COVAX 2021: The Gavi Board Dossiers

Newsletter Edition #17

Hi,

For some of us, in some parts of the world, it is the holiday season. For many, it isn’t. (Including politicians in the UK and the EU, for example.)

Despite the severity of the situation the world finds itself in, Geneva Health Files extends warm wishes for a decisive and recuperative 2021.

I was talking to a source earlier this week, who lucidly brought home this sense of urgency, raising shared concerns around our health and safety in the context of new mutations of SARS-CoV-2 and the reality of current vaccine shortages in most parts of the world.

I must admit it was one of those rare moments this year, when I briefly forgot I was a reporter covering the pandemic, and felt more like any other person at risk of the consequences of living through this period as vulnerable as anyone else.

This week we bring you a deep analysis on the challenges facing Gavi’s COVAX Facility and how the organization is planning for the coming year. This reporting draws from Gavi’s board meeting last week.

We also bring you a short recommended reading list for these next few days of holiday break that some of you may be taking.

Geneva Health Files will be back with a full reported edition of its newsletter in early January.

If you have found our reporting valuable, do consider supporting us financially so that we are able to meet the basic costs of reporting and in making this initiative viable. (Here is a snapshot of some of our most important stories in this cataclysmic year.)

We will appreciate it if you take a minute to complete this short survey to help guide us through our next transition as we make serious efforts to make this initiative sustainable.

Thank you for your engagement.  

Wishing you time for unhurried reflection and peace at the end of this tumultuous year.

Best,

Priti

  • Write to us: patnaik.reporting@gmail.com or genevahealthfiles@protonmail.com

  • Follow us on Twitter: @filesgeneva & @pretpat

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1. Story of the week

COVAX IN 2021: WILL THE PIECES COME TOGETHER?

What Gavi’s Board documents say.

There is tremendous pressure on Gavi - The Vaccine Alliance and its partners including WHO to deliver vaccines for the pandemic even as the increasing complexity of COVID-19 challenges scientists and policy-makers.

The risks facing Gavi and the constraints it faces as the responsible global health agency in making COVID-19 vaccines available to the world, is significant. This is not only about Gavi. At stake are some of the poorest countries in the world for whom the COVAX Facility is the only ticket out of the pandemic. The COVAX Facility had been set up as a global mechanism to pool resources and demand for COVID-19 vaccines, to accelerate the availability of and equitable access to safe and efficacious vaccine.

In his report to the Board that met last week, CEO Seth Berkley cited modeling by Northeastern University to determine “how many lives equitable (COVID-19) vaccination could save”. The modelling showed if high-income countries buy up the first 2 billion doses of vaccine, instead of making sure they are distributed in proportion to the global population, then almost twice as many people could die from COVID-19.

Our story this week looks comprehensively at the many dimensions of this operation including on issues of governance, financing, liabilities; and what all these could mean for many countries that have signed up to the Facility. This is based on numerous documents which contain highly specific and granular information on how the Facility will work. These were discussed at Gavi’s Board meeting last week. Geneva Health Files also spoke to several sources associated with discussions at Gavi on COVID-19 vaccines.

Photo by Pixabay from Pexels

The Board documents give a glimpse of Gavi’s response to the pandemic which suggest that it is planning for administering vaccines for COVID-19 for several years.

Failure to deliver on COVAX could translate into risks which could threaten Gavi’s overall core immunization programmes, in addition to increasing reputational risks for Gavi that could have implications among its donors, documents say.

To raise funds for its activities, Gavi plans to intensify private sector engagement and to cash in on the emerging global health security agenda high on the priorities of donor countries, according to recent documents which were considered by its Board.

Questions are being raised on Gavi’s market shaping abilities. WHO and the immunization agency had promised not only equitable access to vaccines, but also ensuring cheaper and wider access to COVID-19 vaccines.

In documents presented to its Board, Gavi acknowledges, “At its core, the COVAX Facility is a risk-management mechanism – reducing risk for countries concerned about failing to secure access to vaccines (or the candidates they have invested in bilaterally proving to be unsuccessful) and reducing risk for manufacturers concerned about investing without assured demand.”

Gavi has classified participating countries in the Facility into two groups: the self-financed participants of high and upper middle income countries, and those that are ODA-eligible. This latter group of 92 low and lower middle income countries will be catered to by an Advance Market Commitment mechanism – an instrument exclusively for these countries. When the board approved the AMC in July 2020, the financing mechanism was meant to ensure that low income and lower middle-income economies, and other IDA-eligible economies, have access to COVID-19 vaccines at the same time as wealthier economies, these documents acknowledge.

­THE INTERNAL DISCUSSIONS ON VACCINES

Most of the countries, some of them with the highest burden of the diseases have been waiting to get access. As it has been pointed out, none of the manufacturers COVAX has agreements with, have so far got regulatory approvals for their vaccine candidates. CEPI CEO Richard Hachett, CEO, CEPI, also a partner of the COVAX Facility, said last week that discussions were on-going with Pfizer and BioNTech, and Moderna, candidates that have already received emergency authorizations in some countries. WHO has said that it is reviewing dossiers from these companies.

The documents show that there have been internal discussions on “trade-offs related to the inclusion of the mRNA vaccine requiring ultra-cold chain”, and consequently small, additional budgetary provisions to help AMC countries meet cold chain requirements if needed.

It appears there are also concerns about balancing early access to vaccines showing promising Phase III trial results with enabling long-term assessment of safety and efficacy in ongoing trials. ‘Emergency’ or ‘Limited’ Use Authorisations could compromise if clinical trial data is unblinded, according to Gavi’s internal documents (‘COVAX Facility Operationalisation and vaccine programme.’)

Apart from rich and middle-income countries including Brazil and India, others are slowly but surely relying on bilateral deals with manufacturers and making their own arrangements to secure vaccines.

This poses risks to the COVAX Facility, that has already had to face consequences of the rush of bilateral deals that rich and middle income countries have made with vaccine manufacturers.

To be sure, Gavi was set up to cater to immunization needs of less than 100 countries. By leading the vaccination efforts for COVID-19 for the world, it needs to have capacities to service the needs of nearly 190 countries which have varying forms of engagement with the COVAX facility. (One source familiar with processes at Gavi said that the staff worked very hard within the existing framework in the course of 2020. Recruitment is now being expanded for the COVAX Facility.)

Gavi’s auditors have listed a number of risks that could affect the COVAX Facility including competition from bilateral deals, inability to secure deals in time, “perception of” inequitable allocation and distribution, insufficient funding, liquidity, risk management among others.

“The risk of a failure to establish a successful COVAX Facility is very high as the COVAX Facility is being established in record time and has to navigate uncharted territory in securing equitable access to potential COVID-19 vaccines. It is a large, unique and structurally complex undertaking which requires new processes, capacities and capabilities, and will involve increased volumes of activities and transactions compared to Gavi’s regular business,” according to its Risk & Assurance Report 2020.

THE DECISIONS BY THE BOARD

At the most recent Board, the Terms of Reference for a host of different bodies in the COVAX Facility were approved including the COVAX Shareholders Council, the COVAX Consensus Group, the COVAX AMC Engagement Group and the COVAX AMC Investors Group (See current AMC donors). [Our earlier story about these various governance mechanisms in the Facility explain the underlying design of the Facility.]

The board also approved the creation of the COVAX Buffer to not only cater to vaccination of high-risk populations in humanitarian settings, but also to provide a contingency provision for an emergency release of doses to meet public health needs where normal vaccine allocation timelines may not be sufficient, according to a Gavi document on the decisions by the board.

At the meeting, the Board considered a package of support for India that includes providing 20% of total AMC doses among other features unique to this proposal. This takes into account, factors including, the epidemiological burden of the disease and the population size. (India has been classified as a AMC country, but also has a special status as a vaccine producer)

In addition, the Board approved US$ 55 million for the Office of the COVAX Facility.

THE COVAX FACILITY AS ON DECEMBER 2020

The board was informed that Gavi has been able to secure financing for vaccine procurement for the 92 Gavi COVAX Advance Market Commitment (AMC)-eligible economies. More than US$ 2 billion has been raised before the end of 2020 to operationalise the AMC. An additional US$ 5 billion is needed in 2021 to procure the remaining required doses, Gavi has said. (Before this story went to print, Gavi was also slated to receive an earmarked US $3.36 billion from the US $892 billion American coronavirus stimulus package.)

Further, Gavi has said that 68 Self Financing countries have signed legally binding agreements representing nearly US$ 5 billion for their vaccine procurement. These self-funded participants could choose a committed purchase arrangement where they would commit to buy allocations of approved vaccines from the Facility. They also could also choose for an optional purchase arrangement, allowing them to opt-out, either before Gavi enters into an agreement with a manufacturer (“window 1”) or later when Gavi provides purchase options for vaccines which have been allocated to the participant (“window 2”), as explained in the documents.

It is understood that 29 self-funded countries chose the Committed Purchase arrangement – vaccines will be allocated to these countries through the Allocation mechanism. As many as 39 have chosen the Optional Purchase arrangement, under which participants can opt-out of specific vaccine candidates. (These countries had the opportunity to exercise their first opt-outs from the vaccine portfolio and the first opt-out window is now closed, Gavi clarifies).

Further, Gavi has said that 68 Self Financing countries have signed legally binding agreements representing nearly US$ 5 billion for their vaccine procurement. These self-funded participants could choose a committed purchase arrangement where they would commit to buy allocations of approved vaccines from the Facility. They also could also choose for an optional purchase arrangement, allowing them to opt-out, either before Gavi enters into an agreement with a manufacturer (“window 1”) or later when Gavi provides purchase options for vaccines which have been allocated to the participant (“window 2”), as explained in the documents.

UNICEF is the procurement coordinator for the facility. While Gavi will fund procurement related costs for the low and middle income countries in the AMC group, self-funded countries have the option to contract directly with UNICEF and will negotiate bilaterally, documents say.

THE COVAX EXCHANGE

Gavi continues to work on its proposal for the COVAX Exchange. It describes this proposal as an objective to develop “a mechanism through which economies can optimise COVAX vaccine preferences through trading while at the same time not interfere with the Allocation Framework or with industry decision making as it relates to Donor-funded doses.” The documents say that the Exchange will to take into account territoriality, tiering of prices and Indemnification & Liability agreements. It is understood that a technical group co-hosted with the UK is working on design of the COVAX Exchange. (We reported about the Exchange in August 2020). Note that the UK is a recent contributor to both the COVAX Facility and to Gavi.

RESOURCE MOBILISATION PLANS

There is undoubtedly pressure on Gavi to raise funds. For this, its plans include a collaboration on private sector mobilisation with Global Citizen and the International Chamber of Commerce, under the aegis of ACT-Accelerator, using mechanisms such as the Gavi Matching Fund among others.  Early in 2021 it also plans to launch an Investment Opportunity to support the AMC for COVAX. It intends to use avenues such as the World Economic Forum’s “The Great Reset” conference. It explains that its fund raising campaigns will “depend upon early uptake of the powerful new vaccines by countries, with evidence of early impact.”

(The deep involvement of the private sector will inevitably raise questions on the implications for governance and the privatization of the pandemic response. Also, it is likely that Gavi’s fundraising efforts could directly compete with the wider ACT Accelerator fundraising efforts.)

In addition, Gavi also plans to make good on the rising global health security agenda, notably in the presidencies of the UK at the G7 and of Italy at the G20. (Italian Prime Minister Giuseppe Conte and European Commission President Ursula von der Leyen announced a Global Health Summit in May 2021.)

The Alliance is also going ahead with its intentions to pursue a cost-sharing approach where low and lower middle income countries will partly pay for the vaccine doses. As we reported earlier, there was much consternation at the previous board meeting in September 2020 – some member states were of the view that asking countries to pay amounted to resource mobilisation for Gavi.

On cost-sharing, recent documents clarify, “Through this cost-sharing approach, countries will have an opportunity to complement and build on the essential foundation built by the early, donor funded doses if they wish to achieve a higher population coverage of an additional 4-5%. Fully subsidised donor-funded doses will be provided to the AMC92 until donor resources have been fully deployed. Participants will then have the opportunity to allocate additional funds to receive further doses from the Facility.” (It is understood that, for vaccination beyond 20% of the population, countries could pay up to $2 per vaccine dose.)

POTENTIAL RISKS

The Board was asked to review a gamut of risks facing Gavi’s operations as a result of COVID-19. A report presented to the Board, Risk & Assurance Report 2020, says, “While COVID-19 highlights the need for global cooperation to address global challenges, there are heightened risks around politicisation of the pandemic response, with unilateral agendas being pursued (e.g. through vaccine nationalism or vaccine diplomacy) as uneven COVID19 impact and recoveries could accelerate the reshuffling of geopolitical influence. This could potentially also result in reputational and political risks for Gavi, given its role in providing equitable access to COVID-19 vaccines.”

The audit report presented to the Board says, that delivering on COVAX “requires extensive coordination, collaboration, stakeholder engagement and outreach with many partners involved with varying interests, as well as engagement with many new economies with which Gavi does not yet have established relationships (including economies under economic sanctions).”

Gavi is the legal entity administering the AMC. Documents say that “AMC participant countries will take title to the vaccines once delivered to port of entry.” But ultimately the Alliance assumes financial risk exposure as a result of obligations entered into through Advance Purchase Agreements (APA).

The report also highlights conflicting Board priorities as a risk. “Changes in Alliance Board may result in conflicting or inconsistent decisions or disagreements. It adds that Board losing confidence in Gavi management is also a potential risk, among others.

The auditors also highlighted operational risks including financial exposure for Gavi. To mitigate risks, the following operational principle is cited: “In order to protect Gavi’s balance sheet, Gavi will not enter into firm order commitments with manufacturers in excess of the cash it has received and to the extent further commitments from participants (i.e. outstanding payments to Gavi) are secured (e.g. by robust guarantees, insurance or financial risk instruments), until residual financial risks are well understood and mitigated to the extent possible.”

This could result in delays for deal-making, that may ultimately pose a risk to the success of the Facility, the report acknowledges. “There is a risk that deal-making delays put the Facility at the back of the queue with manufacturers. This could happen due to competition from bilateral deals or due to a lack of financial backing for deals,” it adds.

Other risks include “actual prices turning out higher than the estimated weighted average price used for participant (country) cost calculations”, according to an internal document.

On the lack of equitable access, the audit report says, “There is a risk that allocation and distribution of the vaccine is (perceived as) inequitable. This could happen due to first available, most effective or safest vaccines being less suitable for lower income countries (e.g. requiring ultra cold chain, being expensive); using COVAX Facility funds too early for a less effective vaccine, when superior or cheaper products become available later; wealthy countries securing better deals bilaterally; or delivery delays due to insufficient country readiness being perceived as inequitable access.”

A range of mitigation measures are discussed to address risks including a data-driven allocation mechanism using groups such as the Independent Allocation Validation Group (IAVG), the Independent Product Group (IPG), among others. “Keeping Facility deal information confidential and discouraging bilateral deals,” is also suggested as a mitigation measure.

Most interestingly and somewhat counter-intuitively, the report highlights risks of oversupply. “There is also a risk of oversupply resulting in financial liabilities in case manufacturer commitments exceed demand, which could happen when a higher proportion of vaccine candidates than anticipated achieve WHO prequalification (to protect against anticipated vaccine candidate failure the Facility will enter into agreements with manufacturers for additional doses beyond the 2 billion), or when a higher than anticipated number of SFPs (Self Financing Participants) with an optional purchase arrangement opt out at window 2 (after manufacturer agreements have been signed and volumes committed).” A range of mechanisms are suggested to reduce Gavi’s liabilities in the event of such potential risks manifesting including the use of the COVAX Exchange and the allocation framework to deal with oversupply.

One of the most immediate and significant issues that the COVAX Facility has to address will be that of liability and indemnification agreements that countries must sign. This is a prerequisite for receiving vaccines from any manufacturer, according to Gavi. Watch this space for more.

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2. What we found interesting this week:

I. INTERNATIONAL TRADE AND VACCINES

II. WHO UPDATES

III. RECOMMENDED READS:

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3. We are also watching:

I. EB148


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