Minimising risks of vaccine inequality
That Thailand is in the midst of a fast-spreading third wave of Covid-19 infections while public vaccine procurement and rollout remain uncertain is indisputable, despite the government's reassurances otherwise.
While allowing the private sector to import 10 million additional doses of vaccines is welcome, a host of issues need to be thought through and communicated to the public to alleviate concerns of unequal access and profiteering by insiders. To ensure the additional vaccine procurements by the private sector can accelerate vaccine coverage based on fair and equal access, not superseded by money and privileges, the following issues should be addressed and clarified.
First and foremost, how to make sure additional vaccine orders can be met. As demands for Covid-19 vaccines far exceed supplies, ordering does not always mean getting the vaccines. Countries that have secured high numbers of vaccine delivery exemplify that purchasing power, early order, and bargaining power against vaccine producers are crucial factors. How Thai private procurement can materialise in a timely manner could provide good insights into why the government's existing orders have yet to be met.
Having money to pay for vaccines certainly helps. It should come as no surprise that most of the available vaccines have gone to the wealthiest countries. The latest available data this week suggest that the European Union alone has secured a total of 600 million doses of vaccines to be delivered by the second quarter of 2021, more than twice as much as the 251 million doses allocated to 118 developing countries in the global Covax scheme.
Rich countries, whose combined population makes up about 14% of the world total, have purchased more than half of the promising vaccines. On the contrary, all the Covax vaccines, if and when fully delivered, can cover at most 3% of the population in poor countries, according to data from the United Nations Development Programme.
Placing orders early is another factor contributing to rapid vaccine distribution. The United States, United Kingdom and Israel are among the first in the world to have formalised their supply agreements since June 2020, according to the Covid-19 Vaccine Dashboard of the United Nations Children's Fund. As a result, they are among the world's top 15 countries with the highest numbers of vaccine delivery -- with the US on top, UK the sixth and Israel the 15th. For our Asean neighbours, Vietnam and Indonesia were among the first to place their orders, since August 2020. Thailand's principal order of 61 million doses of AstraZeneca through Siam Bioscience was not formalised until late November last year.
Trying to place orders now does not guarantee vaccine delivery as global scaling up of vaccine production is a complex process with plenty of potential for hiccups and delays. The Moderna vaccine, for example, is already struggling to supply promised shots due to production challenges in their European supply chains. Being part of the vaccine value chain, therefore, is another crucial leverage for countries to secure their vaccine supplies. Governments of countries that manufacture final vaccines, along with those that manufacture vital vaccine ingredients, have the strongest bargaining power.
In the global value chains of vaccine production, only a small number of nations are responsible for the lion's share of the manufacturing of Covid-19 vaccines and their key ingredients. These countries that belong to the so-called "Vaccine Club" are home to almost 90% of where vaccine ingredients are sourced and where 91% of headquarters and subsidiaries of major pharmaceutical multinationals are located.
These countries are Argentina, Australia, Brazil, Canada, China, European Union, India, Japan, Korea, the Russian Federation, Switzerland, the UK, and the US. It is not surprising therefore that these countries account for 60% of total confirmed advanced purchasing agreements with pharmaceutical companies for available doses, according to a March 2021 study by the World Bank.
Countries that do not belong to this exclusive "vaccine club" would need to create leverage to make sure they can get what they are ready to pay for. Vaccine securement tactics range from friendly measures, like Argentina's offer of famous footballer Lionel Messi's autographed T-shirts to China for 50,000 Sinovac vaccines ahead of the Copa America. Or it can be based on hard-knuckled bargaining, as was the case of Philippine President Rodrigo Duterte's ultimatum to end a military agreement with the US unless his country can get its hands on 20 million doses of US-made Pfizer and Moderna vaccines.
Short of the above vaccine leverages, Thailand needs to think hard about what to do to obtain these additional orders. Coming this late into the game, ordering large quantities may be the only option to avoid paying hiked-up prices. For this reason, it would make more sense for the Thai private sector to have a unified plan to place orders with selected vaccine manufacturers. From the seller's perspective, the costs of filling one single large order are less than delivering to smaller individual ones. From the Thai buyers' viewpoint, ordering together can help guarantee a common base price for the vaccines.
Private procurement should be allowed only for vaccines other than AstraZeneca and Sinovac. Allowing these two vaccines to be provided by the private sector invites problems of pricing and accessibility. An example of pricing difference already takes place with the private order of 100,000 doses of China's Sinovac vaccine through the Federation of Thai Industries about a month ago. These additional vaccines are to be used and paid for by a group of companies, mostly in the food and drug sectors, at a price of 1,000 baht per dose per shot. This makes Thailand the only country in the world where prices of the same vaccine ranges from US$5 (150 baht) in government schemes to $32 in private sector circles, based on Unicef's vaccine dashboard.
Ensuring that the supply of the vaccines meant for public distribution does not end up for the privileged few is another valid concern when the private sale of vaccines is available. In most countries that have rapidly administered public inoculation, the rollout priority is given to healthcare workers, the elderly and those with health conditions that render them at risk. In the event that supply exceeds essential needs, then other groups can apply for vaccination. This is the situation in the US where all age categories are now eligible and allowed to pick their preferred jab brands.
Thailand, on the other hand, has chosen to use subjective criteria, such as economic priority to distribute vaccines, even in the early stage of limited supply. News circulating of healthcare workers who have yet to be inoculated is more disturbing when vaccines are already given to senators, service providers in Thong Lor entertainment venues where Covid clusters exploded, or caddies at military-owned golf courses. Minimising these abuses and maximising accessibility to vaccines should be top concerns when the private market opens.
The private sector's participation is instrumental in the fight against the pandemic. However, it needs to be monitored with the goal of public health assurance. Concerns are real for pricing and accessibility, highlighted further by Thailand's deep-rooted social inequality. Making sure the market mechanism for vaccine achieves its goal of helping the government accelerate overall inoculation, not another means for elites to take advantage of the system, is critical in building trust in vaccine management. Thailand is already too unequal. Let us hope that the pandemic does not create a new vaccine divide.
Thammasat University Professor
Pavida Pananond, PhD, is Professor of International Business at Thammasat Business School, Thammasat University.