#1: Is there enough production capacity available for the vaccine supply to meet urgent demand in 2021?

by Öner Tulum, William Lazonick, and Ken Jacobson                          

As COVID-19 vaccines receive regulatory approval, the world has a powerful weapon to fight the coronavirus. But at what pace and scale will the doses actually be produced? What assumptions underlie the production estimates reported by the manufacturers of COVID-19 vaccines? Specifically, to what extent do those estimates truly reflect the world’s available vaccine-production capacity? And over what timeframe will the vaccine manufacturers actually be able to deliver doses to the nations and coalitions that hold procurement contracts?

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On March 13, 2020, two days after the World Health Organization (WHO) had declared the rapidly proliferating COVID-19 to be a pandemic, the U.S. government announced that it would devote nearly $50 billion in federal funding to fighting this new viral disease. Other industrialized nations have adopted similar pandemic response plans, and COVAX has made a financial commitment to support vaccine-development programs for poorer populations around the world.

A significant portion of the funding for these national and global programs has been offered through advance-purchasing agreements, under which 66 individual countries and coalitions have agreed to purchase 8.2 billion doses of 19 different candidate vaccines contingent upon their being granted emergency use authorization by regulators. Several companies developing those 19 vaccines have received funding for late-stage clinical trials and for building infrastructure critical to the manufacture and distribution of vaccines.

The 8.2 billion doses of vaccine covered by advance-purchasing contracts would be sufficient to immunize almost the world’s entire adult population of five billion people aged 18 years and over. Five pharmaceutical companies that have responsibility for manufacturing vaccines–AstraZeneca, Pfizer, Johnson & Johnson, Moderna, Novavax–account for 72 percent, or 5.9 billion doses, in the procurement contracts that were signed.

So far, expectations are not being met. As of mid-March 2021, about 133 million doses of vaccine have been delivered in the United States, which account for about 30 percent of the estimated 540 million doses delivered globally. The current rate of vaccine delivery indicates that manufacturing and delivering the entire 8.2 billion doses procured through advance-purchasing agreements will be delayed well beyond 2021 unless companies manage to increase their rate of vaccine delivery almost fourfold in the remaining months of the year.

Vaccine manufacturers have been facing significant production challenges that have resulted in major delays in vaccine delivery, with the shortfall disproportionately affecting low and middle-income countries (LMICs) in 2021.

Extensive delays have also affected vaccine delivery in high-income countries (HICs) and have resulted in major trade disputes. At the same time as they are fighting the pandemic, HICs are fighting each other to gain access to limited vaccine supply as manufacturers fail to achieve production and delivery targets. With the global vaccine shortage persisting and viral mutation posing a growing public-health risk, the prospect remains bleak of achieving worldwide herd immunity quickly enough to bring the pandemic under control.

Background: Design Capacity, Production Target, and Actual Output

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The UK research firm Airfinity estimates the global capacity available for production of COVID-19 vaccines, including Russia’s and India’s, at about 16 billion doses for 2021. While this estimate has been widely cited, it is in our view pure guesswork. Perhaps Airfinity is referring to global capacity to manufacture many different types of vaccine. If so, it is a mistake to think that all of this capacity could be readily converted to COVID-19 vaccine production. The very real problems are that other vaccines still need to be produced, and that there are in any case formidable challenges in converting manufacturing capacity from one vaccine to another–especially given the new technologies that are being used for the COVID-19 vaccines,

When discussing the prognosis for COVID-19 vaccine delivery, key terms must be precisely defined. One key term, capacity utilization, captures the extent to which resources that are available for production are deployed effectively. Various factors affect the rate of capacity utilization. Vaccine manufacturers identify a production target, which is an estimated output measured in doses manufactured in any given year. This annual production target is determined based on design capacity, which refers to the maximum output that can possibly be achieved under the assumption of optimal operating conditions.

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As reflected in recent failures, actual output realized from vaccine production can differ significantly from an amount initially estimated for a given period of time. Therefore, effective capacity, which indicates the rate of maximum output per time period realized as actual output, can vary significantly due to risks inherent in the production of complex biologics such as vaccines.

As the demand for vaccines surges during the pandemic, vaccine manufacturers are  relying on a complex production network consisting of multiple manufacturing partners located in different production hubs worldwide. This fragmentation in the production process may result in major supply-chain management problems.

Effective capacity can be significantly lower than design capacity, especially for vaccines using novel production techniques such as the mRNA vaccines developed by BioNTech and Moderna. And it must be remembered that vaccine producers, which include a number of Big Pharma companies and contract manufacturers, have just begun to mass produce doses of these novel vaccines. The development of efficient methods to scale up manufacturing from clinical to commercial capacity requires learning processes that inevitably take time. Unforeseen supply-chain bottlenecks often occur, causing delays in achieving production targets. Future articles will monitor how the major COVID-19 vaccine manufacturers are transforming their capability as the world waits impatiently for them to deliver the doses that they have promised.