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COVAX created to try to avoid global bidding frenzy for COVID-19 vaccines

A global funding initiative is trying to prevent a chaotic scramble for COVID-19 vaccines

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INTRODUCTION

Protecting the world

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World Economic Forum

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EU Vaccine Strategy

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COVAX created

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Path to 300M doses

Panic buying of vaccines by high income countries, mopping up supply and squeezing out lower income countries, is the nightmare postscript to COVID-19 that international health agencies envisage could play out if steps aren’t taken now. A coalition of global health organizations, national governments and private companies has joined together to head-off that possibility.

The COVID-19 Vaccine Global Access (COVAX) Facility is a global purchasing pool created with the goal of ensuring that priority populations around the world have access to vaccines.

The players have come together over the last two months as government agencies and industry have pressed ahead with urgency to develop a vaccine, while no clear path to enable equitable access exists.

The partners’ concern is that rather than an emphasis on global access, there is an accelerating trend to vaccine nationalism.

The threat of poor countries being left in the dust is not theoretical. In 2009, when the world was threatened by an H1N1 influenza pandemic, wealthy countries used their financial clout to commandeer the entire global vaccine supply. Vaccines were not provided to middle- and low-income countries until demand in wealthy countries was fully satisfied.

The threat of poor countries being left in the dust is not theoretical.

COVAX was established by the Access to COVID-19 Tools (ACT) Accelerator, a collaboration created in April by global health and private sector organizations.

On June 4, Gavi, the Vaccine Alliance, launched the Gavi Advanced Market Commitment for COVID-19 Vaccines (Gavi Covax AMC), as a financing instrument that represents the first building block of COVAX.

According to a June 11 COVAX discussion draft document circulated to stakeholders and obtained by BioCentury, the central idea is to negotiate advance purchase commitments for vaccines -- guaranteeing manufacturers that they’ll be able to sell specific quantities at predetermined prices -- and couple these with agreements on principles for how countries of different income levels should pay in and receive back, when a vaccine becomes available.

“It is an unfortunate reality that vaccine nationalism could result in export controls over needed components or vaccines,” states the document.

The authors paint a picture in which “individual countries or groups of countries continue to pursue siloed vaccine strategies and each invests to scale-up specific vaccines.” That would “lead to an inefficient use of resources and the inequitable allocation of eventual vaccines, with damaging outcomes to the detriment of national and global health and economies.”

The document argues that an uncoordinated approach to vaccine procurement creates risks even for the wealthiest countries.

For example, high income countries could form bilateral agreements with manufacturers for a specific vaccine, but could end up backing the wrong horse and opting for a vaccine that turns out to be ineffective. There are pragmatic reasons beyond any ethical argument for wealthy countries to participate in COVAX, including offsetting that risk.

COVAX aims to allow countries to buy a share in a pool that contains a number of vaccines.

However, the initiative may not be ambitious enough. Its initial target is $2 billion, of which it has so far raised $500 million. Far more will be needed, and quickly, to meet the roughly 1.7 billion doses it thinks it will need from 2021-22, let alone the 9 billion doses it calculates will be needed from 2021-26.

Stakeholders who have helped design COVAX include representatives of global health funders such as the Bill and Melinda Gates Foundation, Coalition for Epidemic Preparedness Innovations (CEPI), Wellcome Trust and WHO. National governments from around the globe, with the exception of the U.S., have been involved in the discussions. BIO participated in the talks.

Pharmaceutical companies involved in discussions include AstraZeneca plc (LSE:AZN; NYSE:AZN), Biological E. Ltd. (Hyderabad, India), CSL Ltd. (ASX:CSL), GlaxoSmithKline plc (LSE:GSK; NYSE:GSK), Johnson & Johnson (NYSE:JNJ), Merck & Co. Inc. (NYSE:MRK), Novavax Inc. (NASDAQ:NVAX), Pfizer Inc. (NYSE:PFE), Sanofi (Euronext:SAN; NASDAQ:SNY), Serum Institute of India Pvt. Ltd. and Takeda Pharmaceutical Co. Ltd. (Tokyo:4502; NYSE:TAK).

Not all participants in the discussion have yet endorsed the proposal.

Supplying priority populations

The ACT Accelerator has provided limited public information about COVAX, but the draft document obtained by BioCentury describes COVAX as an “umbrella financing and procurement mechanism through which demand and resources are pooled to support procurement of an equitable access to COVID-19 vaccines.”

It defines the COVAX initiative as a “risk-management mechanism” that on the one hand will reduce risk for countries concerned about securing access to vaccines, and on the other will reduce risk for manufacturers who are investing without knowing what the demand will be.

COVAX is split into two streams, one for wealthier countries that can purchase vaccines for their populations and another for poorer countries that depend on donor funding.

High- and upper-middle income countries will fund COVAX by making upfront financial contributions. These contributions will serve as down-payments, securing future vaccine deliveries.

“We want production in Europe, but for the benefit of Europe and the rest of the world.”

Stella Kyriakides, European Commission

These funds will allow COVAX to enter into advance purchase commitments with manufacturers for deliveries of vaccine in real-time, as they are manufactured.

“As supply becomes available, a ring-fenced proportion of that real-time vaccine production will be directed to the fully self-financing countries to be used by these countries according to the guidance provided by their national bodies” the discussion document states.

The goal of the purchasing pool is to enable all self-financing countries to vaccinate their highest priority populations, which the discussion drafts suggests could be about 20% of the total population. Countries that participate in COVAX and also secure sufficient vaccine doses to cover 20% of their populations will be asked to delay drawing on the facility until all other countries in the pool have enough vaccine for 20% of their populations.

Vaccine will be provided to lower-income and lower-middle income countries as soon as it becomes available and will be allocated according to a framework that WHO is developing. The supply for countries that depend on donor funding will be secured through Gavi’s advance market commitment.

COVAX is intended to exist for a limited period of time that has not yet been defined.

Pull mechanism

COVAX will assure manufacturers that it will purchase a pre-determined quantity of COVID-19 vaccine at prespecified prices.

This “pull” mechanism will be coordinated with separate “push” mechanisms, like CEPI’s funding of COVID-19 R&D and of at-risk manufacturing.

The facility plans to use two types of pull mechanisms, according to the discussion draft.

In one, Gavi will give manufacturers contingent volume guarantees, to procure vaccines that meet the agreed WHO Target Product Profile. This is designed to incentivize manufacturers to expand their manufacturing capacity, and to de-risk that investment.

In the second, COVAX will rely on a market-wide demand guarantee -- a commitment to purchase a total quantity that wouldn’t be tied to specific vaccines -- that would add to the incentives and assurances to manufacturers to build capacity.

COVAX intends to negotiate prices “under the expectation that manufacturers seek minimal returns in the near term for supply to vaccinate priority populations and control the pandemic.” It will take into consideration any other direct financial support received by manufacturers.

European advance purchase commitments

Some of the additional funding required to give COVAX the financial leverage it needs to succeed could come from the European Commission, individuals involved in planning COVAX told BioCentury.

The EC plans to commit $2.7 billion to advance purchase commitments for COVID-19 vaccines, Stella Kyriakides, European Commissioner for Health and Food Safety told reporters on June 12. She did not mention COVAX, and it is not clear how much, if any of the EC funds will go to COVAX, individuals involved with the initiative said.

“We have been discussing with the vaccines producers and Member States for some weeks now and have today put on the table a framework for joint action at EU level, in order to obtain a political mandate from the Ministers,” Kyriakides said. “Part of our proposal is to agree Advance Purchase Agreements with vaccine producers, giving the Member States the right to buy a given number of vaccine doses for a certain price, as and when a vaccine becomes available.”

“This is a global program that we have to address globally, but to the extent we have our own capacities we’ll take care of our own.”

Peter Marks, FDA

She said that the EC advance purchase commitment will potentially be available to “all vaccine developers that have a manufacturing capacity in Europe and have entered clinical trials this year.”

Kyriakides added that the EC will seek commitments from vaccine manufacturers it contracts with to make supplies available globally. “We want production in Europe, but for the benefit of Europe and the rest of the world.”

Even as the EU is gearing up for pan-European advance purchase commitments, individual countries are negotiating bilateral agreements with individual manufacturers, and regional groupings are acting to secure vaccines. For example, Europe’s Inclusive Vaccines Alliance (IVA), spearheaded by Germany, France, Italy and the Netherlands, has contracted with AstraZeneca for 400 million doses of the University of Oxford’s COVID-19 vaccine.

An insurance policy for wealthy countries, lifeline for the poor

If it works, COVAX will be a lifeline for people living in countries where governments lack the resources to purchase vaccines, and an insurance policy for those living in wealthier countries, where it will diversify their risk.

In the absence of a purchasing pool, wealthier countries have two levers to obtain vaccines: contracting with manufacturers and, for countries that are home to vaccine plants, coercing or obligating companies to hand over supplies.

The U.S. is the only country that can safely rely on the “helping itself first” strategy because it has plants manufacturing high volumes of a number of different types of COVID-19 vaccine candidates.

The U.S. also leads the world in committing virtually unlimited funds to purchase vaccines, including billions of dollars committed at-risk for vaccine candidates that have not completed development.

Speaking at the BIO digital meeting, Peter Marks, director of FDA’s Center for Biologics Evaluation and Research, said: “This is a global program that we have to address globally, but to the extent we have our own capacities we’ll take care of our own,” he said.

Speaking in a briefing to reporters Tuesday, a senior government official said the U.S. policy is to secure vaccine supplies for the U.S. population, and after its citizens are taken care of, to allow export of supplies produced as part of Operation Warp Speed. “Our priorities are very clear: Let’s take of Americans first. To the extent there is surplus, we have an interest in ensuring folks around the world are vaccinated.”

He added that many of the vaccine manufacturers that have signed contracts with the U.S. government have separate manufacturing capacity in other countries. “In no way are we inhibiting those vaccines from getting to others around the world.”

The COVAX discussion draft argues that for countries and regions outside the U.S. that have made bilateral commitments to secure vaccines, COVAX “could be viewed as a form of insurance policy, diversifying their risk to increase their eventual chances of accessing a vaccine.” It notes that given the high attrition rates for candidate vaccines, investing in one or two vaccine candidates is a “high-risk strategy” that would be mitigated by COVAX’s ability to invest in a greater number of deals.

“The more countries that participate in the Facility, the greater the Facility’s ability to invest in a greater number of deals, increasing both the chances of success and the ultimate availability of supply,” states the document. The pool would also enable more sustainable vaccine prices, “thanks to economies of scale and reduced transaction costs.”

The draft puts the stakes for poorer countries in stark terms. “For those countries that don’t have the ability to independently make bilateral deals, without the COVAX Facility they will almost certainly be left behind.”

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