Market Access Director Brett Gardiner, Consultant Suzan Serip and Analyst Artemis Rizoglou explore the various SARS-CoV-2 vaccine supply deals that have been struck around the world.
As clinical trials for SARS-CoV-2 vaccines are still ongoing and final results are not expected until earlier than this autumn, in recent months we have witnessed an increasing amount of supply deals between governments and vaccine manufacturers.
What deals have been struck?
At the end of July, the UK signed a deal with Sanofi and GSK for 60 million doses of the vaccine they are developing. This was after having recently secured 90 million doses of 2 SARS-CoV-2 candidate vaccines being developed by Valneva in partnership with Pfizer and BioNtech. And this is in addition to the previously secured 100 million doses of the Oxford University ChAdOx1 nCoV-19 AZD1222 vaccine being developed by AstraZeneca. If all trials are successful (and there are very early but promising indications that the Oxford University vaccine might provide immunity) the UK alone would have secured over 250 million doses of SARS-CoV-2 vaccines. If we assume a booster dose may be required (as early research on the Oxford vaccine suggests), there could be sufficient quantities to cover at least 2 seasons of vaccinations for the entire UK population.
This portfolio looks encouraging for the UK – and whilst we are quietly optimistic – in reality the recorded overall success rate of vaccines for infectious diseases is marginally above 30%, meaning that under “normal” development conditions (over a decade timeline) only 1 in 3 vaccines would reach the intended population. If this happens during these highly accelerated pandemic research conditions, the UK would have now secured enough doses for covering only one season of vaccinations and only for a targeted population. But vaccine development timelines are not aligned, and while some of the vaccines may be supplied earlier, supply-chain capacity limits mean most of them will only be distributed from mid-2022. This means that the current deals may only secure a basic supply of vaccines for a prioritised population and future deals are to be expected sooner rather than later.
The COVID-19 pandemic has started a race that goes beyond the desire of manufacturers to be first to the market with a successful SARS-CoV-2 vaccine. There is a parallel race between governments to address some of their economic, geo-political and nationalistic interests and the UK was among the first to align these – both as major funder and buyer.
In this race, the US government, another major funder behind the development of a vaccine, was also quick to announce in late May a deal with AstraZeneca for 300 million doses. The US provision was recently completed with a 600 million doses supply agreement for the Pfizer and BioNTech vaccine (which is still to provide first results). With only 900 million doses secured for a population of more than 320 million, it might seem that the US is behind in the race. But let’s not forget about Operation Warp Speed (a public–private partnership initiated by the US Federal Government to facilitate and accelerate the development, manufacturing, and distribution of COVID-19 vaccines, therapeutics, and diagnostics) as well as BARDA/US vaccine funding deals with Moderna and J&J, which are yet to be capitalised.
While the US and UK have already inked deals for over 1 billion doses together, the EU (which started with a less coordinated vaccine funding approach) has only managed to secure 300 million doses from AstraZeneca and seems to be struggling to reach swift agreements as efforts are being delayed in negotiations over price, payment method and potential liability costs. According to Reuters, the EU is in talks with at least six vaccine makers but the negotiations with J&J are among the most advanced – pending an agreement on how to share liability costs in case of unexpected side-effects. While Sanofi is said to expect upfront payment for 300 million doses of the potential vaccine, the EU wants to pay in instalments while awaiting further vaccine efficacy data. A separate 500 million doses deal, which is being negotiated with Pfizer and BioNtech once the vaccine is authorised, may be able to address uncertainty around effectiveness, but concerns over potential price and budget impact have been raised. With a population of about 450 million, the EU is the one of the largest developed markets for coronavirus vaccine manufactures and news sealing supply deals with at least three manufacturers are to be expected sooner than later.
Moving away from the West, China, which was the first to invest in R&D into SARS-CoV-2 vaccines, has recently revealed positive results from a phase II clinical trial (CanSino) and positions itself among the leaders of the development phase. Yet to this day, it has failed to disclose deals with any other governments. SinoVac is investigating a live inactivated virus technology for the coronavirus vaccines and recently received approval for the initiation of a phase III trial in partnership with Butantan Institute in Brazil. Yin Weidong, CEO of SinoVac, says they are actively in discussion with several countries, including Indonesia and Turkey, but no concrete deals have been advanced yet. Meanwhile, CanSino is expected to start clinical trials in Canada soon, raising expectations around future supply arrangements and deals. With more than 1.3 billion inhabitants to vaccinate, China’s strategy to produce and supply vaccines both within and beyond its borders will be highlighted on the world stage. In a speech to the World Health Assembly on May 18, Chinese President Xi Jinping promised to make the vaccine produced in China a “global public good”– a statement which is yet to be interpreted - but according to Benjamin N. Gedan, a former regional director on the White House’s National Security Council, “If China produces the first coronavirus vaccine at scale, it would be an extraordinary diplomatic tool anywhere in the world”.
Meanwhile, close by in the region, Japan, one of the other major Asian markets with SARS-CoV-2 vaccines in advanced development (AnGes DNA and Shionogi Baculovirus Expression Vector System, BEVS, technology vaccines) and a strong preference for national R&D and production, is currently having discussions with AstraZeneca and J&J, with Pfizer and BioNtech recently securing a deal for 120 million doses of BNT162b2. Commentators suggest that this time Japan should relax localisation of national production and research to avoid making the same mistakes that occurred during the H1N1 pandemic.
In the low and middle-income countries (LMIC), ensuring equitable and broad access is paramount. AstraZeneca reached a licensing agreement with the Serum Institute of India (SII) to supply 1 billion vaccine doses. With GAVI and CEPI as main funders, they also signed the first advanced market commitment through the Access to COVID-19 Tools (ACT) Accelerator securing 300 million doses for $750 million for LMIC (roughly $2.5 per dose). However, this is far from sufficient to cover the 2 billion people living in LMIC- yet, there remains high expectations of the COVAX financing scheme that more than 75 countries have expressed interest in joining which will help provide funding for vaccines for up to 90 poorer countries.
However, big questions remain for major markets without advanced SARS-CoV-2 vaccines in development, such as Brazil, Canada and Australia. What vaccines will be procured, from which manufacturer (AstraZeneca seems to have covered their supply capacity already) and importantly at what price?
The question of price
Pricing of a SARS-CoV-2 vaccine is indeed a challenging topic. While China advocates for a vaccine as a global public good, AstraZeneca and J&J have committed to providing the vaccine at cost price during the pandemic (Astrazeneca deals reveal a $3-4 investment per dose in the EU, US and Brazil, J&J has once mentioned ~$10). Expecting a long term need of the vaccine beyond the pandemic, Moderna, Merck and Pfizer announced their intentions to make a profit once the vaccine is approved, and while everybody believed that the US–Pfizer supply deal could potentially set a ceiling price for the vaccine of $20 per dose, Moderna recently announced their intentions of setting a $50-60 price per course ($25-30 per dose) for their mRNA vaccine. In this currently unprecedented situation, pricing seems to be guided by different humanitarian, economic, reputational and political interests and framed within not (yet) transparent advanced purchase deals. But if COVID-19 is here to stay, we will undoubtedly witness changes in pricing policy once vaccine(s) are approved and are competing in the same market. In early April, we asked more than 70 payers’ across the US, EU, China and Brazil about their pricing expectations for a SARS-CoV-2 vaccine. The majority indicated that while pandemic pricing might be exceptional and will need additional healthcare budgets to be allocated, seasonal influenza may be a suitable pricing analogue.
In the past month, we have witnessed an acceleration in the race to secure a SARS-CoV-2 vaccine. However, to date, only 2 billion doses of vaccine candidates that are expected to be delivered during the next 12 months have actually been secured and split among major buyers. Even if all are successful, this roughly covers the needs of just a fraction of the global population. However, many manufacturers are yet to close their main deals and others with new candidates in development might transform the race. While there is glimmer of hope that an effective SARS-CoV-2 vaccine may be available soon, we must be prepared to deal with potential failures and manufacturing limitations as nations scramble for fast access.