Vaccine Week: How fast can it be distributed?

When we have a safe vaccine, how fast can we get it to enough people to end the crisis?

Welcome to Plugging the Gap (my email newsletter about Covid-19 and its economics). In case you don’t know me, I’m an economist and professor at the University of Toronto. I have written lots of books including, most recently, on Covid-19. You can follow me on twitter (@joshgans) or subscribe to this email newsletter here.


The most accurate way to describe the predominant government strategy with respect to Covid-19 is: wait for a vaccine. The theory is that once we have a vaccine, we give it to most people and we are done with the whole affair. Everything is back to normal.

If only it were so simple.

This week I will look at vaccines and explain why the awaited for ‘miracle’ won’t be so simple. The reason I want to highlight this is not to get everyone down. If I wanted to do that, there are easier paths for me — I’m an economist after all; being a downer is a character requirement. Instead, the longer we think a vaccine will be a miracle outcome that stamps an end date on the crisis, the less time we spend doing things to end the crisis that doesn’t involve a vaccine.

Simple history is enough to give us pause. Vaccines have wiped out viruses and diseases like measles, polio and, most successfully, smallpox, which itself had millennia of history. No vaccine has ever put an end to a pandemic. In recent memory, both SARS and Ebola had vaccine candidates incredibly quickly as these things go (in a manner of years rather than decades) but by the time they were available, the outbreaks had been crushed and there was no reason to vaccinate widely. TB, HIV, MERS and Zika never had one. Thus, to think that Covid-19 will end with the prick of a needle is to ignore history and believe that this time it would be different.

To be sure, there is enormous energy and resources going into vaccine development. And, on a historical scale, progress seems extremely rapid. Indeed, everything I want to talk about this week will be predicated on the optimistic scenario that we have at least one vaccine candidate, approved safe by credible regulators, in early 2021. What I want to discuss are the details. Once that happens, then what? I am going to argue that we will be far from done and there are scenarios in which we are not done at all.

To ease you in, today I’ll start light with: how do we produce and distribute vaccines quickly? Wednesday, I will turn to efficacy: will an imperfect vaccine cut it? Then, on Friday, I’ll look at the possibility that a vaccine might make things worse. To preface, I am not going all ‘anti-vax’ on this. I won’t be talking about distrust in regulations to certify the safety of vaccines. I am assuming it is something we want to take. In other words, I am sticking with things that could happen even if the system works as intended.


Producing doses

One of the great decisions made during the pandemic was that by Bill Gates to use the Gates Foundation to fund the construction of production facilities for 6 or 7 of the Covid-19 vaccine candidates even before they had achieved regulatory approval. Usually, the risks associated with that would require a wait and see approach but Gates realised that time was not on our side. Vaccine production could move forward by months even if that meant all but one of the plants might end up never producing anything.

Even that bold strategy is easier said than done. There are many raw materials that can be required to produce vaccines. It is not simply building a plant and adding a few chemicals and off you go. Many vaccine candidates have to be produced in a way that looks more like agriculture than chemical engineering. And that can mean some supply constraints on key inputs.

This was driven home in a piece last month by Scott Kominers and Alex Tabarrok in Bloomberg.

Vaccine supply chains contain some unusual links, including horseshoe crab blood, shark liver oil and an enzyme that’s one of the world’s most expensive products. Other links rely on novel manufacturing processes that have not yet been implemented at scale. Each link in the chain needs to be stress-tested and strengthened. For the potential weak spots, alternative manufacturing processes need to be considered and prepared.

Vaccines manufacturing requires a long series of biological processes, and avoiding contamination is crucial. Endotoxins, which are dangerous molecules shed by bacteria, are one source of contamination. To detect them, each batch of vaccine, along with its vials and stoppers, is tested with a substance called Limulus amebocyte lysate. The only known natural source of LAL is horseshoe crab blood — which means that the supply varies year to year, and we have to be careful not to deplete the crab population. Luckily, a synthetic version of LAL has recently been developed and approved by the U.S. Food and Drug Administration and the European health ministry. But companies need time to validate and prepare production to be ready for a Covid-19 vaccine.

Shark livers are another surprising link in the supply chain for some vaccines. The shark liver oil squalene, which is mostly used in cosmetics and sunscreens, is part of a vaccine adjuvant — a factor that accompanies a vaccine and amplifies its effects by giving an extra stimulus to the immune system. We should be able to repurpose squalene from the cosmetic market to aid in vaccine production, but it might be even better to use synthetic squalene. That can be produced under highly controlled conditions, but again, we need to prepare the production processes now. We don’t want vaccine delivery to fail because we don’t have enough shark liver oil.

This is certainly bad news and not just for sharks. For some of these materials, there may not be enough to produce billions of vaccine doses. And it gets worse.

DNA and mRNA vaccine technologies have shown promising results, and two of the leading vaccine contenders, from Pfizer Inc. and Moderna Inc., use mRNA technology. But mRNA has never been used to produce a commercial vaccine for humans, let alone at scale. And scaling these technologies may not be easy. In particular, mRNA degrades rapidly. To prevent this, it must be “capped” by a very rare substance called vaccinia capping enzyme.

Just over 10 pounds of this VCE is enough to produce a hundred million doses of an mRNA vaccine — but the current manufacturing processes for VCE require so much bioreactor capacity that making 10 pounds would cost about $1.4 billion. More important, global bioreactor capacity cannot support production at that level while also producing other vaccines and cancer-fighting drugs.

If we work hard now, we may be able to find more efficient means of producing VCE. Expanding bioreactor production and repurposing bioreactors from existing large-scale industrial applications will also help to lessen the pressure on the supply chains for multiple types of vaccines.

This is not just a supply issue but a separate innovation issue. Even procuring glass vials for transportation and delivery not to mention requirements for sub-zero storage of doses create enormous challenges.

Distributing doses

One of the new chapters in The Pandemic Information Gap looks at what I call ‘The Big Rationing’ which is the activity that is required when we have too few vaccine doses to give them to everyone immediately. The supply chain issues that were just raised means that it will take time to produce the required doses for everyone. Thus, even within a country, governments are going to need to decide who goes first. Now, as I write this, there are new concerns that people might not actually be lining up to get the vaccine because they are worried that the process has been rushed. But I suspect that if the vaccine is going to do its job in getting life back to normal, then any surplus of doses won’t last long. If all goes well, a shortage is inevitable.

The book chapter — an earlier version of which is here — focussed on an individualist approach to rationing the vaccine. Who really needs the vaccine early? Essential workers and the vulnerable are obvious candidates. After that, it becomes murky and the guess is that doses will be distributed by lottery. In the chapter, I wonder if we could have our cake (allowing vaccines to go those who most want them) and eat it (ensuring that distribution is equitable) by allowing the lottery ‘tickets’ to be tradable. That, of course, is the economist talking. There is virtually no chance of a government doing that.

What I did not examine, however, was how to distribute a vaccine optimally for the purposes of accelerating the natural end of the pandemic. If we have to ration, can we ration in a way that ensures that the infection stops spreading? I can see a trade-off here. Ultimately, you want enough people vaccinated in each and every area such that the reproduction rate of the virus becomes very small. The question is how to get there.

One way would be to go area by area and vaccinate enough people to reach beyond herd immunity and let those areas go back to normal. Another way would be to go everywhere in a more or less even manner, and bring the overall country reproduction number down. Option 1 gets some cities back and running before others. Option 2 has no city up and running first but gets most cities to the end of the pandemic sooner.

In the end, it is the interactions both economic and otherwise between cities that will drive the choice between targetted vaccine distribution and one that is spread out. But I have not seen any modelling to date to inform this decision. Yet it seems a crucial one that could have big economic and health consequences.

The coming big rationing is a big forecastable mess of an issue. I see lots of government trying to secure contracts for vaccine doses that will avoid it being an issue. But given the very real supply constraints, that all seems like fanciful thinking to me. Instead, they need to get ahead of this and have a plan for rationing if we want to minimise the political mess that will surely be inflicted upon us all.


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