In a plea to halt the Covid-19 pandemic, four global agencies are calling for investments of up to $50 billion – mostly from wealthy nations — to boost manufacturing capacity and supplies and ease trade rules to ensure equitable distribution of vaccines and other medical products.
The “call to action” comes as the pandemic reaches a “perilous point,” but such an investment could reduce infections and the loss of lives, while accelerating an economic recovery, according to a statement from the World Health Organization, the World Bank, the World Trade Organization, and the International Monetary Fund.
With additional funding to COVAX, a WHO vaccine distribution program, the global agencies maintained that the current goal of vaccinating roughly 30% of the populations in low and middle-income countries could be widened to 40% and, possibly 60% by the first half of 2022. And ultimately, added investment could generate an estimated $9 trillion in additional global output by 2025, according to an IMF analysis.
“Increasingly, a two-track pandemic is developing, with richer countries having access and poorer ones being left behind,” the agencies said in their statement. “Inequitable vaccine distribution is not only leaving untold millions of people vulnerable to the virus. It is also allowing deadly variants to emerge and ricochet back across the world.
“As variants continue to spread, even countries with advanced vaccination programs have been forced to re-impose stricter public health measures, and some have implemented travel restrictions. In turn, the ongoing pandemic is leading to deepening divergence in economic fortunes, with negative consequences for all… (The investment) is a win for all — while around 60% of the gains will go to emerging markets and developing economies, the remaining 40% will benefit the developed world.”
Of the $50 billion, the agencies maintained there is a “strong case” to be made for grants of at least $35 billion. They noted G20 governments have already sent “positive signals” about the importance of providing $22 billion in added funding to the WHO program. Another $13 billion is needed to boost vaccine supply in 2022 and further scale up testing, therapeutics and surveillance.
The remainder of the plan — around $15 billion — could come from national governments supported by multilateral development banks, including a World Bank facility of $12 billion for vaccination. The IMF, meanwhile, is preparing what was described as an “unprecedented” program to boost the reserves and liquidity of its members.
The appeal, which follows the G20 Health Summit, reflects increasing anxiety that low and middle-income countries are unable to vaccinate their populations, since wealthy nations locked up supplies with vaccine makers. Through May, low-income countries had signed contracts to purchase just 11% of more than 11 billion Covid-19 vaccine doses, according to the Duke Global Health Innovation Center.
Nearly 2.4 billion doses have so far been contracted by COVAX, which is designed to provide vaccines to 92 low and middle-income countries. But as of now, this would only cover about 30% of their populations through early 2022 and COVAX remains underfunded – an additional $8.3 billion is needed, according to GAVI, the Vaccine Alliance, a nonprofit working with the WHO to administer the program.
The looming gap prompted the South African and Indian governments to propose the WTO temporarily waive intellectual property protection in a trade agreement. The proposal would cover patents, industrial designs, copyrights, and protection of trade secrets. In theory, a waiver could make it easier for countries that permit compulsory licensing to allow a domestic manufacturer to export vaccines.
A WTO agreement reached in 2001 permits countries to issue compulsory licenses. But dozens of lower-income countries argue the language is insufficient for the pandemic, because existing exemptions in international trade law do not permit countries to quickly or easily reproduce vaccines or distribute them to other low-income countries that lack manufacturing capabilities.
The issue, however, was stalled for months, but gained momentum after the Biden administration recently reversed course and decided to support a waiver. The move surprised the pharmaceutical industry, which argues the proposal would eventually weaken incentives needed to develop innovative products, a rallying cry taken up by Republican lawmakers who were lobbied by the industry.
Drug makers, though, continue to maintain major production scale-up poses numerous challenges that cannot be easily addressed by each company, such as adequate supplies of key ingredients and technical expertise for overcoming scientific and regulatory hurdles. Instead, leaders of the world’s wealthiest nations and several drug makers recently argued in favor of issuing voluntary licenses to expand manufacturing, increasing donations to COVAX and investing in production capacity in Africa.
But consumer groups and academics argue otherwise. Last week, the Public Citizen advocacy group released an analysis estimating it would cost $23 billion to produce 8 billion doses of the Moderna (MRNA), including retrofitting facilities, producing the drug substance, and packaging. Another $2 billion would compensate the manufacturer. The effort would require 4,620 employees working at 55 production lines, which could be set up in 14 facilities.
Nonetheless, the proposal remains at a stalemate, although a new draft was discussed at a WTO meeting on Monday. For one thing, the new draft includes diagnostics, therapeutics and devices, but the Biden administration had previously indicated it was focused on vaccines. The draft also sets a three-year time span for a waiver and allows the WTO’s 164 members to determine its completion. But this would require consensus, suggesting just one country could prolong a waiver.