The global scheme to deliver Covid-19 vaccines
to poorer countries faces a ‘very high’ risk of failure; potentially leaving
nations home to billions of people with no access to vaccines until as late as
2024; internal documents say. The World Health Organization's (WHO) COVAX
Program is the main global scheme to vaccinate people in poor and middle-income
countries around the world against the coronavirus. It aims to deliver at least
two billion vaccine doses by the end of 2021 to cover 20 per cent of the most
vulnerable people in 91 poor and middle-income countries, mostly in Africa,
Asia and Latin America. Pakistan has also signed up for the program and is
relying on it to vaccinate as much as 20 per cent of its population, according
to the health ministry. But in internal documents reviewed by Reuters; the
scheme's promoters say the program is struggling from a lack of funds, supply
risks and complex contractual arrangements which could make it impossible to
achieve its goals. ‘The risk of a failure to establish a successful COVAX
Facility is very high;’ says an internal report to the board of Gavi; an
alliance of governments; drug companies; charities and international organizations
that arranges global vaccination campaigns. Gavi co-leads COVAX alongside the
WHO. The report and other documents prepared by Gavi are being discussed at
Gavi's board meetings on December 15-17. The failure of the facility could
leave people in poor nations without any access to Covid-19 vaccines until 2024;
one of the documents says. The risk of failure is higher because the scheme was
set up so quickly; operating in ‘uncharted territory’; the report says. ‘Current
risk exposure is deemed outside of risk appetite until there is full clarity on
the size of risks and possibilities to mitigate them;’ it says. ‘It therefore
requires intensive mitigation efforts to bring the risk within risk appetite.’ Gavi
hired Citigroup last month to provide advice on how to mitigate financial
risks.
In
one November 25 memo included in the documents submitted to the Gavi board;
Citi advisors said the biggest risk to the program was from clauses in supply
contracts that allow countries not to buy vaccines booked through COVAX. A
potential mismatch between vaccine supply and demand ‘is not a commercial risk
efficiently mitigated by the market or the MDBs;’ the Citi advisors wrote;
referring to multilateral development banks such as the World Bank. ‘Therefore
it must either be mitigated through contract negotiation or through a Gavi risk
absorption layer that is carefully managed by a management and governance
structure.’ Asked about the documents; a Gavi spokesman said the body remains
confident it can achieve its goals. ‘It would be irresponsible not to assess
the risks inherent to such a massive and complex undertaking; and to build
policies and instruments to mitigate those risks;’ he added. The WHO did not
respond to a request for comment. In the past it has let Gavi take the lead in
public comments about the COVAX program. Citibank said in a statement: ‘As a
financial adviser; we are responsible for helping Gavi plan for a range of
scenarios related to the COVAX facility and supporting their efforts to
mitigate potential risks.’
Supply deals
COVAX's
plans rely on cheaper vaccines that have so far yet to receive approval; rather
than vaccines from frontrunners Pfizer/BioNTech and Moderna that use more
expensive new mRNA technology. The Pfizer vaccine has already been approved for
emergency use in several countries and deployed in Britain and the United
States; and the Moderna vaccine is expected to be similarly approved soon. COVAX
has so far reached non-binding supply agreements with AstraZeneca; Novavax and
Sanofi for a total of 400 million doses; with options to order several hundred
million additional shots; one of the Gavi documents says. But the three
companies have all faced delays in their trials that could push back some
possible regulatory approvals to the second half of 2021 or later. This could
also increase COVAX's financial needs. Its financial assumptions are based on
an average cost of $5.20 per dose; one of the documents says. Pfizer's vaccines
costs about $18.40-$19.50 per dose; while Moderna's costs $25-$37. COVAX has no
supply deals with either of those firms. Nor is it prioritizing investment in
ultra-cold distribution chains in poor countries; necessary for the Pfizer
vaccine; as it still expects to use mostly shots which require more
conventional cold storage; one of the Gavi documents says. On Tuesday a WHO
senior official said the agency was in talks with Pfizer and Moderna to include
their Covid-19 vaccines as part of an early global rollout at a cost for poor
countries possibly lower than current market prices. Other shots are being
developed worldwide and COVAX wants to expand its portfolio to include vaccines
from other companies. Rich countries; which have booked most of the currently
available stocks of Covid-19 vaccines; are also planning to donate some excess
doses to poor countries; although is not clear whether that would be through
COVAX.
Financial pressure
To
meet its target of vaccinating at least 20pc of people in poor countries next
year; COVAX says it needs $4.9 billion in addition to $2.1 billion it has
already raised. If vaccine prices are higher than forecast, supply is delayed
or the additional funds are not fully collected; the facility faces the
prospect of failure; the documents say. So far Britain and European Union
countries are the main donors to COVAX; while the United States and China have
made no financial commitments. The World Bank and other multilateral financial
institutions are offering cheap loans to poor countries to help them buy and
deploy vaccines through COVAX. The facility is issuing vaccine bonds which could
raise as much as $1.5 billion next year if donors agreed to cover the costs;
one of the Gavi documents says. COVAX is also receiving funds from private
donors; mainly the Bill and Melinda Gates Foundation. But even under the best
financial conditions; COVAX could still face failure; because of
disproportionate financial risks caused by its complex deal-making process. COVAX
signs advance purchase contracts with companies on vaccine supplies that need
to be paid for by donors or receiving countries that have the means to afford
them. But under clauses included in COVAX contracts; countries could still
refuse to buy pre-ordered volumes if they prefer other vaccines; or if they
manage to acquire them through other schemes; either faster or at better prices.
The facility could also face losses if countries were not able to pay for their
orders; or even if herd immunity were developed too quickly; making vaccines no
longer necessary; the Citigroup report said. It proposed a strategy to mitigate
these risks including through changes in supply contracts.
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