How to accelerate vaccine innovations to counter future pandemics

March 24, 2021 2:30 PM
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REUTERS/Bing Guan
Economic Policy in a Pandemic Age

 

 

 

This essay is part of a PIIE series on Economic Policy for a Pandemic Age: How the World Must Prepare.

 

For all its disastrous economic and health effects, the COVID-19 pandemic unleashed an extraordinary outpouring of research and development supported by public and private investments.[1] Academic researchers produced a record increase in COVID-19-related scientific publications, most of them open access.[2] The biopharmaceutical industry, including big pharma companies and smaller biotech startups, often in partnership with academia, launched hundreds of clinical trials targeting COVID-19. Perhaps most remarkable was the speed with which several safe and highly effective vaccines were generated and speedily approved. 

This achievement does not yet extend to worldwide access to vaccines, but it has demonstrated that all three components of the science and innovation system—government, private business, and academia—can work together in a crisis. That partnership, however, must be further improved to enhance the prospects for dealing with future pandemics. Policymakers need to build upon the successes of the response to the COVID-19 pandemic to foster a broader innovation system geared for long-term preparedness and resilience, preventing a recurrence of the economic and human devastation that persists as a result of COVID-19.

One lesson is already clear: Ongoing government leadership and public resources are indispensable. Government support for research and innovation is needed in general,[3] but even more so when the mission is to provide a public good like combating infectious diseases. The global social value of innovations in fighting infectious disease exceeds national social values, so there is also a strong case for intergovernmental cooperation in supporting research and innovation.

To guard against the threats of future coronaviruses and completely new viruses, a panoply of innovations is needed, covering vaccines, therapeutics, diagnostics, and beyond. Vaccines, while not the only innovations needed for future pandemic preparedness and resilience, will remain crucial.

The vaccine challenge

The development, testing, and approval of several vaccines for SARS-CoV-2 in less than one year has been an extraordinary achievement, particularly with the success of vaccines based on the new synthetic messenger RNA (mRNA) technology (Pfizer/BioNTech and Moderna). This mRNA technology, which is a platform technology with plug-and-play functionality, is a significant improvement from the traditional biologically based technologies for vaccines. Not only does it vastly speed up the development of new vaccines and modifications to respond to virus variants, it also holds the potential for more rapid, robust, scalable, and modular manufacturing of vaccines. Although this mRNA technology is still early and needs to be developed further, the major advances behind it portend progress for the future of vaccines and medicine more broadly. The basic science and research behind this novel technology traveled a long and bumpy road from its early stages decades ago, during which luck and serendipity countered systemic biases against risky new research.

Building on the lessons from this journey, the future vaccine roadmap should create “portfolios” of research and innovation projects, including:

  • incremental development projects—that is, those that boost and tweak vaccines currently or soon to be on the market and those thatdevelop new vaccines for the current virus and its variants;
  • development of new vaccines for new coronaviruses expected to arrive; and
  • research and development directed toward a next generation of universal vaccines that will protect against entire families of viruses.

To speed up the development of vaccines, researchers must also be able to identify, track, and trace new mutations of existing viruses and new viruses as fast as possible. The resulting data should be collected and shared on a global scale. Clinical trials need to be better coordinated and clinical trial information must be shared.[4] Health data platforms, which are mostly national, must be upgraded and linked internationally. As Chad P. Bown and Thomas Bollyky discuss in their blog post, effective responses to pandemic threats require not only the development of vaccines but also vaccine deployment to all countries, including the poorest, in a manner that is fast, affordable, and fair. Conditions and incentives for investing in new vaccine production capacity and/or expanding and upgrading existing vaccine production capacity have to be assured on a global scale beyond what is commercially optimal.

The role of government

For these goals to be achieved, an end-to-end approach is needed along the whole value chain—from the generation of new solutions (including vaccines and treatments) to the last mile of delivering these solutions to the world. Covering funding gaps and coordinating this integration is a big enough challenge for the public sector within one country, but it is especially hard to coordinate the academic, private-sector, and public-sector ecosystem globally.

Because of the high risks associated with research projects, and the high social cost of failure, we need multiple vaccine candidates and technologies simultaneously. Public resources should especially support (or at least not bias against) the early stage, riskiest projects, which offer the greatest promises for big breakthroughs. Risks can be managed by diversifying and staging grants.[5] To support a portfolio approach—including projects that may well fall short—government resources must support not only the early stages of development but also the much more costly later stages of development, production, and distribution. Such a portfolio will not be cheap. Yet for society as a whole, the expected benefits will far outweigh the costs. Penny-pinching budgets that constrain the scale of research, development, and innovation will miss out on winning projects and discourage possible synergies across the range of supported public health initiatives.

Public-private partnerships are essential to harnessing the comparative advantages of each sector. Private and philanthropic cofinancing is welcome, but the public sector should take responsibility for the bulk of the coordination and funding, leaving the private sector to focus on its competences, skills, and flexibility to bring new solutions to market. Private-sector involvement should extend beyond experienced incumbents, allowing new players to add vital new ideas and competition.[6] New players teaming up with incumbent biopharma companies—as was the case with the Pfizer/BioNTech partnership, which produced one of the first two mRNA vaccines for COVID-19—can exploit complementarities in competences.

Governments should provide incentives for academia and the private sector to invest in research and innovation. Financial support can take the form of competition for subsidies and grants that nurture bottom-up proposals, while also establishing more directed top-down approaches for such innovations as a universal COVID-19 vaccine.

Because the public (health) sector is also the main buyer of pandemic innovations (vaccines), it can leverage its support for research with smart procurement commitments that would assure future demand for developers and actors in the supply chain. Such advanced market commitments (AMCs) can encourage both research and development and investments in manufacturing capacity.[7]

A potential hurdle for a global end-to-end process arises from patents, held by the developers of vaccines. Patents are necessary to provide incentives for investing in risky research and development projects, but they grant the right to developers to exclude others from producing their vaccines, limiting production capacity to the developers or their licensees. Even if governments have the right to impose compulsory licensing in pandemic conditions, acting on that right risks discouraging future private investments. Conditions for licensing patents must therefore be incorporated into a comprehensive policy package designed ex ante that combines open access conditions with public funding.

Meeting all these conditions is a tall order for any government. Activating funding is perhaps the easiest part. More critical is how to use the funds, select portfolios of projects, and connect the dots, which means that governments must have structures and contingency plans in place for likely future pandemic scenarios, so that they do not have to invent them on the spot when an emergency occurs.

Beyond budgets, the role of governance is critical. Washington should move to upgrade the Biomedical Advanced Research and Development Authority (BARDA), which was established in 2006 within the US Department of Health and Human Services (HHS). BARDA is responsible for coordinating, overseeing, and investing in research, development, and procurement of medical countermeasures (MCMs) for bioterrorist threats and pandemics. BARDA 2.0 would need to build a larger, better balanced portfolio of supported projects and make better connections from the upstream basic research process through the downstream coordination of manufacturing and distribution, which would include coordinating and integrating clinical trial data and procedures, and health care data platforms.

The objective would be to ensure that two US initiatives become permanent and integrated: (1) Operation Warp Speed, the US public-private partnership for manufacturing and distribution of vaccines and (2) the Accelerating COVID-19 Therapeutic Interventions and Vaccines (ACTIV) initiative by the US National Institutes of Health (NIH) to develop a coordinated research strategy to produce treatments and vaccines. While the United States should upgrade the current BARDA, the European Union and other nations and regions should start now to design such a body.

The global agenda

The worst global pandemic in a century points to the need for new multilateral structures to address future crises. Global cooperation does take place in the academic and private research and innovation communities (see OECD Science, Technology and Innovation Outlook 2021). But national and regional governments are running behind. To step up, governments should at least exchange information and best practices, while coordinating activities, programs, and funding, allowing the most efficient and effective research to rise to a global level.

No global platform for end-to-end coordination and cooperation in research and innovation exists at present. But some baby steps have been taken that can lead the way. In 2013, a network of global health research funders established the Global Research Collaboration for Infectious Disease Preparedness (GloPID-R), which coordinates and jointly funds pandemic research. This network began discussing COVID-19 but only in January 2020. The Coalition for Epidemic Preparedness Innovations (CEPI), a global public-private partnership, was established only in 2017 to provide financial support for pandemic research and innovation projects. It has several COVID-19 vaccine development projects in its portfolio, including the successful Oxford/AstraZeneca one. But it remains underfunded and restricted in scope.

In the midst of the pandemic, in April 2020, a global public-private partnership was set up to accelerate development, production, and equitable access to COVID-19 tests, treatments, and vaccines worldwide: the Access to COVID-19 Tools (ACT) Accelerator. It is organized into three pillars of work: diagnostics, treatment, and vaccines. The vaccines pillar, COVAX, is co-led by Gavi, the Vaccine Alliance; CEPI; and the World Health Organization (WHO) and is responsible for procuring and distributing approved COVID-19 vaccines worldwide.

All these initiatives are constrained by insufficient public financial support. And none of them reach across all parts of the innovation and distribution value chain. Nor is there any end-to-end coordination of these partial initiatives.

The COVID-19 pandemic might not be the last one of our lifetimes. It should serve as a wake-up call to address the global research and innovation governance problem. Major countries and regions should have their own versions of BARDA and link them to a single global platform to share costs and risks. Participating governments could also use this international platform to partner with other organizations such as COVAX, to deliver vaccines especially to poor countries, and with CEPI, to provide funding to develop vaccines tailored to poor countries.

Commendable progress has been made so far in developing and distributing vaccines only a year after the pandemic erupted. But it is not too soon to learn from the shortcomings along the way and to agree now to do better in the future.

Notes

1. In the first few months of the pandemic, national research funding bodies worldwide spent around US$5 billion on emergency funding for COVID-19 research and development, including over US$3.5 billion in North America and over $850 million in Europe. At least US$550 million was donated by philanthropic foundations to COVID-19 research during this period, on top of their pledges to major international cooperative initiatives (OECD Science, Technology and Innovation Outlook 2021).

2. More than 70,000 biomedical scientific publications on COVID-19 were published between January and November 2020. More than three-quarters of COVID-19 scientific publications are open access,  much higher than normal (OECD Science, Technology and Innovation Outlook 2021).

3. Government support for research and development is needed to close the gap between social and private returns from research investments. Jones and Williams (1998) suggest that socially optimal research and innovation investment in the United States is at least four times the actual investment. Bloom, Schankerman,
and Van Reenen (2013) find gross social returns to research and innovation in the United States “at least twice as high as the private returns.”

4. The Clinical Research Network in the United Kingdom serves as a good practice. In contrast, the United States faces a highly distributed and fragmented clinical research system (Angus, Gordon, and Bauchner 2021 ), which the Accelerating COVID-19 Therapeutic Interventions and Vaccines (ACTIV) initiative led by the National Institutes of Health (NIH) in US Operation Warp Speed tried to address.

5. See Veugelers and Zachmann (2020) for a proposal on how to design and finance a portfolio of vaccine candidates.

6. The mRNA-based vaccines are driven by new science-based firms, like Moderna, BioNTech, and CureVac. 

7. For a more elaborate discussion of how to use AMCs for stimulating research and innovation, see Kremer and Williams (2010) and Ahuja et al. (2021).

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Reinhilde Veugelers Senior Research Staff

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