AMID fears of a third wave of the Covid-19 outbreak in Malaysia, many are hoping for a vaccine to appear sooner as the solution, once and for all. This is despite numerous reminders by Health director-general Dr Noor Hisham Abdullah that social distancing and practising good personal hygiene are key to breaking the virus’ chain of transmission, as no vaccines were available to the Health Ministry when it faced SARS and MERS in the past.
Then came pressure from the Malaysian Medical Association and some health-related organisations on the federal government before September 18, the deadline for Malaysia to join the global Covax Covid-19 vaccine access plan (The Covax Facility) and commit financially before October 9. Covax is co-led by Gavi (The Vaccine Alliance), Coalition for Epidemic Preparedness Innovations (CEPI) and the World Health Organisation (WHO), essentially a risk-hedging mechanism to pool resources to support availability of, and equitable access to, Covid-19 vaccines for all participants, including efforts to raise funds to cover 92 lower income countries or economies.
The Covax Facility promises to deliver at least two billion doses of approved vaccines by the end of 2021, and guarantees access for every participating member country or economy. A widely publicised statement on September 19 from the Science, Technology and Innovation Ministry affirmed that Malaysia will join Covax, but the media has since revealed that Malaysia was still not on the list by September 25.
Science, Technology and Innovation Minister Khairy Jamaluddin clarified on September 29 that the government is still in talks with Covax and, at the same time, may opt for direct supply from pharmaceutical companies without joining it. If the Covax plan sounds so positive and promising, why is the government so hesitant? In this article, I will attempt to illustrate the reservations about Covax as, in any international agreement, the devil is always in the details.
As an upper middle-income country, Malaysia is considered to be a self-financing country for the Covax plan and thus, has to pay an estimated upfront cost of RM573 million (including financial guarantee) for the “committed purchase arrangement” to cover 20% of our population for a two-dose regime by 2021.
If Malaysia opts for the “optional purchase arrangement”, the government has still to fork out RM190 million (including higher downpayment and risk-sharing guarantee).
This is not a small sum. Just to compare, under Budget 2020, the amount allocated to the Health Ministry for immunisation and primary healthcare pharmacy supplies purchase is RM846 million (under the Public Health Department). While in March, an additional RM1 billion supplementary budget was allocated to the ministry to curb Covid-19 transmissions, it is unclear whether it has much left.
The stipulated amount of RM190 to RM573 million under the current virus-affected economic climate can be made available for many good social welfare uses.
The issue is beyond the quantum of the upfront payment. When one considers an “insurance plan”, usually one would look at the premium size, compare the risk and benefits, then only conclude whether the plan is worth taking.
Covax terms these upfront payments as a “speed premium”, which Gavi (the administrator of the Covax Facility) will use to make advanced purchase commitments and “at risk” investments in manufacturers prior to regulatory approval. That amount of investment is to accelerate the manufacturing of promising vaccine candidates while they are being evaluated in clinical trials and before these vaccines have a licence.
Nine vaccine candidates announced by the WHO in August are currently being evaluated for inclusion in the Covax Facility, and they are in different clinical trial phases. It aims to have an actively managed portfolio of 10-15 vaccine candidates.
This would also mean, due to the difficulty of developing a successful vaccine, many of these investments would be written off if they ultimately fail to achieve regulatory approval. There remains a possibility that all candidates could fail, given the tricky nature of the viral infection and host immune response.
Currently, participating countries have very limited influence in affecting the negotiation progress/outcome with manufacturers. This would all depend on Gavi, with the expectation that it will achieve the lowest possible price for all participants, and that these prices are competitive with those achieved through bilateral deals.
There is no guarantee that the prices will be the best or lowest, and Gavi did not rule out that manufacturers would practise tier-pricing. That also means, the so-called all-inclusive estimated costs per dose at US$10.55 (RM43.80) is just an indicative pricing. The final price of the successful vaccine the manufacturer will have no upper limit, though participating countries have a choice to “skip” those charging more than double the indicative price.
The participant has to pay the adjusted cost per dose after accounting for the spent speed premium, risk mitigation and operational costs incurred by Gavi. There is also no guarantee for a “technology transfer” between vaccine developers and potential local manufacturers; Gavi states that this will be addressed on a “case-by-case basis”.
Thus, the down payment itself, depending on whichever purchase plan the country chooses, will present 15-30% of the premium to the indicative price. It is quite understandable that a smaller country like Malaysia would be afraid to miss the boat, given that Covax has some number of high-profile candidates, but what if the government takes a more cautious approach, and only goes for the successful candidate(s) once the convincing clinical data is presented to the Health Ministry?
The government could make a sizable saving by not committing to Covax, and go into specific target negotiation under the government’s control for bilateral deals. Given Malaysia’s local pharmaceutical industry’s strength, leading manufacturers could have the capacity to produce vaccines domestically. Perhaps this arrangement may not reach the “speed” comparable to Covax, from the government’s point of view, but it makes more sense to balance financial and immunisation needs.
Another big worry about the “speedy nature” of approval is that Covax participants are required to provide indemnity against product liability claims, which means that vaccine manufacturers want a no-fault compensation scheme. This is unacceptable and irresponsible for the public health authority.
Many governments around the world have also attempted to approach vaccine developers; some have made parallel deals even after committing to or expressing intention to join Covax.
In fact, another challenge that Covax faces is that big and powerful nations, such as the US, China and Russia, have opted out, and many rich countries (including the EU) have already signed their own bilateral deals with drug companies and snapped up the majority of the vaccine supply for the next year. More than one billion doses have already been “signed up” by the EU. Covax would have competition and will not be the only game in town striving for the best deal.
Some critics also claim that Covax is not ambitious enough: to achieve global herd immunity and get rid of SARS-CoV2, two billion worldwide doses and 20% coverage are clearly insufficient. Therefore, the best bet that Malaysia government has is beyond Covax as the only solution to vaccine production and distribution.
By right, vaccine developers should also shoulder global social responsibility and give their vaccine products an open licence so they can be manufactured as widely and quickly as possible.
It is good that Malaysia takes a more cautious and flexible approach to find ways to ensure self-sufficiency when it comes to vaccine supply should the day of scientific breakthrough come and the product is proven.
Expanding the capacity of manufacturing them in the country is one important approach. Malaysia should also consider developing vaccines in future, not specific to SARS-CoV2.
In the meantime, social distancing, good personal hygiene practices and strict adherence to SOP should be our “vaccine”. We should not get lax and hinge our hope on vaccine candidates on the Covax list.
22nd article for Agora@TMI column, published on The Malaysian Insight, 5 Oct 2020
