GAVI COVAX FACILITY: Questions on access, pricing & governance

A first look at Gavi’s COVID-19 Global Access COVAX Facility (Preliminary Technical design)

Gavi – The Vaccine Alliance, is putting together a plan to devise the supply of COVID19 vaccines when they become available, to those who need it.

The question of how should the world work towards equitable access, is an incredibly complex one. Gavi’s plan, does not answer this question, yet. The keys to this question,  may lie in how the politics of vaccines plays out in the coming weeks and months.

Gavi’s plan, a work in progress, raises worrying questions on its ability to ensure equitable access, affordable pricing and fundamental questions on governance. 

To put it very simply, the plan promises an assured market to manufacturers by getting countries on board for a fee and more, in order to access vaccine doses for their populations. In reality, of course, it will be much more complex given the diversity of countries, the kinds of vaccine candidates, manufacturers’ conditions and above all, the politics surrounding vaccine negotiations.

Initial reading suggests that richer countries can secure “wider” access to vaccines and poorer countries’ access will be subject to financing via Official Development Assistance and possibly only for the most needy segments of their populations. This flies in the face of lofty aspirations of vaccines as a global public good. Further, by offering promises of tiered pricing approaches for COVID19 vaccines to keep manufacturers interested, the goal of equitable access may not be met. In addition, rising vaccine nationalism means that countries are striking bilateral deals with companies – this also puts Gavi’s plan which seeks to pool demand to achieve greater scale and negotiating power, at risk. This is worsened by the assumption that shrinking ODA will help pay for access in poorer countries.

Simplistic economic solutions of matching markets and suppliers, is often made messy by political factors much beyond the control of even well-funded and strong actors such as Gavi. (Global health is at the near centre of fundamental shifts in geopolitics as we speak.)

This story which is based on documents and conversations with those familiar with the plan, looks at some of these issues in detail. 

Gavi’s ambitious goal has been mapped in a new document, which is currently under discussion and is expected to be finalized by September this year. In its current form at more than 30 pages, the vision is supported by complex financing, incentivising strategies to bring vaccine markets and manufacturers together.

While details on how this will actually work, is still being put in place, in a Gavi document for WHO member states, dated June 11, it says that “We are approaching the end of the preliminary design phase and are rapidly working to finalize design and start implementing”. (Remember that the Gavi’s new innovative finance structure – an Advanced Market Commitment for Covid19 vaccines at the Global Vaccines Summit earlier this month, with an initial goal to raise $2 billion, had already raised $500mn. In addition, AstraZeneca became the first vaccine manufacturer to sign up to the Gavi COVAX AMC, guaranteeing 300 million doses of the COVID-19 vaccine it is developing in collaboration with the University of Oxford.) 

Geneva Health Files has reviewed a version of Gavi’s COVAX Facility for COVID19 vaccines. The document called preliminary technical design is titled COVID-19 Vaccine Global Access (COVAX) Facility, dated 11th June.  (A copy of the document was shared by two independent sources.)

This blogpost will discuss some important features of this comprehensive document and also place it a wider context – where these decisions will actually be shaped.

Background: COVAX Facility in the ACT Accelerator

Gavi – created twenty years ago to finance vaccines in the poorest countries  – was somehow was thrust with this responsibility of devising a plan for access and supply for COIVD19 vaccines. Along with CEPI, it plays a lead role in the multi-stakeholder Access to COVID-19 Tools (ACT) Accelerator that was established to work on equitable access to new COVID-19 therapeutics, diagnostics and vaccines. The COVAX Facility sits within this pillar, the document says.

(MSF has already raised questions on Gavi’s competence on working on this – especially negotiating on behalf of high-income countries – instead of WHO’s Pandemic Influenza Preparedness (PIP) mechanism. MSF cites WHO’s PIP Framework as an example of WHO’s global normative and operational role to develop public health instruments that help to prepare for and respond to global pandemics. There are provisions in the framework that can require manufacturers to set aside specific quantities of medicines or vaccines in the case of a global influenza pandemic)

While CEPI is responsible for Development and Manufacturing and is making direct financial investments to support R&D and manufacturing expansion of promising candidates; WHO is responsible for policy and for developing an allocation framework. While seemingly technical, discussions around allocation are highly political and contentious. WHO is developing guidance on the use of vaccines via the Strategic Advisory Group of Experts (SAGE) on Immunisation. (Read more on this later in the story)

Gavi explains that the COVAX Facility is “a risk-sharing mechanism – reducing risk for countries concerned about failing to secure access to a viable vaccine and reducing risk for manufacturers concerned about investing without assured demand.”

THE SALES PITCH

What is in it for countries:

Gavi says that countries who participate in the facility will need to make binding commitments in exchange for access to doses. It asks countries to financially commit to purchase a pre-defined number of doses and pay an upfront financial contribution proportional to the size of the overall financial commitment/ number of doses, give away dose contributions voluntarily from existing bilateral deals (as applicable). In return countries get access to doses at Facility-negotiated price, access to a variety of vaccine candidates, including those that may be better suited for specific subpopulations. It also says countries can benefit from affordable price as a result of economies of scale and reduced competitive dynamics among countries (since they pool their demand via the Facility). In addition, some countries can also get financing and programmatic support. 

What is in it for Manufacturers:

The COVAX Advance Market Commitment that was launched earlier this month, provides demand certainty to manufacturers in exchange for timely dose supply. On the back of country commitments, the Facility offers manufacturers, to procure a pre-defined number of doses. It seeks to make payment conditional on regulatory approval, WHO prequalification. It also helps manufacturers to receive “minimal returns pricing”.

The Facility will use two instruments based on the “pull incentivizing mechanism”: one, manufacturer-specific volume guarantees to procure vaccines that meet the agreed WHO “Target Product Profile”; two, market-wide demand guarantee to provide continued incentives and assurances to manufacturers to expand production capacity, signaling long-term market viability according to the document. The Facility provides commitment to “at-risk manufacturing scale-up”. Gavi believes it will be able to secure assured supply in return. It adds that as these volume guarantees are manufacturer-specific they may include differential terms, reflecting a diverse COVID-19 vaccine manufacturer base and needs.

The Facility, Gavi explains, will work together with other efforts within the ACT Accelerator including “push” investments by CEPI and the Bill & Melinda Gates Foundation. “In order to ensure complementarity with and effectiveness of the COVAX Facility’s pull incentives, it is expected that partners doing push funding will share information with the Facility to avoid double paying and in general Gavi will align efforts with the providers of push funding, inclusive of other providers outside the ACT Accelerator where feasible,” the document says.

THE CRUX:

Who gets it first:

Even with more than 8 million cases of COVID19 dispersed globally, there is a “first”. On paper, Gavi says, that all countries are invited to participate in the facility by making a commitment to purchase doses and a contribution in the form of cash/ doses. But it seemingly puts countries in “classes”, simply based on their ability to pay as KEI formulated in its blog. And what’s more paying members get additional benefits including a greater proportion of their populations getting access to doses.

Essentially Gavi proposes a categorization of participating countries in two ways, self-financed or donor-supported. I cite sections of the text from the document here in blue, emphasis mine

(Parts of this document, sound like membership conditions for an elite club): 

Fully self-financing countries (HICs, UMICs) contribute directly to the Facility by committing to purchase the doses to vaccinate the highest priority populations. These countries confirm this commitment by making upfront financial contributions to the Facility, proportional to the number of doses they will receive. These contributions will act as down-payments against future vaccine delivery and will enable the Facility to enter into advance purchase commitments for future vaccine supply. As supply becomes available, a ring-fenced proportion of that real-time vaccine production will be directed to the fully self-financing countries to be used by these countries according to the guidance provided by their national bodies. The exact amount of ring-fenced real-time production still needs to be determined, but could be a proportion of population. Self- financing countries that engage in bilateral deals would be encouraged (but not required) to donate any doses they may not require to the Facility.

And then, there is more:

Timing of commitment to the Facility will make a difference. Fully self- financing countries that join the Facility before early deals with manufacturers are concluded (date to be determined) will be able to access the ring-fenced volume for self-financing countries, while those that commit after this point would not have this assurance.

…Committing early assures full self-financing countries of a secured allocation and the benefit of their contributions.

..Other fully self-financing countries would potentially still be able to participate in the Facility beyond this point but would only receive available volumes from existing and additional supply agreements without the assurance of the ring-fenced distribution. For those who commit early to support time-sensitive advance purchase commitments, this provides reassurance that they have a secured allocation and will realise the benefits from their contributions…

On the other hand:

Funded countries (LICs and LMICs) are those whose financial commitments for participating in the Facility are covered by official development assistance (ODA). They also get access to volumes as soon as it becomes available to meet requirements to vaccinate the highest priority populations. The volumes specifically directed to these funded countries would be allocated across them using guidance from the global allocation framework under development by WHO, which builds on WHO’s policy recommendations on priority target populations.

Elsewhere in the document, it states that

“This allocation framework will serve as the basis for allocating supply secured through the COVAX Facility for the donor-supported country participants, in a fair and equitable manner.”

The above suggests that guidance from WHO’s allocation framework applies only to donor-supported countries. It is not clear how this will work. Does this mean, that richer countries do not need to follow WHO’s guidance on vaccine allocation? If true, this not only runs counter to principles of equity but also possibly to scientific and epidemiological considerations.

THE FINANCING:

Gavi hopes to wield its COVAX AMC to secure access to timely and sufficient supply of vaccines to cater to LICs and LMICs, including IDA-eligible Small Island Economies.

In a note to the media, Gavi explained that the COVAX AMC “will be funded by overseas development assistance with an initial fundraising target of US$2 billion to immunise health care workers and other high-risk individuals and create a flexible buffer of doses to be deployed where they are needed most.” As mentioned earlier, the AMC has already received seed funding of over US$ 500m at its launch – primarily ODA from OECD countries.

The document mentions that the COVAX AMC, though an innovative finance mechanism familiar to its donors, “will not be identical to other previous AMCs.” (For one, this Facility overall, expands the mandate of Gavi – from catering to immunization needs of poorer countries, the pandemic provides the agency, with the opportunity to service a wider group of countries, a source explained.)

In addition, its broader efforts for COVID19 vaccines will be supplemented by “additional innovative finance building blocks to enable joint investment in the advance purchase commitments on behalf of HICs and UMICs that choose to participate in the Facility and would not be financed through ODA.”

It clarifies that “While there will be separate sources of financing, advance purchase agreements will be integrated.”

Gavi believes that these instruments will ensure that the Facility is capitalised appropriately to allow for potential upfront payments before doses are available to recipient countries as required in the manufacturer agreements. In addition, “All COVAX volume guarantees offered by the Facility to manufacturers under the agreements are back- stopped by secured capital and do not create a financial exposure for Gavi.

“These conditions imply that the COVAX Facility will seek capitalisation from contributions of all countries in the form of (i) upfront payment in cash and (ii) secured future payments.” Also, “All participating countries, either externally or self-funded, hold the adequate financial exposure to each manufacturer agreement.”

It is unclear what impact these kinds of conditions will have on country finances.

THE PRICING

On pricing, the document states:

Pricing principles will reflect manufacturers’ commitment to seek minimal returns during the short-term acute phase of the pandemic, with potential evolution over time to, for example, tiered pricing to support longer term sustainability and affordability of the vaccines for all countries.

This reads very much like a business-as-usual “tiered-pricing” approach, far from the innovation that a pandemic of this magnitude requires.

While the document acknowledges that the “pandemic require both buyers and suppliers to consider exceptional approaches to pricing,” it prioritizes “time-to-market and sufficiency of volumes for its members as primary objectives, with affordability as a secondary objective.”

The document states:

Vaccine prices may reflect the range of cost of goods (COGS), vaccine profiles, developer and manufacturer profiles, levels of support received and risk incurred during development.

Vaccine prices may reflect different time periods in the disease evolution and associated variations in market conditions and commercial opportunity.

This acknowledges the broad willingness from suppliers to consider the vaccine as a global public good in the short-term, to meet global requirements for priority populations, and to evolve later to a more market-based approach. Given the pressing public health need, it is expected that manufacturers would seek minimal returns. Such a model could provide incentives to as wide a range of countries as possible to join the COVAX Facility for the short-term period, while establishing a blueprint for a future lower price for LICs/LMICs.

Vaccine prices may be tiered, reflecting countries’ varying ability to pay.

The Facility proposes a mixed pricing approach that will evolve over time:

Short-term period to reach priority populations and control the pandemic: A flat pricing strategy (with firms able to set their own price, which then applies across countries participating in the Facility) will be encouraged, given existing bilateral agreements between a number of countries and manufacturers and broad expectations to price the vaccine as a global good during the short-term period. Such a pricing structure should incentivize broad country participation in the Facility.

However, some manufacturers may prefer tiered pricing; the Facility will accommodate that request if the price levels offered for each tier are considered suitable. If a flat pricing strategy is proposed by manufacturers, a cross-subsidization mechanism may be applied to establish differential pricing charged to countries to account for varying ability to pay.

Beyond this initial short-term period, the market is expected to evolve towards a traditional, market-led, tiered pricing approach (noting that the Facility, itself, will be time-limited).

THE ALLOCATION:

While countries will be grouped according to the way their contribution to the Facility is financed, the allocation is suggested as follows – in the document – I quote verbatim here:

Each group of countries will have a ring- fenced proportion of real time vaccine production. The criteria to determine the size of this ring-fenced proportion is still to be determined but could be calculated based on proportion of population. Within each group of countries, doses from this ring-fenced proportion will then be allocated in the following way:

Fully self-financing countries: The Facility will work to secure enough vaccine doses to enable all countries in this group to vaccinate e.g. 20% of their populations, to ensure that every country can immunise their highest priority populations. Ring-fenced doses for this group will be distributed evenly amongst all countries in the group until each country has received enough doses to vaccinate this proportion of their population. Whilst the Facility will determine the number of doses that a country receives, it will not interfere with a country’s sovereign right to follow guidance from their own national bodies about how they use any fully self-financed allocated doses once they receive them.

…Once all countries in this group have received sufficient supply from the Facility to cover e.g. 20% of their population, any additional supply of vaccines would be offered to countries in line with a needs-based allocation framework.

Funded countries (supported by ODA): The Facility will work to secure enough doses to enable all countries in this group to vaccinate at least their highest priority populations. Ring-fenced doses for this group of countries will be allocated to, and distributed across, countries according the WHO Allocation Framework, which is based on transparent ethical and public health criteria. This will require a clear picture of applicable demand from countries. In addition, WHO will provide policy recommendations to countries on use of vaccines, which will be particularly important for developing countries which may have limited capacity to conduct a robust epidemiological assessment.

Obligations for participating countries:

Gavi spells out obligations for participating countries:

“… all countries will be asked to make a binding financial commitment to purchase doses for the first year from the Facility. Countries will make an upfront financial contribution to the Facility, proportional to the size of their overall financial commitment, which is itself proportional to the required number of doses. These contributions will act as down-payments against future vaccine delivery and will be paid by countries to the Facility according to a payment schedule. The Facility will use the financial commitments and upfront financial contributions to enter into advance purchase commitments with manufacturers. Once doses are available, countries will realise their initial commitments to purchase doses and will receive doses in return.”

IN CONCLUSION

Geneva Health Files, emailed Gavi with questions on pricing, minimal returns, determination of upfront contributions for countries and conditionalities for manufacturers.

The following is the response from a Gavi spokesperson:

“It is too early to go into detail as discussion between partners and stakeholders on the COVAX Facility are still on-going. However as you might be aware, the Gavi Advance Market Commitment for COVID-19 Vaccines (Gavi COVAX AMC) was launched at the Global Vaccine Summit on June 4. The Gavi COVAX AMC is part of a wider international initiative called the ACT Accelerator that aims to accelerate the development, production and equitable access to new COVID-19 diagnostics, therapeutics and vaccines. Gavi co-leads the vaccines pillar of the ACT Accelerator alongside the Coalition of Epidemic Preparedness Innovations (CEPI) and the World Health Organization (WHO). Within this role, Gavi is responsible for coordinating the development of the COVID-19 Global Access Facility (COVAX Facility) whose purpose is to guarantee access to substantial volumes of vaccines for all countries. In order to ensure affordability and availability of vaccine supplies for lower income countries and lower-middle income countries, Gavi launched the Gavi COVAX AMC financing mechanism as a first building block of this COVAX Facility. Design concepts for the AMC were shared for feedback with partners and stakeholders, including civil society organisations.”

The role of WHO:

One of the trickiest part of the puzzle in some sense, lies with WHO. DG Dr Tedros has already indicated that an allocation framework is in the works. And it is expected to be announced next week.

The Gavi document states that

WHO and its Strategic Advisory Group of Experts (SAGE) on Immunization will define the vaccination recommendations and strategy for COVID-19 vaccines based on disease epidemiology, vaccine characteristics, public health impact, and other considerations. While these recommendations will only be available once specific vaccines can be considered, the Gavi Secretariat, in consultation with partners, has identified potential COVID- 19 vaccination scenarios to inform planning assumptions and forecasts of dose and funding requirements. These do not constitute a presumption of the eventual vaccination recommendations from WHO and SAGE.

  • First, protecting the most vulnerable by preventing infection, serious illness and deaths among healthcare workers and older adults (65+ year olds) and maintaining a buffer to stop uncontrolled outbreaks or vaccinate other target groups such as those with co-morbid health conditions.
  • Second, minimizing societal and economic disruption by immunizing the general workforce.
  • Third, subject to such data on transmission dynamics, stopping transmission by immunizing additional virus spreading populations.

As mentioned earlier in this story, it appears that as per Gavi’s plans, only donor-funded countries in the Facility will get their doses based on WHO allocation framework.

Sources familiar with the process said that it is not entirely clear whether WHO’s framework will provide guidance for vaccination only within countries, but also determine allocation between countries.  While epidemiological considerations (including target populations and target product profile) lie with the technical experts, it is understood that the DG is working on getting political commitment from the capitals for making vaccines a global public good.

WHO’s constitution and the COVID19 response resolution empower WHO to decide on these matters, sources said.

Criticisms to COVAX

In a response to queries from Geneva Health Files, Kate Elder, senior vaccines policy advisor, MSF Access Campaign said, “Our main concerns at the moment are the lack of transparency around the Gavi design process and the deals being struck. We also do not think that upfront hefty & risky advance payments to pharma without clear conditionalities are the best approach (especially considering the high failure rate of vaccine development, especially so far up the pipeline).”

On the COVAX AMC, she said, “This is similar to what was done for the previous AMC (for pneumococcal conjugate vaccines/PCV), which had only partial success in achieving its objectives. Any investments Gavi makes should be guided by clear criteria that steer the use of these public monies, so that we are investment in candidate vaccines that align with a profile outlined by WHO (the TPP). So far, it doesn’t seem that Gavi has any criteria guiding their COVAX Facility’s investment plans, or at least, it hasn’t been transparently communicated.”

The Gavi document, in its current version, has said precious little on implications for management of intellectual property rights. In a blogpost, Knowledge Ecology International has said, “The COVAX Facility’s technical design paper is silent on deep technology transfer including language on know-how, patents, and other intellectual property rights.”

The Politics:

Gavi will not be immune to politics coming in the way of making access to COVID19 vaccines wider.

It articulates its concerns thus:

“The competition for vaccine candidates and manufacturing capacity could lead to a global bidding frenzy, driving up pricing as countries ‘panic buy’ with poorer countries left behind. Competing funds could ‘cannibalise’ each other and give very confusing market signals. Finite manufacturing inputs and capacity would also end up being locked into individual agreements, not available to support production of the vaccines that end up with the most appropriate characteristics, and even countries with successful candidates may subsequently find themselves without sufficient manufacturing capacity to rapidly produce the required quantities. Furthermore, due to the global nature of supply chains, a lack of international coordination could prevent materials crossing borders to where they are most needed, further paralysing vaccine production. It is an unfortunate reality that vaccine nationalism could result in export controls over needed components or vaccines.”

And yet, this is precisely what is already happening.

Despite the public calls for COVID19 vaccines as a global public good, in reality, this has allegedly “scared” big European countries, a source witnessing these discussions said. The creation of the Inclusive Vaccine Alliance is a case in point. This includes Germany, Italy, The Netherlands and France. The Alliance has already signed a deal with AstraZeneca

“There seems to be a disconnect between foreign policy goals and the health policies of some countries, where the latter is dictated by domestic political compulsions”, the source added.

Earlier this week, the EC also has set out a EU coronavirus vaccine strategy published June 17, 2020, that essentially assures all European nations irrespective of size on procuring vaccine supplies. (It is understood that the Inclusive Vaccine Alliance founded by these four big countries, will now join wider EU efforts instead.)

Further, Gavi’s assumption that ODA from EU countries and others, will help finance the participation of low income countries and others, may become problematic. There are enough indications on cuts in ODA  on account of shrinking fiscal space of major economies.

Without the U.S., and big European countries, Gavi may not find it easy to raise funds for the COVAX AMC.

Sources aware of the discussions around Gavi’s plans, say that the immunization agency is hoping to capitalise on the newly gathered momentum of its successful replenishment that has by some accounts raised more than $10 billion. It hopes countries will raise additional funds for COVAX on the back of this political momentum. “The organization is counting on political capital to raise more funds for the COVAX Facility”, a source requesting anonymity said. (It is understood that Gavi’s replenishment funds, are not earmarked for COVID19 vaccines.)

Next week, Gavi’s board is scheduled to meet on June 24-25th. In addition, EC’s global Pledging Summit for COVID19 response will conclude on June 27th.  

Source: Gavi Covax Facility – Preliminary Technical Design

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