As the global COVID-19 pandemic has progressed, so too have efforts to develop, manufacture, and secure the supply of potentially effective vaccines. At the time of writing, more than 45 vaccine candidates have entered clinical development, with several front-runners including Pfizer-BioNTech well positioned to begin delivering vaccines in the near future.
But procuring bodies such as governments and supranational organizations face many challenges in getting vaccines in the hands of patients. They need to ensure that they secure supply and guarantee a vaccine is rapidly available in order to control the pandemic, protect healthcare systems, and keep their economies open, while risking criticism if they back vaccines that ultimately do not gain approval or have an inferior efficacy and safety profile.
For manufacturers, the challenge often lies in needing to ramp-up production capacities before knowing whether their vaccine will achieve regulatory approval. Despite efforts among manufacturers to scale-up capacity, demand for vaccines has typically outstripped supply during a pandemic. With an often-limited vaccine supply, governments and other procurement bodies must compete on a global scale.
What Makes Vaccine Procurement During a Pandemic Different?
This issue was seen during the 2009 H1N1 pandemic where some countries entered into advanced purchase agreements very quickly to secure most of the limited available supply. Conversely, countries that were behind in deal-making faced being left without access to a vaccine. Fortunately, the H1N1 pandemic turned out milder than expected and the demand for immunization was low.
During the current COVID-19 pandemic, stakeholders are already grappling with the issue of supply. Similar to the H1N1 pandemic, many countries and supranational organizations have either entered into advanced purchase agreements with manufacturers of promising candidates or are currently in the process of developing such contracts. Most of these agreements are being made based on currently available efficacy and safety data of a potential vaccine but there is a risk that clinical data will not meet required regulatory standards for approval and that procurement bodies will have backed the wrong candidate. Conversely, those who hesitate to enter into purchase agreements may wait too long and be left with no or limited access to a vaccine, pending approval.
It is essential to assume the correct balance of risk when considering vaccine procurement during a pandemic—this will help healthcare systems secure immediate supply but also support vaccine development and allow for the timely scale up of manufacturing capacity. In the current pandemic, we are witnessing varying approaches to assuming risk:
- Countries including Canada, the U.S., and UK have entered into deals with multiple manufacturers and secured large volumes of vaccines—assuming they are approved. Their willingness to enter into agreements in the absence of complete clinical data allows these countries to spread their risk across multiple candidates.
- European countries involved in the Joint Procurement Agreement (JPA)—initially established in response to Member States being left without vaccines during the H1N1 pandemic—have been slow to enter into agreements. This is despite the fact that under the JPA the European Commission agreed to transfer some of the risks from industry to public authorities in return for assuring Member States equal and affordable access to an approved vaccine.
What Types of Risk-Sharing Deals Might Work?
Moving forward, governments must accept that they will need to assume more risk in a pandemic than in a traditional vaccine procurement scenario due to the urgent need for a vaccine. Manufacturers also need to recognize the challenges procurement bodies face and be realistic about their funding expectations and system affordability. It may be necessary to explore more innovative risk-sharing agreements including multi-year contracts with staggered payments over time to satisfy both parties. These types of risk-sharing deals would allow payers to reimburse manufacturers over fixed periods for each patient that is vaccinated while helping to mitigate the high up-front cost associated with intensive pandemic immunization programs.
Although simpler models could be introduced in the short term, in the future, payment models could be linked to real-world data and achievement of specific patient outcomes after vaccination. This could help address payer concerns about the often-limited level of efficacy and safety data available at launch.
Innovative risk-sharing agreements may provide a more agreeable distribution of risk while still providing early funding for clinical development and manufacturing including scale-up capabilities. This type of flexibility, especially in the early years of a pandemic, will pay dividends downstream:
- This would also give companies flexibility on price during the early pandemic stage, allowing them to price affordably at the beginning while securing additional commitments post-pandemic.
- It will show that manufacturers recognize the significant investment the public has made in their companies and the importance of equitable access to approved vaccines.
- This would also allow a platform for sharing risk over time—manufacturers and governments should develop co-responsibility for managing risks around safety and efficacy of a potential vaccine.
Risk-sharing agreements could also work as longer-term solutions that are fit for purpose beyond the initial rounds of vaccine procurement. They may encourage government agencies and other procurement bodies and manufacturers to engage in procurement discussions more proactively and regularly and collaborate earlier in the clinical development cycle. It is clear that traditional procurement strategies are not adequate or even workable in a pandemic and it will be essential that both parties are willing to adapt and refine traditional procurement models to facilitate fast access to potentially safe and effective vaccines moving forward.
The views expressed herein are the authors’ and not those of Charles River Associates (CRA) or any of the organizations with which the authors are affiliated.