Author: Editorial Board, ANU
The pandemic is far from over. Some 40 per cent of the world’s population is yet to receive a single shot of a COVID-19 vaccine. More virulent or contagious strains are likely to emerge. The virus doesn’t recognise borders.
Putting the pandemic behind us is a global weakest-link public good issue. People in advanced economies are not safe until the poorest countries are protected from the virus. In December 2021, the major global institutions — the World Bank, WTO, IMF and World Health Organization — called for urgent action to vaccinate 70 per cent of the population in all countries by mid-2022. There are 20 countries with less than 10 per cent of their populations vaccinated, including less than 0.5 per cent of the population of 90 million in the Congo and just over 3 per cent of Papua New Guineans. Asian nations, especially in Southeast Asia, have done better with the connectivity through existing supply chains and strong state capacity.
As Ken Heydon explains in this week’s lead essay, ‘between mid-2020 and the end of 2021, 10 billion COVID-19 vaccine doses were produced and there is now global capacity to produce 12 billion doses a year’. That’s a remarkable achievement.
Operation Warp Speed and modern medicine is nothing short of a miracle. After never having had a vaccine for coronavirus in the past there are now 339 COVID-19 vaccines in production or development. Moderna created its vaccine on 13 January 2020 only two days after the genetic sequence of the virus had been published for the world.
But, as Heydon points out, ‘distribution has been highly uneven with less than 1 per cent of vaccines going to low-income countries’. The world — not for the first time — has a coordination problem. Pharmaceutical companies had the incentive to create vaccines. Governments have an incentive and responsibility to vaccinate their own people. The incentive to vaccinate others is lacking. This comes at a terrible cost — in terms of lives lost, jobs destroyed, and in the rise of vaccine hesitancy due to growing distrust of governments.
Global forums like the G20 are supposed to fill that gap. But the Group of 20 most powerful countries, plus their hangers on, have collectively failed to solve the coordination problem. US–China strategic competition that has thus far sought to undermine the other instead of improve self-performance has not helped. Even groups that are closely aligned like the Australia–Japan–India–US Quad have been more talk than action on equitable vaccine distribution. China’s massive manufacturing capacity has been focused on non-mRNA vaccines, both because of lack of access and misplaced pride in its homegrown vaccines. Although it declared it would last spring, China is yet to approve a foreign-made mRNA vaccine.
This year Indonesia is steering the G20 the start of three years of developing country leadership of the G20 with India and Brazil to follow. There’s a chance to make progress with political leadership and pressure from the major emerging economies.
What should the developing countries be pushing for in the G20?
The first step is to remove prevalent tariffs and other barriers to the trade in inputs for vaccine production, including syringes. Countries are not ‘protecting’ anything with tariffs that slow vaccine production and distribution.
The second, as Heydon argues, is ‘the relaxation of intellectual property rights to facilitate the transfer of mRNA technology to developing countries that, for the moment, neither Pfizer nor Moderna is willing to consider’. The patents provide the incentive to create the vaccines but the combined profits last year of US$65,000 every minute between Pfizer, BioNTech and Moderna seem more than adequate recompense. Perhaps it’s worth asking whether the governments that fund medical and pharmaceutical research, including into COVID-19 vaccines, are getting adequate compensation for their investment and risk-sharing.
Whether the pharmaceutical companies are forced to share their intellectual property or not, global production and distribution needs to be ramped up drastically.
Pfizer and Moderna are ‘building factories of their own within developing countries, with early moves in South Africa, Rwanda and Senegal’, Heydon explains. ‘Johnson & Johnson and Oxford-AstraZeneca have also set up multiple manufacturing sites globally’ with the help of international institutions.
Making vaccines in developed countries might follow Singapore’s lead that has ‘digital infrastructure and equipment capabilities that allow for quick changeovers, enabling toggle between three or four different types of vaccines’, Heydon explains. The infrastructure and human capital in developed countries should allow for rapid and flexible manufacturing that can be brought to bear on new strains.
Yet, as Heydon also reminds us, Singapore’s hardly a developing country. Far from it. Most developed countries have ‘neither the trained people nor the regulatory regime needed to establish and maintain a safe and reliable vaccine manufacturing capacity’. With developed countries like Australia politically obsessed with making stuff, especially in the lead up to an election, it’s a reminder that the real value-add opportunity for developed countries like Australia is in building up the medical research capacity, and improving its domestic regulatory regime, including for trade.
Manufacturing vaccines requires vast inputs from a large number of countries. The supply chains are complicated. Reliance on China for the production of rapid antigen tests reminds us that, as the ‘factory of the world’, China is going to be an important part of any solution to the global vaccination and health problem.
This raises a broader question, one that stretches beyond the economics of worldwide vaccination. Dealing with global challenges that spill across borders is made exponentially more difficult when major powers, like China and the United States, are more focused on their rivalry than on providing global public goods. On vaccines, just as on climate change and the international economic action required for a strong global recovery, middle powers in Asia like Indonesia and elsewhere will need to step up and provide the leadership that neither superpower, through national conceit or self-regard, seems willing to offer.
The EAF Editorial Board is located in the Crawford School of Public Policy, College of Asia and the Pacific, The Australian National University.
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