Lower middle-income countries would be scratching their heads with the announcement by Great Britain’s biggest pharmaceutical firm AstraZeneca, that it expects to move away from selling its COVID-19 vaccine Vaxzevria at cost price to a scheme where a modest profit is made. According to the company’s Chief Executive Pascal Soriot, they will offer affordable and tiered pricing, depending on a country’s ability to pay. This implies that countries mostly in Africa will have to find annual extra funding streams to purchase vaccines to keep SARS-COV-2 at bay now that it is known that immunity due to vaccinations weans and booster shots are required.
In their announcement, Soriot indicated that “we have to accept that the virus is becoming endemic. And we’re going to have to learn to live with it, which means in great likelihood regular boosters,” With vaccination status fast becoming a requirement for the global travel and opening of economies, countries like Ghana will have to take this unilateral declaration of the end of this pandemic seriously. They do because since vaccines for COVID-19 became available, AstraZeneca has been the only vaccine manufacturer that has opted to sell its vaccines globally at a cost below $US5.
The result has been that they have not made a single profit from their innovation since they obtained Emergency Use Authorisation (EUA) from the United Kingdom’s Medicines and Health Production Regulatory Authority (MHRA). In comparative terms, though Vaxzevria (also known as Covishield) is the world’s second-biggest COVID-19 shot by volume behind China’s Sinovac, in terms of revenue, it earned US$1.1billion in the third quarter of 2021 as against the sales made by United States rivals Pfizer (US$13bn) and Moderna (US$4.8bn). Should they raise their prices to even 50% of its rivals, we are of the view that the burden on lower-middle-income countries will be enormous based on projections from these third-quarter numbers.
We are of this view because a look at a breakdown of Ghana’s health expenditure per capita which was US$71 in 2020, indicates that 39.45% (US$28) was the contribution made by the government. Of this proportion, the finance minister indicated recently that over 60% (US£16.8) is used for the payment of salaries and emoluments leaving US$11.2 per citizen to be spent on all other aspects of health. With COVID-19 becoming endemic and adding to Ghana’s disease burden, the country lacks the fiscal space in our health budget to afford any hikes in vaccine prices. Unfortunately, based on the prices of alternative vaccine choices, it is unlikely that opting for others will lessen the cost implications of this AstraZeneca announcement.
This new reality has led some to accuse the pharmaceutical giant of a breach of trust. Their assertion emanates from a pledge made by AstraZeneca to sell its vaccine at cost for the duration of the current COVID-19 pandemic. The critics argue that the only organisation cloaked with the power to determine that the pandemic is over is the World Health Organisation (WHO). The Director-General of WHO Tedros Adhanom has on numerous occasions warned that this pandemic is not over yet and may not be for another 18-months unless vaccine-rich countries ensure that vaccine supplies to less-resourced countries are enhanced. Even in the U.K., the deputy chief medical officer Jonathan Van-Tam is quoted on the 3rd of November 2021 indicating that “the Covid pandemic is far from over and there are some hard months to come.”
As at the time of writing, communication from the African office of WHO dated 28th of October 2021 indicated that “less than 10% of Africa’s 54 nations, were projected to hit the year-end target of fully vaccinating 40% of their people.” As a continent, only 4.4% of Africa’s approximately 1.3 billion citizens have been currently fully vaccinated. This is even with many receiving vaccine donations through COVAX. Is it therefore not a breach of trust when AstraZeneca pledged to help see these countries through the pandemic if they have declared it over at this point? Is it that they have seen the size of the vaccine economy and are aiming to make a killing? We leave readers to arrive at their informed conclusions on these matters.
That said, we hold the view that lower-middle-income countries must begin quantifying the short-, medium- and long-term implications of this new development. In doing so, they would have to make a scientifically modelled informed decision of what proportion of their populations they aim to vaccinate now and what proportion they would target annually with booster shots. They will then have to aim at negotiating long-term contracts with their preferred vaccine suppliers at prices that can be factored into their budgets based on their fiscal space availability. Using Ghana with a population of 30.8 million as an example, if the country decides to provide booster shots for 30% of the population annually and should AstraZeneca price match the Johnson and Johnson vaccine at US$10, that will require an extra US$92 million in each budget cycle. Without creating the fiscal space, such spending requirements may have to be funded through loans which will, in turn, worsen the national debt.
We suspect that the COVAX facility may continue for the foreseeable future but believe that supplies will not be large enough to compromise the profitability of pharmaceutical manufacturers. We come to this conclusion because before the AstraZeneca announcement, the company indicated their intention to create a separate vaccines and immune therapies business knowing this virus was here to stay. A clear indication that they intend to appease their shareholders who will only benefit from their investments if the company’s innovative collaboration with the Oxford Vaccine Group affected the company’s bottom line positively.
Countries like Ghana should learn a few lessons from the latest development. Key among them is that their health systems cannot continue to rely on development assistance. They need to begin the process of increasing the percentage of their Gross Domestic Product (GDP) they spend on health to what they agreed to in the Abuja Declaration of 2001 (15%). For many of these countries, development assistance contributions as a percentage of health expenditure per capita are predicted to decline between now and 2050. For Ghana, this percentage is expected to decline from the current 11.26% to 6.61% by 2050. It must not be the expectation of governments that the deficit created will be transferred to citizens as out-of-pocket health payments. Should that happen, controlling the endemic phase of this pandemic (should we get there) will be a challenge that could result in cyclic spikes in the active case count.
Countries may also have to understand that health like education is a requisite underpinning for guaranteed economic growth and transformational development. History has thought us that no country has moved from a lower middle income to a high-income economy without an associated improvement in life expectancy and quality-adjusted life-year. This is because long life decreases the attrition rate of the active working population, while a lower disease burden improves the productivity of the human resource. These countries can do without both the short-term impact on their health systems of cyclic COVID-19 cases and the long-term implications on their public health budgets should COVID and its associated chronic diseases become entrenched. Therefore, considering this announcement by AstraZeneca, COVID-19 vaccination sustainability must be at the forefront of their health and economic deliberation now that free vaccine supplies are set to become a distinct proposition.