Leave no-one behind: Can we deploy a Covid-19 vaccine quickly and fairly?
We are seeing unprecedented speed and innovation in the race for a vaccine. But the international community needs to start thinking now about equitable access and efficient deployment across the globe. Financial innovation will be part of the story.
By Peter Nicholas, Director, Social Finance
Since we posted this blog Gavi, the Vaccine Alliance has announced a new initiative to ensure sufficient Covid-19 vaccine doses will be available to lower-income countries via volume guarantees. While this is a vital first step, deployment of those vaccine doses to large populations will require significantly more funding, structured in a way that incentivises efficient and effective delivery.
Global attention is focused on the development of a safe and effective vaccine for Covid-19. It’s a huge challenge, but one that has already triggered significant R&D, new public-private partnerships, and new candidate vaccines heading into human trials at an unprecedented rate.
But it’s only half the story. If an effective vaccine is developed and can be manufactured at scale, then two further urgent challenges remain before it can be successfully and equitably deployed across the world, including in developing countries. (There is also the additional challenge of moving from safe deployment of vaccines to health clinics to actual delivery of immunisations, but we will not address that here.)
First, will less-wealthy countries be able to compete with richer nations to access the manufactured stock at an affordable price?
And second, will mechanisms be in place to allow rapid mass deployment of billions of vaccine doses — not just Covid-19 but critical childhood vaccines where those are not reliably available — across countries where public health infrastructure is limited?
An integrated approach
The challenges are many. Vaccines are typically not thermostable, so require a cold chain to maintain an acceptable temperature range during storage and transport. Many of the poorest countries lack adequate cold chains, with vaccines often degrading in outdated refrigeration that is unable to maintain the necessary temperature range. Gavi, the Vaccine Alliance estimates that only 10% of health care facilities in the world’s poorest countries have a reliable electricity supply. This is not just about excessive heat — a recent study suggested that 37–50% of all monitored vaccines stored in lower-income countries have been exposed to unacceptably low temperatures.
Researchers are looking to find new solutions to these problems, including work by Gavi, the University of Birmingham and Heriot-Watt University and the World Bank to map and resolve the challenges along the supply chain. And recent innovations in low-cost, remote temperature-monitoring solutions — like those developed by Nexleaf Analytics — complement existing approaches such as Vaccine Vial Monitors.
But bringing these solutions to bear on a Covid-19 vaccine will also require continued financial innovation. In our view, we need an integrated approach that does three things:
- Ensures sufficient funding is available to allow developing countries to access a vaccine
- Allows that funding to be flexibly deployed, so that delivery programs can adapt to the actual situation on the ground in different countries
- Guarantees cost-effective results from scarce donor funds, given tightening budgets in donor countries.
The international community can build on two proven financial innovations to achieve this.
First, putting in place the financial means for developing countries to access Covid-19 vaccines. Initial estimates are that $20-$25 billion will be needed once effective vaccines are available. One model already in successful use is to issue Vaccine Bonds on capital markets that allow donor pledges of future ODA funding to be turned into immediately available finance. Administered by IFFIm on behalf of a consortium of donors, whose sovereign credit ratings back the bonds, Vaccine Bonds issued to date have generated $6.1 billion of investment. So the international community should have the ambition to scale up, via the IFFIm mechanism, Vaccine Bonds by approximately four-fold compared to issuance to date. Ambitious, certainly, but not infeasible.
Second, using results-oriented delivery mechanisms. Safe transport of vaccines to health clinics around the world requires flexible and adaptive solutions that will need to vary greatly both within and between countries. Even the most promising approaches will not work everywhere, or in the same ways. As one example, Energize the Chain has developed a model that uses the electricity from mobile phone towers — ubiquitous in all but the remotest areas of developing countries — to power vaccine refrigerators. But this requires agreements with tower operators, health clinics (who have to collect the vaccines from the fridge located at the base of the tower) and others. In short, a range of solutions will be needed to ensure rapid and widespread deployment of any Covid-19 vaccine, as well as other vital immunisations.
Results-based delivery
One way to incentivise this varied, customised and adaptable deployment is to use results-based funding, where donor or governments pay providers only if programme delivery is successful. If they fail, or partially fail, they receive no or only partial payment. Payments would be made to any provider that safely delivers vaccines to a given population. Payments would be country-specific, depending on the extent of existing cold chain infrastructure, and the degree of accessibility of the target population.
There is already a strong track record of pooling results-based payments into ringfenced funds. Over the past eight years, the UK Government has launched a range of pay-for-success funds, tackling a range of issues from youth unemployment to rough sleeping. Social Finance has helped bring this approach into international development, including incubating the Education Outcomes Fund.
The innovation here is to integrate the funding made available by a new series of Covid-19 specific Vaccine Bonds with a results-based, flexible disbursement model that delivers verifiable results. To be clear: this does not require a new institution or complex bureaucracy. But it would require a willingness by donors to establish a new ‘Covid-19 Vaccine Results Fund’ at Gavi. This could be structured as follows:
In essence, the IFFIm-style and results-based mechanisms are combined to generate a pool of funding that is disbursed on successful and verified delivery of vaccines to clinics, via multiple programs in multiple countries.
This approach would bring together a new partnership of public and private funders. Two types of investor would be involved:
- Lower-risk commercial investment in the Vaccine Bonds: investors only take the credit risk of a donor-backed bond default.
- Where necessary, higher-risk social investment in the vaccine delivery programs, where service providers cannot provide their own working capital; in this case, investors take program delivery risk.
And the focus on results means that on-the-ground service providers are free to form their own partnerships, which could be solely public, private or a mix.
The Covid-19 Vaccine Results Fund would proceed through a series of stages:
- Vaccine Bond issuance from official donors and foundations generates the pooled funding.
- A payment schedule — for example, a US$ amount per 1,000 vaccines deployed — is calculated and published, varying by country and perhaps even within countries.
- Proposals for deploying vaccines within defined time frames and safety specifications are submitted by consortia of public and private providers
- Proposals that are well designed and plausible, and that meet all fiduciary requirements, are selected
- In some cases, providers will not have the working capital available to finance vaccine deployment in advance of any receipt of payments from the Vaccine Results Fund; in these cases, providers will be able to tap into working capital from social investors
- Delivery consortia, with support as needed from a Technical Assistance window of the Vaccine Results Fund, deliver the vaccines
- The successful delivery of temperature-controlled vaccines is independently verified using temperature monitoring
- Payments are made to the successful providers
It will be an expensive and daunting task. But the imperative to reach populations across the globe is not only a moral one: the global Covid-19 pandemic will not be brought under control if transmission in developing countries continues unabated. With the developed world currently working on an effective vaccine, and with new global alliances forming, the time to start planning for access and distribution in the developing world is now.
Please email peter.nicholas@socialfinance.org.uk with your questions or thoughts.
