#2. How effectively is global capacity being utilized? Is there any idle capacity to press into service?

by Öner Tulum, William Lazonick, and Ken Jacobson                          

Despite vaccines’ significant public-health benefits, sales of all vaccines accounted for less than four percent of $872 billion in prescription-drug sales worldwide in 2019. The previous year, the top four vaccine manufacturers — the US-based Pfizer and Merck1; Sanofi Pasteur, based in France; and GSK, based in the UKcontrolled 90 percent of global vaccine sales. In 2020, these four companies manufactured and distributed close to 2 billion doses of vaccines for the prevention or treatment of infectious diseases such as mumps, meningitis, chickenpox, Ebola, and HIV/AIDS. 

None of the developers of those five vaccines has the capacity to manufacture them at commercial scale, let alone to produce nearly six billion doses to fulfill the COVID-19 vaccine orders covered by advance-purchase contracts. Pfizer is the only major vaccine developer with sufficient in-house capacity to manufacture as many as two billion doses, all of which it is devoting to the production of the vaccine developed by the German company BioNTech. Pfizer, however, has been facing major productivity issues undermining its efforts to enhance its effective capacity and meet its production targets. The question then becomes to what extent the capacity that the three remaining vaccine producers may have available will be utilized to expand global production capacity for COVID-19 vaccines. 

Until early March 2021, none of the established production capacity at Merck, Sanofi, or GSK had been made available for the production of COVID vaccines developed by other companies. These three Big Pharma producers had been reserving their production capacity for themselves until they decided to discontinue developing their own vaccine candidates due to disappointing efficacy results in early clinical studies. In the past couple of weeks, companies with authorized vaccines or still-viable candidates have enlisted Merck, Sanofi, and GSK to support their global vaccine-production efforts. 

Recently, the Biden administration signed a manufacturing deal with Merck in support of the U.S. government campaign to immunize the entire U.S. population as quickly as possible. Merck will now make its significant vaccine-production capacity and expertise available to manufacture the recently approved single-shot COVID vaccine developed by Johnson and Johnson (J&J).

In recent years, both Merck and J&J have developed DNA vaccines for Ebola using viral vectors that gained regulatory approval in 2020. Prior to ceasing its COVID clinical-development program in early 2021, Merck had worked on a couple of viral-vector vaccines whose underlying science shares similarities with that of the J&J vaccine. Merck has been expanding capacity at one of its largest production sites for vaccine and biological products, in Durham, NC, to manufacture active drug substance for up to 50 million doses of vaccine annually. Another production site, in West Point, PA, will provide J&J with services for fill-and-finish, the final production stage before the vaccine is delivered to the U.S. government.   

Sanofi withdrew its COVID vaccine candidate, being co-developed with GSK, after it had disappointing clinical-efficacy results. Now, through its production facilities in France and Switzerland, Sanofi has agreed to support the manufacturing of vaccines developed by J&J and BioNTech. 

GSK, which possesses significant production capacity for pandemic adjuvant technology, has declared its commitment to supporting the manufacturing of adjuvant vaccines developed by companies such as Canadian-based Medicago. GSK also announced recently that it will make its capacity available for the manufacture of German-based CureVac’s vaccine, which uses the novel mRNA vaccine technology. 

The production of bulk vaccine is expected to increase significantly as manufacturers overcome the challenges of early-phase production.  For this reason, failure to secure adequate fill-and-finish capacity may become a major impediment to the delivery of vaccines. Sanofi, GSK, and  Novartis (which is a major producer of biological products other than vaccines) have committed to offering fill-and-finish capacity at various facilities in Europe to facilitate the production of the J&J, BioNTech, and CureVac vaccines.

Novartis, GSK, and producers of specialty chemicals and pharmaceuticals including Baxter, Bayer, and the Merck Group have agreed to produce, in their European facilities, active substance or ingredients that are currently in short supply, such as lipid nanoparticles for the production of COVID vaccines by Novavax as well as J&J, BioNTech, and CureVac.

Despite this cooperation by large pharmaceutical companies, it is still unclear whether the recent expansion of global production capacity is adequate to meet the urgent vaccine demand. In the past decade global capacity for the production of vaccines and other biological products has expanded to meet the growing demand for influenza and pandemic viruses. These previous viral outbreaks should have alerted advanced nations and their Big Pharma companies to the need for redundant vaccine-manufacturing capacity to be available in case of a pandemic.

But for the rise of gene-therapy projects over the past decade, the world would now face an even more severe shortage of vaccine capacity to confront the COVID-19 pandemic. The capacity to produce biological products has been expanding as gene therapies and other specialty pharmaceuticals have gained prominence in global prescription-drug markets. As these novel biologics are often used in cancer care, the demand for capacity to produce them has increased significantly, as has the market share of immunotherapies. Together with immunosuppressants such as monoclonal-antibody therapies, oncology products accounted for nearly 20 percent of worldwide prescription-drug sales in 2019. 

In response to the growing demand for capacity for manufacturing these highly profitable novelty biologics, over the past two decades a new type of industry participant–the contract development and manufacturing organization (CDMO)–has emerged in global pharmaceutical manufacturing. COVID-vaccine developers have been able to enlist CDMOs for the manufacture of pandemic vaccines. Stay tuned to the INET-AIR COVID Vaccine Project to find out about who the CDMOs are and how their capacity is being deployed to ramp up production of COVID vaccines. 



1The name “Merck” will refer throughout to the U.S. company “Merck & Co.”; outside the U.S., this firm is known as “Merck Sharp & Dohme Corp.” or “MSD.” The name “Merck Group” will refer throughout to a firm based in Germany that is totally separate from “Merck & Co.”; that company, known in most of the world as “Merck Group” or “Merck KGaA,” is known as “EMD Serono” or “EMD” in the U.S.

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