The NileView
What technology management studies tell us about vaccine production in Egypt and other emerging economies
Attitudes about vaccination have been changing over the past twenty years, and the Covid-19 pandemic accelerated those changes and brought about new institutions, procedures, and expectations. Unlike Ebola, which is extremely dangerous but geographically more easily contained, Covid-19 quickly spread worldwide, meaning that rapid deployment of vaccines everywhere is a priority.
Just as with immunization against the major childhood diseases, the goal should be for universal distribution, and this presupposes a large degree of local control and low cost, which are somewhere among the guiding principles behind the current plans in Egypt and most other countries. The initial response in Egypt to produce Sinovac supplies locally is, however, flawed in several ways that ought to be alleviated for the future and there are already set plans for that. These flaws include the tardiness of the response, the small scale, and the fact that its initial stage is dependent on a single source––Chinese aid. These conditions have created the situation where longstanding practices of foreign medical aid have coalesced into a novel form of vaccine diplomacy. The long-term solution is to increase local capabilities to take care of most of the steps necessary for health emergency responses nationally, decoupled from bilateral aid.
Building this level of capability is not beyond the capacity of most capable governments. While the initial development of Covid vaccines in the United States, the UK, Germany, and China was built on decades of targeted research funding sitting upon huge and historically deeply rooted pharmaceutical industries, rolling out production worldwide is by no means infeasible. We have seen that in the early move to concentrate production at India’s Serum Institute as well as the assumption that Egypt’s recently scaled-up vaccine manufacturing capacity is suitable for large-scale delivery with the guidance of Sinovac and possibly some other leading global pharmaceutical companies, which is essential for diversification. There is much discussion about protecting intellectual property rights, about ensuring that companies such as Johnson & Johnson, Pfizer, and AstraZeneca receive sufficient incentives to sustain their business success, and about scepticism of the medical and technical capacity of countries such as Egypt to ensure quality and efficiency. These are all red herrings and boil down to excuses to retain concentrated controls and ensure opportunities for future profits.
On the side of recipient countries, there are several areas where policies need to be implemented to ensure scalable and sustainable local capacity. They are not just in the form of an emergency response fund but include procedures for rapid decision-making so that resources can be timely mobilized. It also means ensuring that associated activities such as information gathering and analytics can be reliably targeted.
Suggestions for these kinds of activities have been around a very long time, some dating to the 19th century. The United States has long pondered state-level production facilities for public health emergency use, and some municipalities manufactured such treatments from the 1890s. Chinese production is mainly in state-owned enterprises, and national bodies such as the Pasteur Institute have long served France. Coincidently, the Nobel Prize for economics was awarded in 2019 just a couple of months before the outbreak of Covid-19 to Michael Kraemer, whose main works have been precisely in this area. In his 2004 book, Strong Medicine, and in subsequent writings, including contributions to the 2021 G20 panel on pandemic preparedness, he has advocated for a variety of economic responses to ensure more equitable and internationally coordinated responses.
Disentangling conflated arguments
The discovery, production, distribution, ownership, and financing of vaccines and some other drugs ought to be separated as policy topics because they each have different logic and economic implications. In the case of Covid-19, a huge amount of money was spent on discovering vaccines spread among over a score of countries. Much of this was wasted because aside from organizations in those countries that have been successful so far, Germany, the UK, the United States, Russia, and China, only France and perhaps Switzerland have great depth in the specific research fields necessary. Most efforts were met with failure to one degree or another. We might yet expect useful results from French organizations such as the Pasteur Institute and Sanofi, but for now, they join the many companies and institutes that have spent large amounts without early results. This includes leading American, German, and British pharmaceutical companies. Japan is an interesting case where popular mistrust of local pharmaceutical companies long ago translated into lacklustre policy support for these sorts of projects.
Production is more distantly related to discovery than some people realize. The main reason for the inventors of new drugs to control production is because that is the most straightforward way to protect property rights. We have long known that although there might be a steep learning curve to master production techniques, the capability can be acquired almost anywhere, as evidenced by the huge scaling up of production at India's Serum Institute and the transfer of production technologies to Egypt and a few other places. Whereas discovery capabilities are very expensive to transfer and could take decades, production know-how takes only weeks to acquire. The limiting factor is the presence of appropriate facilities and the required skilled labor.
The distribution of vaccines is a separate problem that needs to be solved by implementing a few straightforward, if expensive steps. One is to have the information necessary to guide any distribution program. This usually requires widespread disease testing and monitoring. While epidemiologists and public health workers have been doing this for over 150 years in many places, it is expensive and managerially difficult, and consequently, the quality has been very poor in most countries, as dramatically apparent with the UK’s failed £37 billion ‘Test and Trace' program. In addition to information, distribution efforts need medical workers, transport logistics, inoculation locations, and usually refrigerators, sometimes expensive super-coolers.
As for ownership and financing, the problems require many alternative kinds of solutions, some of which have already been tried. Most of the money spent on discovery came from taxes, from health services and research grants provided over many years by the United States, the UK, and EU governments, from China’s financing of state-owned pharmaceutical enterprises, and from government pre-delivery contracts given to reduce the risks for many companies before they even could report successful drugs trials. Some came from multilateral bodies such as the European Commission and the World Health Organization (WHO). A small but narrowly targeted contribution came from philanthropies, such as the Wellcome Trust and the Gates Foundation, and some came from risk capital spent by companies as part of their strategic development. Despite this diverse and mainly taxation-sourced origin of finance, ownership is conferred by patents mainly to companies, and we ought not to be too very grateful for some of them conceding intellectual property-sharing scheme or a limited period of delay before profit-taking or a commitment to charging a relatively small price margin over declared production costs.
Discovery, production, distribution, and finance problems need different solutions. While the capability to discover drugs and vaccines is concentrated in a handful of countries and is unlikely to change in the foreseeable future, production problems can and should be reversed quickly by building or extending facilities in many countries. These factories can be used for drugs and vaccines production to meet routine local requirements and designed to be able to switch over to address epidemics rapidly when needed. Egypt’s goal to produce 1 billion doses primarily for regional dissemination is evidence that these are not pipedreams. While they may be seen as production facilities in their own right, they are primarily in place as available emergency excess capacity. This would go a bit beyond the United Nations Food and Agriculture Organization's approach to emergency food storage. For vaccines production, there would need to be a trained labor force in specific laboratory and production tasks, but the training difficulties ought not to be exaggerated, and such a trained workforce would be very valuably integrated into the local medicine and public health system when not needed during epidemics, as is commonly the case with other trained emergency response workers in areas such as earthquake, hurricane and wildfire response, search-and-rescue and civil defense.
Distribution efforts are going to require much better preparation than we have seen so far with Covid-19 because manpower, transport, and refrigeration have to be mustered quickly. That is both a problem of international cooperation and coordination and a problem of management from the highest levels of national government to the lowest levels of local administration. Solving this ought to be the first priority, even before the capital-intensive work of building ready-placed facilities begins. However, local training in coordination and management can begin immediately, and countries need to ensure that the capacity is always maintained.
Some of the problems associated with providing business incentives to develop drugs and vaccines can be addressed by reconsidering the relationship between the sources of finance and the control of intellectual property. This would imply that those who pay the largest share of the costs hold more power over the use of the property. Given that that source is governments, the control ought to shift towards meeting policy goals. Some of the problems can be solved by further decoupling discovery from production and ensuring that companies have sufficient incentive to contribute to discovery but will not be motivated by the prospect of controlling production long into the future. Some of the problems need to be addressed by multilateral organizations, most likely the World Health Organization, holding significant reserves and exercising appropriate control over mechanisms such as COVAX, the body thrown together to distribute Covid-19 vaccines. Currently, there is an imbalanced structure of bodies, including the private foundation Coalition for Epidemic Preparedness Innovations (CEPI), Gavi-the Vaccine Alliance—a multilateral voluntary organization, along with numerous bilateral agreements to donate vaccines and/or money, most significantly by China and the United States.
If this is successful, then we can work on finding ways to ensure that deployed resources can be effectively used for year-round, routine production of childhood diseases vaccines, flu and pneumonia vaccines, etc., to ensure local production and reduce reliance on imported medicines. We can also be better prepared to use facilities for emerging diseases such as experiences with SARS, Ebola, Zeka, etc., and for major endemic diseases as vaccines become available for malaria, TB, and schistosomiasis.
About the authors: Jonathan Liebenau is an Associate Professor (Reader) at the London School of Economics and Sherif Kamel is a Professor of Management and Dean of the School of Business at The American University in Cairo.
9 December 2021
Issue #19
Discovery, production, distribution, and finance problems need different solutions👍Such an interesting read. Great analysis to a systemic problem.
I really enjoyed reading about how we need to disentangle many of the conflated issues. To unpack the systems thinking approach and isolated smaller issues and target them directly and quickly. Very insightful piece