Economic Affairs

The scandal of vaccine inequity

As virus variants spread, both rich and poor countries are being hit.

Many rich countries have secured enough doses to vaccinate their people several times over and are mostly hoarding the excess doses.ST PHOTO: CHONG JUN LIANG

Last Wednesday, the World Health Organisation (WHO) and other sponsors of the Covax programme, which provides Covid-19 vaccines to poor countries, announced that they would fall short of their target for this year by almost 30 per cent. Instead of two billion doses by the end of the year, the new target will be 1.425 billion doses. Even that looks ambitious.

As at Sept 10, only about 250 million doses had been delivered to 141 countries, more than 80 per cent short of the new target. This is terrible news, not only for poor countries which rely on Covax for their vaccines, but also for the rest of the world.

The global inequity of vaccinations is shocking. At the meeting of the health ministers of the Group of 20 (G-20) last week, WHO director-general Tedros Adhanom Ghebreyesus pointed out that 10 countries have administered 75 per cent of all vaccine doses, while low-income countries have inoculated barely 2 per cent of their people.

Many rich countries have secured enough doses to vaccinate their people several times over and are mostly hoarding the excess doses. The promise by the Group of Seven industrial countries (G-7) that 870 million excess doses would be shared with poor countries has gone unfulfilled, falling short by at least 80 per cent. Healthy adults and teenagers in rich countries have been vaccinated twice while hundreds of millions of front-line health workers and the elderly in poor countries are still waiting for their first dose. The way things are going, many will have to wait till 2024.

As hundreds of thought leaders around the world - Nobel laureates, scientists, public health experts and former heads of state - have pointed out, this is morally, epidemiologically and economically indefensible. It is not only a tragedy for poor countries in terms of preventable deaths and mass suffering, but is also to the detriment of rich countries.

Short-sightedness

As the pandemic persists, the epidemiological short-sightedness of vaccine inequity is becoming increasingly obvious. Infections are continuing to surge even in highly vaccinated countries which thought they had Covid-19 well under control. Most countries are still unable to open their borders, even those which, like Singapore, have vaccinated more than 80 per cent of their populations.

The new infections have been largely driven by variants, or mutations, of the original Covid-19 virus, the most prominent of which - at the moment - is the Delta variant.

Research by the Rockefeller Foundation shows that variants are four to six times as likely to develop among largely unvaccinated populations. The higher the number of such people in the world, the more variants are likely to emerge, some of which, like Delta, will be highly transmissible and able to evade antibodies. Delta was not the first and it will not be the last. Indeed, newer variants called Lambda and Mu have already appeared in Latin America although these are not yet considered as serious as Delta. But as long as there are large numbers of unvaccinated people in the world, some serious mutations will inevitably occur.

In short, vaccine inequity will prolong the pandemic, even in rich countries.

Highly vaccinated countries are responding to the resurgence of infections by planning to deliver booster doses. Although some data from Israel appears to support the case for booster shots in at-risk individuals, the WHO has found scant evidence of their effectiveness. What is certain, though, is that booster doses in rich countries will exacerbate vaccine inequity by further reducing the supply to the developing world. As the WHO's director for health emergencies Michael Ryan said at a press conference last week: "We're planning to hand out extra life jackets to people who already have life jackets, while we're leaving other people to drown."

Economic folly

There is widespread evidence of the economic folly of vaccine inequity. Even fully vaccinated countries suffer economic damage if their trade partners are largely unvaccinated. Both their exports and imports are affected and they are unable to open their borders - as Singapore has experienced. The more open the economy, the greater the damage, particularly to sectors most dependent on open borders such as aviation, tourism, hospitality and retail.

Besides this, there are output losses associated with the periodic re-imposition of lockdowns and other restrictions as countries - even those that are highly vaccinated - try to control the surge of infections from variants. We have seen this recently with supply disruptions because of the closure of ports and factories in China and around the region.

Despite declines in hospitalisations and deaths in highly vaccinated countries, production is still disrupted by periodic closures of establishments and people being forced to isolate and take sick leave, which leads to absenteeism and losses in revenue and productivity. Such losses will continue to mount as long as waves of infections caused by Covid-19 variants keep occurring - in other words, as long as there are large numbers of unvaccinated people in other countries.

The International Monetary Fund (IMF) proposed vaccinating at least 40 per cent of the population in all countries by the end of 2021 and at least 60 per cent by the first half of next year. It estimated that the cost of this proposal, including the expansion of public health measures such as testing and tracing, would be around US$50 billion (S$67 billion). The potential benefits from the resulting faster end to the pandemic would amount to US$9 trillion by the end of 2025. About 40 per cent of the gains would accrue to advanced economies, which would also stand to collect around US$1 trillion in extra tax revenues. Funding this proposal "may possibly be the highest-return public investment ever", the IMF pointed out.


ST ILLUSTRATION: MIEL

These estimates were presented to the leaders of the G-7 at their meeting in Cornwall in June, but made little headway. The meeting of the G-20 health ministers in Rome earlier this month also produced no financing commitments.

Public health experts point out that spending on immunisation programmes such as vaccinating the world should be viewed not as costs, but as investments that save both lives and money, to the benefit of not only the countries that receive the investments but also those that fund them.

Every immunisation drive in history has produced multi-fold economic returns. For instance, a study featured in the health journal Lancet recently found that for immunisation programmes against 10 pathogens in 94 countries from 2011 to 2020, measured on a "cost of illness" basis, every US$1 invested had a return of US$26.10, taking into account averted costs of treatment and transportation, as well as savings in caregiver wages and productivity losses due to disability and death.

Restricted production

Vaccine inequity is perpetuated by the restricted production of vaccines, by design. The biggest obstacle to expanded global production is intellectual property (IP) rights that have been granted to the few producers of Covid-19 vaccines in Western countries.

Last year, India and South Africa petitioned the World Trade Organisation (WTO) for a temporary waiver on these IP rights during the pandemic, so that more producers can make the vaccines - which can be permitted under WTO rules. More than 90 countries, including China and the United States, have supported the proposal, together with at least 140 thought leaders and heads of government around the world. But the proposal has been blocked by the European Union and a few other advanced economies as well as pharmaceutical industry lobbies.

The arguments put forward for blocking the waiver are, first, that IP rights are essential for innovation by private companies to produce Covid-19 vaccines and, second, that developing countries don't have the ability to produce them. Both these arguments are bogus.

Much of the innovation that created the mRNA vaccines produced by Pfizer-BioNTech as well as Moderna came from the US National Institutes of Health and much of the research that went into vaccine development was funded by public bodies in both the US and Europe. It was also a culmination of collaborative work over many years by scientists around the world. When it came to Covid-19, it was Chinese scientists who first decoded the genome sequence, which enabled vaccines to be developed.

The alleged inability of developing countries to produce vaccines is also false. There is a developing countries vaccine manufacturing network that has been around for more than 20 years. It comprises 44 manufacturers in 16 countries that produce over 40 different types of vaccines, including the world's largest vaccine producer, India's Serum Institute.

Given access to IP rights and some technology transfer - which can be paid for via a share of royalties - many of these producers would be able to produce Covid-19 vaccines, including the mRNA varieties, which are already being made in China. The WHO has urged pharmaceutical companies to join its Covid-19 Technology Access Pool for sharing know-how, data and technology, but no major vaccine manufacturer has signed up.

The real reason for the reluctance of Western vaccine producers and their government backers to waive IP rights and share technologies is that they view vaccine manufacturing through a commercial lens, rather than as a public health priority; vaccines are considered private assets rather than public goods.

From a commercial viewpoint the best scenario for these companies would be for the pandemic to linger and become endemic, so they can continue to provide booster shots year after year, while limiting competition from other producers, which would give them pricing power.

In the midst of a pandemic, what this amounts to is a massive market failure. Governments need to address it, either collectively through the G-7 or G-20, or individually - for example, by the Biden administration mandating that Moderna share its technology with other producers to expand global production and bring an end to the pandemic.

The cliche that "nobody is safe until everybody is safe" is widely repeated like a mantra. But almost two years on from the start of the pandemic, it is still not reflected in policies. Vaccine inequity, which is at the core of the problem, is more than just a folly. It is a scandal.