As the COVID-19 pandemic has showcased, the poorest parts of the world are too often last in line for lifesaving vaccines. Sadly, disparities like this are as old as vaccination itself—and money is at the heart of the problem.
When the poorest are inherently marginalized within the global market system, can equitable vaccine access ever be achieved?
At PATH, we think it can, which is why we work with global health partners, vaccine suppliers, and countries to support vaccine financing strategies that cultivate healthier vaccine markets to get there. Here to explain is PATH’s director of vaccine financing and partnerships, Hannah Kettler, PhD.
Q. What is global vaccine financing all about?
A. Using different financing and economic strategies can help mitigate drivers of vaccine inequity. There are a few key forces driving the inequity.
To start, the business of developing and producing vaccines is financially risky for companies. For this reason, products that are projected to have good return on investment get prioritized. Vaccines are designed, prices are set, and supply volumes are calibrated for high-income markets, which are best poised to deliver the desired returns.
Consequently, vaccine needs in countries with less buying power are more likely to be neglected. Oftentimes, vaccines for diseases mainly affecting lower-income parts of the world don’t even get developed if left to natural market forces. Malaria—a historically low-priority disease for vaccine suppliers—is a good example. It took many public-private partners (including PATH) working against the odds for decades to bring the first-ever World Health Organization (WHO)-recommended malaria vaccine to fruition. Other vaccine characteristics that are typically necessary in low-income economies, such as affordable pricing, suitability, and deliverability, also tend to be deprioritized.
With fewer public health resources to work with in these communities, demand for vaccines hinges even more greatly on how cost efficient they can be as compared with other health care priorities. As a result, even efficacious vaccines may not be prioritized by countries.
With strategic financing tools, we can create supply and demand incentives for companies, governments, donors, and other stakeholders to prioritize making and using affordable and deliverable vaccines. The goal? Vaccine access for everyone—regardless of geographic location or ability to pay.
Q. How do vaccine financing tools work?
A. The secret to success is partnership. The goal is to bring vaccine stakeholders together in new ways. For long-lasting change, financing tools must find a mutually beneficial sweet spot that serves business AND public health goals.
Some tools have a “push” effect, whereby public and/or nonprofit institutions share the costs and risks of vaccine development and production with vaccine manufacturing companies. In exchange, the manufacturers commit to make their products globally accessible at affordable prices.
Product development partnerships do this. For example, the collaboration between PATH, WHO, and Serum Institute of India Pvt. Ltd. developed a meningitis A vaccine (MenAfriVac®) at the request of health ministers in sub-Saharan Africa. At US$0.50/dose, MenAfriVac has eliminated epidemic meningitis A everywhere it has been used.
In another example, PATH supported the development and market entry of two Indian-made rotavirus vaccines: ROTAVAC® (just $1 per dose) and ROTASIIL® (which is heat resistant and easier to transport). These new products expanded vaccine availability for the leading cause of severe and fatal diarrhea in young children worldwide.
“The pandemic has changed vaccine financing, but vaccine financing has also changed the pandemic.”— Hannah Kettler, PhD, Director of Vaccine Financing and Partnerships,
Other tools “pull” suppliers into neglected markets. For-profit companies take development and manufacturing investments at risk in exchange for greater market (or revenue) certainties or guarantees, usually backed by donor funds.
Gavi, the Vaccine Alliance’s pilot Pneumococcal Advance Market Commitment (AMC) is a flagship example. It pulled the original two pneumococcal vaccine producers to increase manufacturing capacity dedicated to low-income markets. The AMC used donor funds to pay a mark-up on the price of a set percentage of volume in exchange for a discounted price of no more than $3.50 per dose for low-income economies over a ten-year period.
This approach helped accelerate rollout to 60 countries that would otherwise not have had access to pneumococcal vaccines. A third supplier supported by PATH recently joined the AMC at just $2 per dose, improving affordability even more.
Beyond push and pull, global health partners and donors have invested in “leveling the playing field,” whereby the costs of participating in low-income markets for all manufacturers is lowered. One example includes efforts to harmonize regulatory approval pathways.
Q. Has COVID-19 changed vaccine financing?
A. Yes, the pandemic has changed vaccine financing, but vaccine financing has also changed the pandemic.
The global collaboration we’ve seen is unprecedented. Most notably, COVAX, a multilateral initiative co-led by Gavi, WHO, and the Coalition for Epidemic Preparedness Innovations, is advancing equitable global access to COVID-19 vaccines. Its procurement arm, the COVAX Facility, is facilitating access to a portfolio of COVID-19 vaccines—for both self-financing and donor-supported countries. I’ve had the privilege of supporting this effort as part of the Gavi-led team designing and implementing it.
COVAX aims to motivate manufacturers to prioritize vaccines for COVAX participating countries, especially low-income countries. A donor-supported COVAX AMC fund provides dedicated funding for the 92 lower- and middle-income economies. Using this funding combined with contributions from self-financing participants, COVAX negotiates advanced purchase agreements, leveraging the scale of the demand-assured market to secure the best prices and positioning for doses.
It’s a bold approach that is working in many respects. As of late September 2021, COVAX had shipped more than 311 million vaccines to 143 out of 190 participating countries. Still, by many metrics, progress is too slow.
As of September 8, only 20 percent of people in low- and lower-middle-income economies had received a first dose of vaccine, compared to 80 percent in wealthier countries. This is thanks to export bans, production challenges and disruptions, regulatory approval hurdles and delays, and manufacturers and many high-income countries prioritizing bilateral deals. We must address these obstacles if we want to reach COVAX’s goal of delivering more than 2 billion doses and ending the acute phase of the pandemic.
Q. What’s the outlook for the future?
A. Everyone deserves to survive this pandemic. This experience has reinforced what we already knew—that we can’t rely on markets to allocate vaccines equitably with the necessary urgency required in a pandemic.
We can and must do better.
With an eye on preparedness for the next pandemic, we will not have to start from scratch. The COVID-19 response took advantage of existing global health financing tools, institutions, and ecosystems that were already in place pre-pandemic. Now, we can build on COVAX and other COVID-19 institutions and learnings to address future crises more swiftly.
“We can’t rely on markets to allocate vaccines equitably with the necessary urgency required in a pandemic.”— Hannah Kettler, PhD, Director of Vaccine Financing and Partnerships
Most of all, we must preserve our biggest asset, which is the culture of worldwide collaboration that’s continuing to build as we speak. Only by working together can we end this pandemic and head off future ones.
For more information on our work to advance vaccine equity and access, sign up for our Immunization Matters e-newsletter.