This is an excerpt from the March 30, 2021 edition of Medically Necessary, a health care supply chain newsletter. Subscribe here.
The big challenge: Estimates vary widely, but the world will likely need billions — maybe more than 10 billion — doses of COVID-19 vaccines to stop the spread of the new coronavirus.
- Drugmakers are aiming to produce 14 billion doses of COVID-19 vaccines this year, according to a tally of disclosures by vaccine manufacturers.
That’s much more vaccine than the world typically produces in a normal year. That number is also hard to pin down. However you slice it, producing enough COVID-19 vaccines will be an enormous challenge.
- The World Health Organization estimated that 5.5 billion doses of vaccines were purchased in 2019. In 2016, another WHO program estimated that existing infrastructure operating at maximum capacity could produce 6.4 billion doses of flu vaccine.
- Supply chain researcher Prashant Yadav estimated the world needs 1 billion to 1.5 billion vaccine doses in a normal year on an episode of the podcast Trade Talks.
Vaccine manufacturing supply chains are spread out across the globe. Some researchers say sharing information will be critical to optimize production. Others say governments will need to invest heavily in infrastructure to avoid bottlenecks.
The bottlenecks: Earlier this month, a coalition of vaccine manufacturing trade groups and international public health organizations (CEPI, COVAX, IFPMA, DVCMN and BIO) hosted a summit to discuss proposals for scaling up global vaccine manufacturing.
In a background document prepared for participants, organizers identified a list of raw materials that could disrupt vaccine production. Here are a few.
- Bioreactor bags: In February, the Financial Times reported that some manufacturers were struggling to get the large, plastic bags needed for production of several vaccines.
- Lipid nanoparticles: The Washington Post reported in February that Pfizer and Moderna were struggling to get enough of these fat molecules needed for their new mRNA vaccine platform.
- Glass vials: A recent Government Accountability Office report noted that glass vials used to store vaccines were also in short supply.
The summit’s organizers also pointed out that hoarding behavior and trade barriers could cause big problems for efficiently producing vaccines.
- “We were having conversations with some of the upstream providers of these critical supplies, hearing about lengthening back-order times and compensatory behaviors of the companies that rely on these materials — placing larger orders because they were concerned they were going to need to stockpile or hoard,” Coalition for Epidemic Preparedness Innovations CEO Richard Hatchet told STAT in an extensive Q&A.
More visibility: Adding more visibility to the vaccine supply chain could help governments and manufacturers make better decisions and speed up production, according to Robert Handfield, a supply chain researcher at North Carolina State who participated in the manufacturing summit.
At the summit, he proposed building a system that would show the inventory of key raw materials at supplier and manufacturer sites.
- “Anyone who understands supply chains knows you need data,” he told FreightWaves. “What we’re proposing is that we get better information, in the form of some kind of control tower that would be adjudicated by the World Trade Organization [and] CEPI.”
That control tower could facilitate the flow of raw materials, Handfield explained in a recent blog post. If manufacturers could confirm their supply was secure they wouldn’t need to hoard, which might free up resources for other producers.
That kind of system would require an enormous amount of international cooperation, and for-profit companies may not be enthusiastic about sharing information with competitors.
Handfield said there could be firewalls to prevent competing companies from seeing raw numbers. Instead, they’d see relative inventory levels. But even with those firewalls, he predicted companies would need additional incentives.
- “We have to create contractual incentives for firms to participate,” Handfield said. “There’s value in these organizations just to be able to gain market intelligence themselves. Today they don’t have any information on the market. … We could provide them with access to intelligence.”
Sanchoy Das, a supply chain researcher at the New Jersey Institute of Technology, said he’s not optimistic about this kind of international cooperation in the immediate future while many materials are still in short supply.
- “When there is sufficient supply everyone is willing to shake hands,” he told FreightWaves. “We can have WHO … manage the supply so that we can all benefit. Right now when we have a shortage of supply, all kinds of national borders, political borders kick in.”
More factories: Das said the main focus should be on simply adding additional infrastructure: more factories to make the vaccine.
- “Right now, [when it comes to] the actual vaccine production, we are maxed out,” he told FreightWaves. “They used the Defense Production Act to get the low-hanging fruit. … After that you have to build a new plant or access new facilities.”
The simplest way to speed up production is to simply improve the efficiency of existing manufacturing sites. Das said that in many cases that has already happened. In February, Pfizer announced that it had cut production time nearly in half through incremental improvements. However, Handfield argued that there’s still opportunities on that front.
- “Normally, development of a vaccine, and production, takes place over five to 10 years. Over that process, there’s a lot of productivity improvements that companies come up with,” he said. “There’s still a lot of room for productivity improvements.”
After those options are exhausted, the next step is retrofitting existing facilities to produce COVID-19 vaccines, a process that is already in full swing. Merck’s high-profile partnership with Johnson & Johnson is a good example. However, Das doesn’t expect Merck’s facility to ship any Johnson & Johnson vaccine until October.
- “It costs a lot of money to change these plants or prepare them for this particular vaccine,” he said. “Any effort like that, we are looking at multiple months.”
The most expensive and most difficult option is to build new facilities from scratch. In February, AstraZeneca announced it was working with a contract manufacturer in Germany to build new production capacity, but it won’t come online until the end of 2022, according to a press release.
The price tag and timeline associated with building new capacity makes it a dangerous bet for drug manufacturers, Das said. If boosters are needed each year and demand for COVID-19 vaccines stays high, then it could pay off. If vaccines effectively squash the virus, the extra capacity could sit idle.
- “If the pandemic goes away … and a company spent a huge amount of money to build this facility and now it’s selling at the same price as a flu vaccine,” Das said, “then you would have all kinds of economic issues.”
More investment: During a recent congressional hearing, Tom Bollyky, a fellow with the Council on Foriegn Relations, called for a version of Operation Warp Speed on a global scale to finance improvements to manufacturing capacity.
- “This initiative can work with governments and development-finance institutions to provide the support, assurances and trained personnel that vaccine sponsors will require to transfer technology and tap unused contract vaccine manufacturing that still exists in well-regulated markets,” he told lawmakers earlier this month.
In a recent essay, Bollyky and Chad Bown of the Peterson Institute for International Economics wrote that this effort would need a global administrator to direct government investments across the supply chain, from raw materials to finished vaccines.
- In addition, they propose incentivizing countries that produce vaccine inputs, but not finished vaccines, to scale up production capacity by guaranteeing access to future vaccine doses.
Participating countries would also have to agree not to stop exports of vaccines or vaccine supplies to participate in the initiative Bollyky and Bown are imagining.
Feeling optimistic: Scaling up global vaccine manufacturing and getting all the stakeholders to cooperate is a daunting task, but both Das and Handfield said they’re feeling optimistic.
Handfield said he’s hopeful that the World Trade Organization’s new Director General Ngozi Okonjo-Iweala will be able to facilitate the kind of international cooperation needed right now.
- “We think that she can take a lead in helping to drive this forward,” he said. “There’s still a lot of people who are not comfortable with the idea of a third-party adjudicator managing this thing, but I think it’s required and hopefully we’ll get there.”
While current supply shortages make widespread international cooperation more difficult, Das said he can see it happening relatively soon.
- “I feel that will all occur a few months down the line,” he said. “But today, everyone just wants to get their own problems solved.”