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BRUSSELS (Reuters) – The global plan to deliver COVID-19 vaccines to the poorest countries faces a “very high” risk of failure, which could leave nations without access to vaccines until 2024, according to internal documents.
The World Health Organization’s COVAX program is the world’s leading scheme for vaccinating people in poor and middle-income countries around the world against coronavirus. Its goal is to deliver at least 2 billion doses of vaccines by the end of 2021 to cover the 20% of the most vulnerable people in 91 poor and middle-income countries, mainly in Africa, Asia and Latin America.
But in internal documents reviewed by Reuters, the scheme’s promoters say the program is struggling with underfunding, supply risks and complex contractual arrangements that could make it impossible to achieve its goals.
“The risk of not establishing a successful COVAX facility is very high,” reads an internal report to the board of Gavi, an alliance of governments, pharmaceutical companies, charities and international organizations that organizes global vaccination campaigns. Gavi co-directs COVAX together with WHO.
The report and other documents prepared by Gavi will be discussed at Gavi’s board meetings on December 15-17.
The facility’s failure could leave people in poor countries without access to COVID-19 vaccines until 2024, says one of the documents.
The risk of failure is higher because the scheme was established so quickly, operating in “uncharted territory,” the report says.
“Current exposure to risk is considered out of risk appetite until there is complete clarity on the size of the risks and the possibilities to mitigate them,” he says. “Therefore, intensive mitigation efforts are required to bring risk into risk appetite.”
Gavi hired Citigroup last month to advise on how to mitigate financial risks.
In a Nov. 25 memo included in documents presented to Gavi’s board, Citi advisers said the biggest risk to the program was clauses in supply contracts that allow countries not to buy reserved vaccines through COVAX.
A potential mismatch between supply and demand for vaccines “is not a business risk efficiently mitigated by the market or MDBs,” Citi advisers wrote, referring to multilateral development banks like the World Bank.
“Therefore, it must be mitigated through contract negotiation or through a Gavi risk absorbing layer that is carefully managed by a governance and management structure.”
When asked about the documents, a Gavi spokesman said the agency remains confident that it can achieve its goals.
“It would be irresponsible not to assess the risks inherent in such a massive and complex company, 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 allowed Gavi to lead public comment on the COVAX program.
Citibank said in a statement: “As a financial advisor, we are responsible for helping Gavi plan for a variety of scenarios related to the COVAX installation and support its efforts to mitigate potential risks.”
SUPPLY OFFERS
COVAX’s plans are based on cheaper vaccines that have not yet received approval, rather than vaccines from pioneers 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.
So far, COVAX has entered into non-binding supply agreements with AstraZeneca, Novavax and Sanofi for a total of 400 million doses, with options to order several hundred million additional injections, says one of the Gavi documents.
But all three companies have faced delays in their trials that could delay some potential regulatory approvals until the second half of 2021 or later.
This could also increase COVAX’s financial needs. Their financial assumptions are based on an average cost of $ 5.20 per dose, says one of the documents.
Pfizer vaccines cost about $ 18.40 to $ 19.50 per dose, while Moderna costs between $ 25 and $ 37. COVAX does not have supply agreements with either of those companies. It is also not prioritizing investment in ultra-cold supply chains in poor countries, necessary for the Pfizer vaccine, as it still hopes to use mainly injections that require more conventional cold storage, says one of the Gavi papers.
On Tuesday, a senior WHO official said the agency was in talks with Pfizer and Moderna to list their COVID-19 vaccines as part of an early global launch at a cost to poor countries possibly lower than current market prices. .
Other vaccines are being developed around the world and COVAX wants to expand its portfolio to include vaccines from other companies.
Rich countries, which have reserved most of the currently available stocks of COVID-19 vaccines, also plan to donate some excess doses to poor countries, although it is unclear if that would be through COVAX.
FINANCIAL PRESSURE
To meet its goal of vaccinating at least 20% of people in poor countries next year, COVAX says it needs $ 4.9 billion in addition to the $ 2.1 billion it has already raised.
If vaccine prices are higher than anticipated, supply is delayed or additional funds are not fully collected, the facility faces the possibility of failure, the documents say.
So far, Great Britain and the 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 implement vaccines through COVAX.
The facility is issuing vaccine bonds that could raise as much as $ 1.5 billion next year if donors agree to cover the costs, says one of Gavi’s documents. COVAX is also receiving funding from private donors, primarily the Bill and Melinda Gates Foundation.
But even under the best financial conditions, COVAX could still face failure, due to the disproportionate financial risks caused by its complex trading process.
COVAX signs advance purchase contracts with vaccine supply companies that must be paid by donors or recipient countries that have the means to pay.
But under the clauses included in the 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 unable to pay for their orders, or even if herd immunity developed too quickly, making vaccines no longer needed, according to the Citigroup report. He proposed a strategy to mitigate these risks, including through changes to supply contracts.
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