How Should the World Pay for a COVID-19 Vaccine?

Article by: Adrian Towse
In place of OHE’s 2020 Annual Lecture, Adrian Towse will give a webinar-lecture on June 25th on payment models for a COVID-19 vaccine. He will be discussing options for funding the development and manufacture of a vaccine, reflecting on their strengths and weaknesses, considering what may happen with no regional or global collaboration. Analysis will consider the work of Gavi and others to construct a global vaccine market that delivers for all citizens.
Development and administration of a safe and effective vaccine, offering population-wide protection, is the ultimate solution to ridding the world of the scourge of COVID-19, saving lives, and allowing people to pick up their livelihoods and way of life.

The hunt for a vaccine is on with the Coalition for Epidemic Preparedness Innovations (CEPI) funding projects around the world; a number of academic groups, including a team in Oxford (UK), working on promising candidates; and vaccine candidates being pursued by major pharmaceutical companies through open science, collaborative and non-profit routes. J&J, for example, has committed to ‘bringing an affordable vaccine to the public on a not-for-profit basis for emergency pandemic use’ and Sanofi and GSK have announced their intention to collaborate on developing a vaccine candidate.

Yet there are commercial and scientific challenges, as set out in a Center for Global Development Note that Adrian Towse co-authored:

  • The development timeline required to establish safety and efficacy in vast numbers of otherwise healthy individuals (at least 12-18 months) creates a large market risk for potential developers (would people want to buy it?) on top of substantial scientific risk (would the product work?).
  • By the time a vaccine comes to market, will we need it anymore? SARS and MERS died out naturally. The 2014/2015 West African Ebola outbreak was fully controlled. Enough people may contract COVID-19 and recover to establish herd immunity. What if we repurpose and develop enough affordable and effective therapeutic options to manage the threat?
  • What if someone else comes to market with a better vaccine and a company’s up-front investment was for nothing?

We have seen moves in a number of countries to restrict patent rights for COVID vaccines and therapies; but perceived Intellectual Property (IP) risk will inevitably deter private sector investment even when companies are willing to work for returns that recognise the nature of the crisis. The search for a vaccine may be a long haul, requiring very substantial investments, despite our hope that it is not.

Several options have been put forward as to how a COVID-19 vaccine should be paid for, as an alternative to the competitive processes that drive most vaccine development and procurement. In particular:

  • That patents should be ‘bought out’ either for a price or ‘prize’ that reflects its value (or some share of it), or on a cost reimbursement basis.
  • There should be an advance commitment to purchase, again either at a price that reflects value or on a cost-plus basis.
  • Public or donor funding should be used to develop the vaccine with private sector actors surrendering rights in exchange for that public financial support.
  • Public and private vaccine developers should compete but expect to supply on a “not-for-profit” basis.

Into the mix, we must also factor manufacturing. Bill Gates has talked about the need to build capacity ‘at risk’ in advance of knowing if a vaccine in clinical development works, and his willingness for the Gates Foundation to fund this. For any vaccine to be successful, it needs to be available in middle- and low-income countries as well as in high income countries. If so, the capacity required will be on a scale never seen before. Countries do not currently vaccinate entire populations at the same time. To date, we have seen very limited international collaboration in this 2020 global health crisis, with many countries looking inwards, in contrast to the 2008 global financial crisis, when we saw innovative global action running in parallel to extraordinary national measures.

In this lecture, Adrian will set out the options for funding the development and manufacture of vaccines and their strengths and weaknesses, including what is likely to happen if there is no regional or global collaboration on the way forward. He will put this in the context of the work of The Vaccine Alliance (Gavi) and others to build a sustainable vaccine market that can deliver for populations of the world over time. Ideally, we will emerge from this pandemic not only with a successful COVID-19 vaccine, but with a better understanding of which policies work and which do not – knowledge which can produce lasting benefit in other areas of health need.

This webinar will take place on Thursday 25 June, between 2-3.30 pm GMT.

Please register here to join the webinar.

Related Research:

Silverman R, Krubiner C, Chalkidou K, Towse A. (2020) Financing and Scaling Innovation for the COVID Fight: A Closer Look at Demand-Side Incentives for a Vaccine. CGD Note. Center for Global Development. Available at

Posted in Drug Development/R&D, Health Technology Assessment, Innovation | Tagged annual lecture