The business of covid vaccines
IT was a watershed moment when an elderly 91-year-old woman from the UK received the first Covid-19 vaccine injection.
Her inoculation symbolises the need to protect the vulnerable given the susceptibility of the elderly to the disease. It also shows the willingness to receive the jab that will allow everyone to get on with their lives in resuming the old normal in an increasingly new normal world.
Margaret Keenan’s vaccination was made possible after the UK government approved the Pfizer-BioNTech vaccine that broke all records in terms of approvals from the health authorities.
The race to finding a vaccine was top priority for the world given the vast damage the coronavirus has caused to lives and livelihoods, as seen from the wreckage it has caused to the global economy.
The vaccine was the first of many that are in the pipeline and scheduled for public dispensation in the weeks and months ahead.
Scientists, with the benefit of unprecedented funding, have raced the rollout of a vaccine that has delivered in terms of efficacy and safety.
Malaysian companies too have entered the game seeing the amount of money that is to be made from delivering a vaccine to combat the virus.
The vaccine conundrum
The pandemic has been horrendous in terms of human lives lost and the economic cost. Close to 1.6 million people around the world have lost their lives and around 70 million people have been infected by the highly-contagious disease.
Global GDP is expected to contract by 4.4% this year, according to the International Monetary Fund, which was an upgrade of 0.8% from earlier projections given the better-than-expected performance by countries in fighting the pandemic.
The damage seen in the second quarter was the immediate aftermath to the pandemic, and the subsequent rebound in the third quarter was also mirrored by the performance of the Malaysian economy.
After plunging by 17.1% in the second quarter, the country saw a smaller contraction of 2.7% in the third quarter. It took a mammoth injection of liquidity and welfare funds to keep the economy from sinking and people employed. Money was needed to stabilise the economic shock as shown by the size and spending programmes of Budget 2021: the largest spending package by the country.
With the country losing RM300mil a day from implementing the conditional movement control order (CMCO), especially in the economically important areas of the Klang Valley and Selangor, the overall cost of the pandemic would have a telling impact if nothing is done to address the rate of infection. The country was losing around RM2bil a day when the more stringent MCO was in place to combat against the onset of the virus in March.
“The pace and strength of economic recovery is critically dependent on the development of the virus and the availability of vaccines. As the pandemic continues to climb daily, there is tremendous pressure to roll out a vaccine quickly to contain the spread, ” says Socio-Economic Research Centre executive director Lee Heng Guie. (pic below)
“While a successful vaccine could indeed give a boost to sentiment and the economy in 2021, it will take some time to heal from a historic blow to employment, investment and businesses. Furthermore, it could be many months before any vaccine is administered to enough people. Hence, Malaysians must still follow strict standard operating procedures to protect against the virus.”
While the government had doled out multi-billion ringgit economic recovery packages to starve off a deep recession, Lee says the money allocated to purchase and deliver vaccines, treatments and testing may be huge, it will seem like a small price to pay to restore the economy.
As the world moves towards the recovery phase, Malaysia has stepped forward with its own programme to get 70% of the population inoculated at a cost of RM3bil.
The money that is being ploughed into a nationwide vaccine programme is not small but it is a fraction of the cost that the country had to endure during the MCO and CMCO.There has been much debate over the rollout, given the novel nature of the vaccine and the secret negotiations that were conducted to secure delivery of sufficient doses.
Malaysia has committed to the Covax plan and is reported to pay RM600mil to secure three million doses. That will be enough for 10% of the population.
That number of doses would not be sufficient to cover the 70% population target coverage and separately, the government has inked a deal with Pfizer to cover the inoculation of 20% more of the population, leaving more room for procurement from other sources.
Many listed companies are working towards the delivery of the vaccine given the enormous demand for the “silver bullet” and Pharmaniaga Bhd group managing director Datuk Zulkarnain Md Eusope (pic below) says the challenge any nation will likely face in terms of vaccine administration involves logistics, distribution and storage-related matters.“The vaccine requires cold chain facilities throughout its journey to hospitals and other vaccination centres, up to the administration of the vaccine.
“Vaccines that can be stored in a standard refrigerator are easier for rapid distribution, while those that require storage and transportation at temperatures below minus 70°C will need to be given special attention, ” he says.
Since most healthcare facilities do not have sufficient space to store large volumes of vaccines, he feels there is a need to look at repeated smaller volume vaccine delivery on a “just-in-time” basis.
“It is also necessary to ensure that the vaccine reaches remote locations in Malaysia on schedule and very importantly, this must be undertaken in compliance with existing standards to safeguard the vaccine’s quality, safety and efficacy.
“If we look at the varieties of vaccines that we know of at this juncture, most of them necessitate two separate doses.
“As such, the government will need to set up a mechanism to ensure that the vaccine recipients’ data is fully verifiable and accurate to guarantee that they receive their second dose from the same type of vaccine, ” he says.
Worth its weight in gold, the demand for the vaccine is expected to be high, while another aspect that needs attention is security.
“Security needs to be tightened at warehouses, during transportation and also at storage locations to ensure there will be no theft or infiltration. Beyond that, ensuring an orderly vaccination process without unnecessary crowding or on the flipside, vaccination avoidance, will be a challenge that would need to be addressed, ” he says.
According to Zulkarnain, the vaccine rollout should start with the frontliners and followed by vulnerable groups until it reaches its target of vaccinating 70% of the population. “We foresee that there will be a need created by private firms and individuals who require early vaccination to allow them to travel for business and get the economy going. As such there will be a demand from the private sector but all the vaccines will still have to go through a vigorous approval process by the National Pharmaceutical Regulatory Authority (NPRA), ” he says.
The logistical puzzle for the authorities and private sector participants will be not easy to overcome and every iota of the existing infrastructure would need to be used to its full potential for a nationwide rollout.“There are very few local manufacturers, including Pharmaniaga, that can offer their plants to be repurposed for fill and finish. New entrants are unlikely to be able to do that quickly as the process of setting up a new facility will take four to five years, including GMP (good manufacturing practices) approvals.
“Pharmaniaga has been transporting vaccines for the last 26 years and it has the infrastructure including human capital, certified warehouses, transportation networks, IT systems and approved SOPs to ensure a smooth flow of vaccines.”
Getting into the business
With the vaccine seeing unprecedented approvals after meeting various requirements, the work being done by Solution Group Bhd is an example of just what is happening towards the rollout by another listed party.The company recently conducted a private placement that raised RM28mil for it to construct a fill in finish plant in order to distribute the vaccine that is developed by CanSino Biologics.
Solution Group managing director Barry Lim says one of the conditions of its agreement with CanSino was to build a fill and finish plan to supply the vaccine to Malaysia and Asean.
Throughout every step of the process, the group was in contact with the NPRA that is under the Health Ministry. NPRA’s approval is essential in unlocking any vaccine distributions in Malaysia.
A detailed design of the plant in consultation with NPRA has been conducted and Solution Group would need the biosafety approval from the Environment Ministry before that vaccine can be administered.But even before that can be done there is a proving process that the vaccine is safe.
“We must register and prove the efficacy of the vaccine, ” says Solution Group deputy managing director Datuk Dr Mohd Nazlee Kamal.
That is expected to be done sometime in February when data from CanSino’s interim data from the third phase trials will be released and the timing of the completion of the fill and finish plant in March would tie in should CanSino’s vaccine win global approval.
Apart from that, there is a global insurance indemnity that is required to to protect the company, like any of the vaccine players, against lawsuits. That indemnity will be granted by insurance companies to the vaccine developers should they pass the assurance process.
Solution Group aims to have its fill and finish plant that can make 80 million vials of the vaccine a year up. The plant will then be audited by NPRA.With the vaccine offering a path out of the quagmire of problems caused by the pandemic, Lee says that newsflow has indicated that the government aims to kick start Covid-19 vaccinations by the first quarter of 2021.
Although deals now indicated that 30% of the population would be inoculated with existing deals, Lee says that according to the World Health Organisation, 60% to 70% of the population needs to be vaccinated to reach herd immunity and break the Covid-19 chain of transmission.“This means between 19.6 million and to 22.9 million of the 32.7 million Malaysians need to be vaccinated before life can revert to normal.
“Better communication and transparency are key. The government needs to soothe worry for emergency use approval, the bar for ruling a vaccine safe and effective is lower than that for normal full approvals. The public needs to prepare for the vaccine’s side effects, ” he says.