29 June (Sangeeta Shashikant) – The proposal by Gavi, the Vaccine Alliance to create a facility that will enter into advance purchase agreements with pharmaceutical companies guaranteeing the purchase of vaccines, has generated significant global concerns about its impact on equitable access for populations especially in developing countries.
Gavi, the Coalition for Epidemic Preparedness Innovations (CEPI) and the World Health Organization (WHO) are the leads of the Vaccine Pillar of the Access to COVID-19 Tools (ACT) Accelerator launched on 24 April 2020, at an event co-hosted by the Director-General of WHO, the President of France, the President of the European Commission, and the Bill & Melinda Gates Foundation.
[Created in 2000, Gavi was formerly known as the Global Alliance for Vaccines and Immunisation. According to its website, it brings together “public and private sectors with the shared goal of creating equal access to new and underused vaccines for children living in the world’s poorest countries.”]
On 11th June Gavi released a discussion document titled “COVID-19 Vaccines Global Access (Covax) Facility – Preliminary technical design”. This was followed by a more recent draft document of 23rd June 2020 tilted “The Covax Facility: an insurance policy for COVID-19 vaccines”.
It is estimated that the proposed Covax Facility will require funding of up to USD 18.1 billion for the 2020/2021 vaccine supply. Of this total, USD 11.3 billion is sought urgently to cover investments within the next 6 months including USD 2 billion in funding for advance market commitments to secure doses for low and middle income countries. However, the justification including assumptions for these estimates have not been provided.
Essentially the proposal is to create a facility (known as Covax Facility) that will enter into advance purchase agreements with manufacturers of potential vaccines, providing “assurance of future procurement at a pre-determined volume and price of a successful candidate”. This “pull mechanism” is aimed at incentivising “manufacturer product development and instalment of capacity”.
The facility will have two levels, the first for fully self-financing countries, i.e. high income countries (HIC) and upper middle income countries (UMIC), and the second for donor dependent countries.
“Self-financing countries are to guarantee that sufficient doses to immunise 20% of their population with successful vaccine candidate(s) will be procured from the Facility” and will have to provide an “upfront payment of [10%] of the total cost of participation” according to the Gavi documents.
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 proposal states.
The needs of donor dependent countries will be addressed by the Covax Facility through an innovative finance instrument – the Gavi Covax Advance Market Commitment (AMC). This will be used to secure access to timely and sufficient supply of vaccines for low income countries (LICs) and low middle income countries (LMICs), including Small Island Economies that are eligible under the International Development Association (part of the World Bank Group).
The documents announce that the Gavi Covax AMC has received seed funding of over USD 500 million at its launch and will be supplemented by additional innovative finance building blocks to enable joint investment in the advance purchase commitments.
It is unclear what terms and conditions will be attached to the financial instruments for dependent countries.
Donor dependent countries whose financial commitments for participating in the facility are to be covered by official development assistance, will get access to vaccines to meet requirements to vaccinate their “highest priority populations”. The volumes specifically directed to these funded countries would be allocated across them using guidance from the global allocation framework under development by WHO.
In short, the Covax facility prioritises the needs of self-financing countries that participate in its scheme. Its initial document clarifies that “[o]nce all countries in this group have received sufficient supply from the Facility to cover e.g. 20% of their population, any additional supply of vaccines would be offered to countries in line with a needs-based allocation framework”.
The WHO allocation framework will only be applicable to donor dependent countries (i.e. low and middle income countries) and the vaccination ambition for this category is limited i.e. to “vaccinate at least their highest priority populations”.
The design of the facility also suggests that non-participating countries will be last in the queue for the supply of vaccines, irrespective of what is contained in WHO’s allocation framework.
Under the proposed design, Gavi will not have financial exposure. The documents state “All Covax volume guarantees offered by the Facility to manufacturers under the agreements are back-stopped by secured capital and do not create a financial exposure for Gavi” and “All participating countries, either externally or self-funded, hold the adequate financial exposure to each manufacturer agreement”.
On pricing, the proposal states “flat pricing strategy…will be encouraged” but firms are free to set their own price and even opt for tiered pricing, adding that beyond the “initial short-term period, the market is expected to evolve towards a traditional, market-led, tiered pricing approach”.
Demand for a particular vaccine (albeit with unproven effectiveness) through various competing Advance Purchase Agreements (the Covax facility, the European Union and United States agreements), each presumably trying to outbid one another, only serves to benefit the pharmaceutical industry’s profiteering through high prices.
In early June, Gavi and CEPI reached a USD 750 million agreement with AstraZeneca to support the manufacturing, procurement and distribution of 300 million doses of the potential vaccine developed by University of Oxford, with delivery starting by the end of the year.
Achal Prabhala and Kate Elder in an opinion piece published by The Guardian on 24th June 2020 note “[b]ut it came at a high price, representing only a minor discount over the full price paid by the US government. The problem is, we know very little about this deal because the agreement isn’t public, despite all the public money involved”.
[Gavi typically negotiates prices ~90% less than industrialised countries but this agreement is only 37% less than that of the United States, one of the wealthiest countries in the world.]
In its first phase up until the end of 2021, the facility aims to secure 2 billion doses of vaccines. According to WHO, at least 1 billion of these doses are intended for self-financing countries. The second phase from 2022-2025 will see additional supply. Some key dates identified for implementation of the facility are:
Rich countries that have already secured preferential access through advance purchase agreements will be able to get additional vaccine supplies through the Covax Facility. Gavi’s proposal strongly encourages their participation by adding “For Governments that are making deals with individual manufacturers to supply vaccines it provides an insurance policy”.
Gavi does not oblige participating countries to make known the APAs that they have entered into. The facility only “requests that countries be open and transparent about their supply agreements” and will also only be requested to “delay” receipt of any additional doses from the facility.
The proposal states that the “Facility has access to doses of vaccine candidates through agreements that provide manufacturer-specific contingent volume guarantees to procure vaccines that meet WHO’s Target Product Profile to de-risk and incentivise timely investment in expansion of manufacturing capacity”.
These Gavi agreements are dependent on agreements by CEPI and the Bill and Melinda Gates Foundation to expand manufacturing. They reveal that “Gavi has signed an MOU with AstraZeneca, one of the manufacturers supported by CEPI, which provides the pathway to an agreement that will commit 300 m[illion] doses to the Facility. CEPI is seeking agreements with developers and manufacturers of additional candidates that will be part of the Facility”.
In addition, a licensing agreement was reached between AstraZeneca and the Serum Institute of India to supply one billion doses for low-and-middle-income countries, with a commitment to provide 400 million doses before the end of 2020.
As the vaccine to be manufactured is in clinical trials, its effectiveness is an unknown. Also unknown are the terms and conditions of the licensing agreements, in particular the number of countries eligible for supply under the agreement.
There is no clarity with regard to AMC commitments in case of failure of the vaccine candidate involved. Médecins Sans Frontières (MSF) in its briefing paper “COVID-19 Vaccine Global Access (COVAX) Facility: Key considerations for Gavi’s new global financing mechanism” recalls that Gavi paid USD 5 million to Merck for the submission of marketing approval by the end of 2017 and maintaining 300,000 doses of Ebola vaccine for emergency uses/expanded clinical trials. However, despite the pre-payment, to date Gavi has not received any Ebola vaccine from Merck.
Gavi’s Experience & Lack of In-depth Supporting Evidence
The same MSF paper points out that Gavi is a Swiss-based foundation with a mandate to finance vaccines for the world’s poorest countries – currently 58 eligible countries (of an original 73 eligible countries). However, it questions Gavi’s role in hosting a global “facility” for COVID-19 vaccines which “is beyond the organisation’s mandate and expertise” stressing that “Gavi has no experience working with most MICs nor any high-income countries (HICs) on procuring for the countries’ vaccine needs” and “does not have experience negotiating with pharmaceutical companies on behalf of these countries”.
In promoting the Covax facility, Gavi points to the success of its AMC for pneumococcal conjugate vaccine (PCV) while glossing over its shortcomings. The AMC for PCV included a USD 1.5 billion subsidy from six donors with the objectives to accelerate the development of PCVs for developing-country needs; increase PCV availability for Gavi countries by supporting scale-up of manufacturing capacity; accelerate PCV uptake with predictable vaccine pricing and binding commitments from companies on number of doses; and pilot the effectiveness of an AMC as an incentive and learn lessons for possible future AMCs.
MSF’s briefing paper notes that “[i]ndependent evaluations of the AMC found it did not deliver on the first objective in a timely way, and failed to fully accomplish the second objective. Supporting scale-up of manufacturing capacity so that companies could meet the volume needs of Gavi countries, and pulling in new manufacturers and PCV products into the market for developing countries, were only partially successful. PCV supply shortages occurred a few times throughout the AMC. Additionally, a PCV product designed for developing countries finally entered the market only at the tail end of the AMC (December 2019) … The evaluation also indicated that Gavi may have paid more per dose of PCV than was necessary, to incentivise pharmaceutical-company participation in the AMC … because they did not have the information regarding the actual costs incurred by pharmaceutical corporations”.
Notably GSK and Pfizer have been the sole suppliers of PCV for the past 11 years, receiving 82% of the AMC aid-finance reward money amounting to USD 1.24 billion.
Gavi’s limited experience calls into question whether Gavi is fit for purpose with respect to COVID-19 vaccines. Even more concerning is the absolute lack of public information and discussion including in the WHO among its Member States, on the suitability and need for the Covax facility and Covax AMC, its advantages and disadvantages, its scope, design and assumptions.
Civil Society Express Serious Concerns
On 23rd June 2020, 45 civil society organizations sent a letter to the Board Members of Gavi highlighting various concerns with the proposed facility. It argues that the initiative reflects the reality that Gavi and governments have not delivered on a previous promise of designating COVID-19 vaccines as ‘global public goods’, adding that in a “business as usual” approach to intellectual property, “pharmaceutical companies are allowed to retain and pursue rights to vaccines under development, resulting in vaccines that are proprietary and under the monopoly control of individual companies. Since there has been no change in how intellectual property is handled during the pandemic, pharmaceutical companies are able to monopolise future COVID-19 vaccines and decide who does and does not get access”.
The letter points out that more than USD 4.5 billion of public and philanthropic funding has already been given to companies for COVID-19 vaccine research and development (R&D) and “Gavi is now designing a fund to award further money to pharmaceutical corporations”.
“The public and philanthropic funding already awarded should result in the delivery of effective vaccines that are designated as global public goods: sold at cost and free from monopoly control,” according to the letter.
The letter highlights 6 key points:
• Vaccines must be allocated based upon public health criteria for all countries
The letter states the “document presents a strikingly unequal and inequitable picture of how the forthcoming WHO-developed equitable allocation framework will be applied within the COVAX Facility, and how potential COVID-19 vaccines will be allocated among countries based on their financial capacities, not public health needs” noting that wealthier, self-financed countries do not have to abide by the forthcoming WHO Global Equitable Allocation Framework, and will have the option to immunise at least 20% of their population while donor-dependent countries will only receive enough vaccine to vaccinate their most vulnerable populations based on national demand and as per the WHO allocation framework.
• Transparency must be fundamental to the Covax Facility
The letter states that “to date there has been no transparency around the COVAX Facility’s design nor the first deal with AstraZeneca”. It stresses that as Gavi is receiving taxpayer money to finance these deals, transparency is essential for public scrutiny, and calls for agreements with pharmaceutical companies to mandate transparency around all costs of development and production, and publication of any agreements and contracts made with industry.
• Prices must be set ‘at-cost’
The letter expresses concern over the proposal to “accommodate a tiered pricing approach over time, providing the opportunity for pharmaceutical companies to further profiteer from this global health crisis”. It adds further that “In light of the significant taxpayer money already invested in COVID-19 vaccine R&D, Gavi’s COVAX Facility must insist that it pay no more than the at-cost price for future doses of COVID-19 vaccines”.
• No risky advance payments without clear conditions
Gavi estimates it will need USD 10.3 billion for risky investments (R&D investments, manufacturing scale up and building inventory) and up to USD 15.7 billion for volume guarantees. However as pointed out in the letter, “Gavi has seemingly not outlined any conditions or criteria for these risky investments, including the advance funds awarded to AstraZeneca”. “What happens if AstraZeneca’s product is not ultimately successful or if AstraZeneca is unable to meet the volumes stipulated? Why has AstraZeneca been selected first?” the letter asks, emphasizing that “Gavi must not engage in risky advance payments to private pharmaceutical corporations without clear and transparent criteria and without conditions set for each manufacturer that receives funds”.
• Operate in line with WHO’s Solidarity Call to Action for equitable global access to COVID-19 health technologies
The letter calls on the Covax facility to ensure that requirements regarding open-licensing and technology transfer by companies are inherent in the facility, with manufacturers required to share their intellectual property, technologies, know-how and data in such a way that guarantees the non-exclusive right to use, produce and supply for all competent entities worldwide, so that the world is given the best chance to rapidly scale up manufacturing of successful COVID-19 vaccines.
• Non-governmental purchasers must be included
Noting that non-governmental, humanitarian and civil society organisations are key actors in the delivery of future COVID-19 vaccines, particularly to the most vulnerable populations who are often not reached by government services, Gavi’s agreements with industry should include these purchases, the letter argues, pointing out that in the past these actors were left paying double the Gavi price to purchase the same vaccine for use in Gavi-eligible countries.
• Accountability is critical
The civil society letter calls for greater accountability because “with its proposal to house a ‘global’ facility (i.e. beyond Gavi’s geographical competency), Gavi should recognise its broader accountability to all WHO Member States”.
It notes with concern that the first phase of the Covax Facility’s design, in addition to the significant agreement brokered with AstraZeneca for USD 750 million, seems to be done outside of the Gavi governance structure and that developing countries – to which Gavi is mainly responsible in its core work – have not had adequate input into the design of the facility.
The letter also calls for civil society to be meaningfully involved in the design of the facility.