Solving the Inequality of Vaccinations

Politics and Economics

Photograph: John Lau

As of 2021, the world remains plagued with the presence of COVID-19. Nearly four million people have died and, as coronavirus cases exceed 180 million, hospitals across the globe are being overstretched. It appears that the only hope of returning to normality rests on vaccinations.

However, despite the many merits of the vaccine, the global market for it is inherently flawed. As the WHO chief highlights, “there remains a shocking imbalance in the global distribution of vaccines.” Whilst the poorest countries are dwindling in their attempts to hold off COVID, first-world nations such as Canada have a reserve of vaccines available for roughly three times their population. From this, it is evident that the vaccination inequality at hand creates a great divide between predominantly vaccinated countries and countries devoid of a remotely sufficient supply.

There are serious economic implications to this inequality. A study conducted by the International Chamber of Commerce Research Foundation (ICCRF) forecasts that the vaccine inequality could potentially cost the global economy as much as $9.2 trillion due to the economic, social, and health implications of the coronavirus in unvaccinated developing economies.

An underlying cause of the existing vaccine inequality can be attributed to bilateral deals, which determine how and for whom vaccines are distributed. These are usually drawn between independent vaccine producers and countries such as the U.K and China. For instance, Moderna has promised all of its vaccines to countries only representing sixteen percent of the world via bilateral deals.

However, countries also have to bear serious risks by signing bilateral agreements that put them first in line for the vaccines. As vaccines are allocated to countries on a first come first serve basis, the earlier a country is able to establish bilateral deals with vaccine companies, the more they are prioritised when vaccines are being distributed. Nonetheless, faultiness in any stage of a company’s vaccine development will cause countries that have signed bilateral deals with that firm to make a net loss on their investment, resulting in a reduction in the availability of vaccines and hence a shortage. Such risks ultimately cause developing countries to refrain from making risky investments during the early stages of vaccine development, exacerbating the inequality between low and high income nations.

On the other hand, developed and financially secure economies have found themselves in more luxurious positions, securing deals that allow them to obtain a variety of different vaccines in order to offset the risks that each could potentially pose. Simply put, these first-world nations are able to spread their eggs across multiple baskets to ensure that an erroneous vaccine would not reduce their ability to achieve mass immunisation. Thus, the market for vaccines is failing to properly distribute vaccines in a way that is economically efficient and equitable. It is cruelly ironic that the countries which lack the proper instruments to battle COVID-19 are also the ones who are struggling to get their hands on any vaccines.

To combat this, the WHO has recently launched COVAX, with 200 countries having already pledged their support to the initiative. The COVAX initiative was established with the vision of delivering vaccines to ninety two middle to low income countries struggling to secure sufficient vaccinations autonomously. By acting as a collective body of 200 nations, the initiative serves to act as a more forceful negotiator by diverting funds from bilateral deals to the collective and spreading the monetary contributions over several independent developers whilst negotiating for lower and more favourable pricing of vaccines. This will then be spread equally to all the nations participating in this scheme.

COVAX may seem a suitable scheme to curb the force of vaccine inequality, but it is not in any way a perfect solution to the flaws of the vaccine market, which reflect the disorderly state of our global markets. Nonetheless, it is still a solution that promises people around the globe access to vaccines and protection to their health.