Accelerating Vaccinations
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Bibliographic details
- Authors: Arthur Baker, Esha Chaudhuri, Michael Kremer
- Published: December 2, 2021
Pandemic cost and urgency
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- Key facts:
- Less than half of the world’s population and only 8 percent of people in Africa have received a shot.
- Each month in 2020 and early 2021 COVID-19 killed about 300,000 people.
- COVID-19 is expected to reduce global GDP by $12 trillion in 2020 and 2021, which works out to roughly $500 billion a month.
- More comprehensive estimates of harm, including losses from interrupted investments in health and education, are many times larger (Cutler and Summers 2020).
- Central thesis:
- Vaccination is arguably the most effective way to limit human, economic, and social harm from a pandemic; accelerating global vaccination reduces mortality and economic loss.
Risk characteristics of vaccine development and production
- Development is risky and time-consuming:
- Estimated that 15 to 20 candidates would be needed to yield roughly an 80 percent chance of at least one success.
- As late as October 2020, experts estimated the world would produce just 115 million doses by the end of the year.
- Even with rapid formulation, clinical trials take months.
- Production facilities are specialized and slow to repurpose:
- Repurposing facilities took about six months during COVID-19.
- Policy implication:
- Install large manufacturing capacity in parallel with clinical trials and for multiple candidates because we cannot know which will succeed.
Manufacturing capacity and inputs
- Constraints observed during COVID-19:
- Shortage of capacity available to repurpose.
- Shortages of generic inputs such as glass vials, lipid particles, and bioreactor bags.
- Concerns that expanding capacity could lead to rich countries monopolizing limited inputs and repurposable capacity.
- Recommended measures:
- Install standby production capacity and stockpile inputs in advance of future pandemics.
- Design standby facilities to be repurposable for different vaccine candidates.
- In procurement, include ease of repurposing as a selection criterion in addition to cost.
- Cost/benefit perspective:
- Installing and maintaining capacity to vaccinate the world with each of several candidates would cost billions of dollars, but expected returns would be high given the IMF’s estimate of COVID-19’s economic cost.
Social value versus private incentives
- Discrepancy in values:
- Estimated marginal social value of existing COVID-19 vaccine capacity in early 2021 was $500 to $1,000 per course.
- Current contracts paid $6 to $40 per course.
- Policy recommendation:
- Governments should offer incentives to install extra capacity and stockpile inputs because private returns understate social value.
- Examples of successful government interventions:
- Operation Warp Speed and the Vaccine Taskforce paid companies to install manufacturing capacity while clinical trials were underway.
- Cost-effectiveness illustration:
- COVID-19 cost the US economy an estimated $26 billion a day in 2020 and 2021.
- Operation Warp Speed had spent just $13 billion as of December 2020; it will pay for itself if it cuts the duration of the pandemic by just 12 hours.
- Earlier and larger investments in manufacturing capacity would have had even larger benefits.
Vaccine nationalism and trade
- Risks and observed behavior:
- Price controls create shortages, which incentivize governments to prioritize domestic delivery and to impose export bans or hoard supplies.
- During COVID-19, the United States and India restricted exports of vaccines or inputs in 2020 and 2021; some EU countries restricted exports of surgical masks; the United States was accused of seizing shipments.
- Strategic effect of greater global capacity:
- Vaccinating the world in a few months would weaken incentives for hoarding and export restrictions.
- Unfettering trade and addressing shortages encourages countries to invest in standby capacity across a range of technologies.
- Geopolitical and efficiency rationale:
- Few countries or regions can install large-scale capacity for all vaccine platforms; global trade and pooled investments increase security and efficiency.
Supply capacity and pooled investments
- Dynamics of investments:
- National investments increase global supply but may raise prices for others if input supply cannot adjust quickly.
- In the long run, capacity can be expanded to meet demand without substantial per-unit price increases.
- Multilateral approaches:
- Pooled investments through multilateral organizations can hedge ignorance about which countries will be hardest hit.
- Agreements to prioritize supplies for hardest-hit countries and populations increase security for all for a given level of capacity investment.
- Operational point:
- Despite vaccines being approved in December 2020, many countries did not expect to have the majority of their populations fully vaccinated until at least early 2022; advance strategic investment can avoid such delays.
Financing research and adapting regulatory processes
- Underinvestment areas:
- Commercial incentives are insufficient for many areas of research with high social value, including dose-stretching and mix-and-match strategies.
- Dose-stretching potential:
- Early clinical trial immune-response data and correlations with efficacy suggest half or even quarter doses of some vaccines could be highly effective, particularly against severe disease and death.
- Using lower doses could have expanded vaccine supply by up to 1.5 billion doses a month in the second half of 2021 and could reduce side effects and vaccine hesitancy.
- Despite promising data and high expected value of testing, no clinical trials of efficacy and very few further studies of immune response to fractional doses had been conducted as of late 2021.
- Policy recommendations for research financing:
- Governments should subsidize research where private incentives are insufficient.
- Global institutions should invest in research that is a global public good.
- Studies to ascertain optimal dosing regimens and evaluate mix-and-match strategies should take place in parallel with standard clinical trials.
- Regulatory and procedural reforms to consider:
- Establish scientific and ethical infrastructure to rapidly assess human challenge trials.
- Release preliminary data from early clinical trials to inform manufacturing allocation decisions.
- Establish international licensing standards.
- Expedite emergency use authorization processes.
- Adaptive policy note:
- Optimal dosing regimens may change as new variants emerge and as the demographics of the unvaccinated population shift; overall public health benefits—not only individual-level efficacy—should inform decisions.
Authors
- Arthur Baker — associate director for research and planning at the Development Innovation Lab at the University of Chicago.
- Esha Chaudhuri — research specialist at the Development Innovation Lab at the University of Chicago.
- Michael Kremer — director of the Development Innovation Lab and university professor in the Kenneth C. Griffin Department of Economics at the University of Chicago; 2019 co-recipient of the Nobel Memorial Prize in Economics Sciences.
Source: Accelerating Vaccinations, F&D Magazine, Arthur Baker, Esha Chaudhuri, Michael Kremer, December 2021.
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