According to the New York Times’ Coronavirus Vaccine Tracker, six vaccines have received early or limited use in China, Russia, and the United Arab Emirates. Additionally, the vaccine developed by Pfizer and BioNTech has received full approval in Canada and emergency approval in the United Kingdom.

But this is only the beginning. In the coming year, the world will require billions of doses to be reviewed, approved, manufactured and distributed. At NEI Investments, we’ve been speaking with top pharmaceutical companies developing vaccines, including Pfizer, AstraZeneca, and Merck & Co., as part of our corporate engagement work. A key topic of our ongoing dialogues is the need for equitable global access. These companies have shown a willingness to listen to stakeholders and make various commitments around equitable access to medicines.

Understanding vaccine development risks

While pharmaceutical companies play a key role in providing equitable access, there are structural challenges to the fair and equitable global distribution of vaccines. There’s a high level of risk linked to expensive development costs and market uncertainty, which means companies must take steps to manage their risk.

Since early on in the pandemic, governments and international bodies have supported pharmaceutical companies by promising to buy their vaccines, if successfully produced. This is done through an innovative financing mechanism called an Advanced Market Commitment (AMC), which has been used to develop Pneumococcal vaccines. While promising, it has yet to be fully utilized for other widespread communicable diseases — until now.

Challenges with procuring and distributing vaccines

One of the challenges that’s emerged is the lack of cohesion between bilateral and multilateral AMCs. Bilateral AMCs are agreements between a single country and a vaccine manufacturer, such as the widely reported news that Canada signed agreements with Pfizer and Moderna in the summer for millions of COVID-19 vaccines. Those are relatively straightforward. It gets complicated with multilateral AMCs, because these are procurement agreements between an international body representing a group of countries and a group of vaccine manufacturers.

An example of this is COVAX, the global procurement and distribution effort of GAVI (the Global Vaccine Alliance), the Coalition for Epidemic Preparedness Innovations and the World Health Organization. COVAX has focused on providing COVID-19 vaccines to those who need them most, starting with the world’s most vulnerable populations. COVAX can procure potential vaccines from one of its 18 different manufacturers to supply to high-income, middle-income and low-income countries through multilateral deals as soon as the vaccines become available.

While AMCs have helped speed vaccine development, they may also inhibit equitable global allocation, especially in the acute phase of the pandemic. That’s where we have concerns — and it’s the reason we’ve been talking to leading pharmaceutical companies. In the past, almost all major vaccines have provided significantly higher coverage in high-income countries compared to middle- and low-income countries. Here’s how bilateral agreements may perpetuate the same historical outcomes:

  • When countries negotiate deals separately, this reduces the flow of financing through international bodies, which typically comes from high-income countries and helps subsidize vaccination coverage in middle and low-income countries. While COVAX isn’t intended to supply all vaccines globally, the flow of funds into other agreements has left COVAX short of the funding it needs to distribute 2 billion vaccines.
  • Bilateral deals are designed to provide a fixed number of vaccines to one country, irrespective of total inventory. Fulfilling vaccine orders may not align to fluctuating needs, especially during the pandemic’s acute phase, when vaccines need to be distributed to the most vulnerable populations. During the acute phase, COVAX offers a distribution model that aims to provide all vulnerable people with priority access to vaccines.

Although there are conflicts between bilateral and multilateral AMC deals, they’ve both risen to prominence because they fulfill a pressing need — whether that’s creating certainty in vaccine supplies for countries, or providing vaccine manufacturers with market certainty. These mechanisms are useful tools for advancing vaccine development now, and in the future. However, it’s important that we go beyond broadly supporting all AMCs. The pandemic has shown us that significant funds can be attached to AMCs, leading to an increased magnitude of impact.

What can we learn from this experience? That it’s important to strike a balance. In the future, AMCs for communicable diseases with global reach should have a stronger, more coordinated global response, particularly in the acute phase, to prioritize access for vulnerable populations. AMCs that operate outside of the acute phase remain valuable by allowing countries to maintain a flexible approach. However, all stakeholders must work together to achieve a balance between supporting pharmaceutical companies, which need innovative funding models to develop vaccines, and working with international bodies, which need a flow of funds to deliver vaccines to vulnerable populations. Both are equally necessary for a fair and equitable global response.