South African case study reveals how vaccine production can be developed

The uneven availability of COVID-19 vaccines is becoming an increasingly urgent and annoying problem.But manage the problem of what is labeled “Vaccine nationalism” Prove a nut that is hard to break.

Drug shortages and fragile supply chains of critical drugs are a problem for almost everyone Developing countries..Especially in Africa Limited manufacturing capacity.. More than 20 countries are completely incapable.And many regions are at least continuing to import 95% of drug requirements..

It’s important to understand why this is the case. After all, there is ample evidence that government can be an effective economic agent. This includes the fact that it can have a significant impact on the manufacturing industry. For example, capacity can be built through incentives, regulations and policies. Experience from other countries It shows that public investment and procurement in the domestic pharmaceutical sector can create capacity and markets.

So why didn’t this happen on the continent?

These products are usually technology and capital intensive. Key raw materials and specialized equipment require highly skilled personnel and a reliable supply chain. Also, initial investment in people and infrastructure requires a sufficient amount of long-term stable market to justify risk.

Even in larger markets on continents such as South Africa, Nigeria and Egypt, this lack of security limits the expansion of this important sector.

We conducted a study to understand how funding gaps are limiting the development of production capacity for vaccines and other medical devices.our Survey results It shows how governments, businesses and donor agencies should coordinate their efforts to support diagnostics, vaccines and treatment as an important resource.

Identify some approaches to consider. These include joint plans for regional production hubs, pooled sourcing, direct grants, market monopoly periods, international technology transfers, and redirection of international development assistance.

Research

As part of ResearchI examined two case studies in South Africa. Ketlaphela Pharmaceuticals And that Biovac Institute..

Ketlaphela is a state-owned enterprise. It was created primarily to manufacture active pharmaceutical ingredients and medical products for infectious diseases such as HIV / AIDS, tuberculosis and malaria. I haven’t manufactured any medicines yet.

Biovac is a public-private partnership between the South African government and a consortium of healthcare companies. Its capacity is small compared to the COVID-19 vaccine market.Nevertheless, it holds Three important lessons How a country like South Africa can work to build this kind of capacity.

First, it provided long-term market safety. This was done through an effective 15-year contract with the National Ministry of Public Health. Second, Biovac was able to receive a price premium as a means of funding the company’s reinvestment in vaccine manufacturing. And finally, we helped establish strong R & D capabilities.

To understand how these experiences have checked the broader reality of drug production across Africa, we have mapped the funding flow for pharmaceutical projects on the African continent. We also interviewed stakeholders such as civil society advocacy groups and industry experts. And we talked to diagnostic, vaccine and treatment manufacturers across the continent to understand the reality of the field.

barrier

The conditions for financing diagnostics, vaccines and treatments manufactured throughout Africa are clearly very diverse. Some countries have liquid financial markets, readily available foreign exchange, and sophisticated financial systems. Others are facing real constraints on access to capital and foreign exchange.

Similarly, small producers have been found to face different challenges than large established producers.

Nevertheless, we found some things in common.

The company reported that there was a clear contradiction between the political desire to reduce import dependence in healthcare and the daily reality. In particular, companies complained about factors that increased cost of capital and reduced competitiveness. These were associated with system or infrastructure failures that were largely out of control. They were included:

• High electricity bill and unreliable supply,
• Lack of clean water,
• Port delay,
• Weak infrastructure, and
• Limited availability of skilled personnel.

In our interview, we found that these additional costs made it difficult for local businesses to reach a break-even point and recover working capital in a highly competitive market.

As a result, companies often retreated to narrower product categories. Or they closed and could not compete without greater government support for Indian and Chinese businesses.

Some answers

The survey highlights two key areas in reforming the public support structure in favor of local businesses.

In the first place, the government must use public procurement. They can do so by offering a long-term supply contract with a strong off-take guarantee (take or pay).

Second, donor agencies need to review their procurement strategies and revisit them in favor of local manufacturers. These are currently based primarily on low cost facilities certified in India and China.

This is not as easy as it sounds. Nevertheless, the essential take-out from the interview is that when local companies can produce high quality products, they can access the market without being “crowded” by large companies with economies of scale and economies of scope. It was necessary. This can help create a wider range of suppliers from developing countries in the long run.

The role of multilateral financial institutions is important in building regional resilience to global health emergencies.For example, global funds are responsible 21% Financing and Raising Of drugs for the treatment of HIV. Similar figures have been reported for tuberculosis and malaria.

Similarly, one of the goals of Gavi’s strategy in 2021-2026 (GAVI 5.0) To form a healthy market for vaccine products. This can be revisited in the light of these realities, especially given the face of supply constraints. COVAX Facility.

These institutions market The ability to diversify sources without compromising the cost of public health services. Entities can work with local governments to build regional capabilities and increase resilience.

Unlock financial support

Interestingly, the funding flow mapping showed that there was investment capital available in the global financial markets. This includes capital for investment in African diagnostics, vaccines and treatments.

As long as there are constraints on funding for manufacturing, this is not due to a global shortage of available capital. Institutions such as the World Bank, International Finance Corporation and the African Development Bank have announced a major commitment to support COVID-19 response. Unfortunately, this funding has not yet been allocated to African pharmaceutical manufacturing projects.

Similarly, the Foundation is funding research and development, pre-purchase commitments for vaccines and diagnostics, and other efforts to address COVID-19. However, they also do not substantially fund projects produced in Africa.

Given the devastating impact of a pandemic on the continent’s economy, international organizations and governments must work together to bring pharmaceutical manufacturing to African countries.

This article will be republished from conversation Under a Creative Commons license.Read Original work..