1.22 The vaccine value chains

quickly enough. Accelerating their arrival by one, two, or three months could have saved an estimated hundreds of thousands of lives and trillions of dollars of economic activity (Athey et al. 2022).

Also, the distribution of COVID-19 vaccines was skewed toward the regions where doses were manufactured (as noted earlier), which is why many have called for efforts to diversify vaccine manufacturing capacity globally to better prepare for future health emergencies. Furthermore, the scale of production was too small. The lack of sharing meant that less than 10 percent of the population in poor countries were inoculated by the end of 2021. New demand for boosters along with waste of unused and expired doses pushed the overall need for capacity far above 11.5 billion doses.

Getting a new vaccine from beginning to end requires investment in sizable sunk costs (figure 1.22). These include the scientific research to invent the vaccine; the clinical trials to develop and check that it is effective and safe; the creation of a dedicated

Figure 1.22 The vaccine value chains

Vaccine origination and development

Research and

development Send vaccine formula for testing

Vaccine manufacturing

1 2

License formula to

Cliinical trials

3

Drug substance and drug product formulation

Send drug product to Inputs

Capital equipment

• Bioreactors • Pumps • Filtration units

Raw and single-use materials

• Bioreactor bags • Cellular material • Filters

Other pharmaceutical ingredients

• Adjuvants • Lipids • Preservatives • Excipients

4

Fill and finish

Delivery Send vaccine doses to Inputs

Capital equipment

• Vial-filling equipment

Other inputs

• Glass vials • Stoppers • Refrigeration

5

Distribution

Inputs

Equipment

• Needles • Syringes • Diluents • Antiseptic wipes

Source: Bown and Bollyky 2022. ©John Wiley and Sons. Reproduced with permission from John Wiley and Sons; further permission required for reuse. Note: Stages and inputs depicted illustrate the general vaccine production process and are not comprehensive.

manufacturing facility with specialized equipment needed to produce the vaccine’s drug substance; and a separate manufacturing facility to formulate the drug substance into drug product for fill and finish, assembly-line style, into hundreds of thousands of tiny vials for distribution (Bown 2022).

During the pandemic, a new COVID-19 vaccine value chain was created. Prepandemic, the world manufactured roughly 1.5 billion doses of vaccines annually. With the onset of COVID-19, the global pharmaceutical industry was tasked with reallocating production facilities, establishing new supply chains, and creating new input streams to suddenly manufacture roughly 11 billion doses of new vaccines. Even once COVID-19 vaccines had been invented and successfully passed clinical trials, the effort required a tremendous increase in dedicated production lines as well as inputs into a sophisticated and highly regulated manufacturing process.

The supply chains announced as forming over this period had some of these key characteristics:21

• None of the supply chains was in place before 2020, and they almost all relied heavily on contract development and manufacturing organizations (CDMOs).

Although some partnerships formed for COVID-19 vaccine production had prior commercial relationships before COVID-19, many were new, including between firms that might otherwise be rivals for other pharmaceutical products. • Production of every vaccine was fragmented across multiple facilities and jurisdictions. Most of the vaccine candidates set up parallel manufacturing supply chains across different geographies. Each had at least a US-based and Europebased supply chain for drug product formulation and fill and finish, for example, with some setting up additional parallel supply chains in Africa, Asia, and

South America. • Although every vaccine candidate brought in partners for additional production facilities, the matching of innovators and producers proved challenging.

Companies complained about the shortage of facilities and firms with the technological know-how to partner for the new mRNA vaccines, including for fill and finish. In some instances, the shortage of plants caused CDMOs to break prepandemic contracts with other pharmaceutical companies to create the emergency space needed, especially for fill and finish. • Certain critical inputs, sometimes feeding in through mini supply chains, faced shortages. These inputs were especially needed for manufacturing and distribution. For example, all vaccines required specialized inputs—such as bioreactors and other capital equipment in addition to single-use items or consumables (for example, bioreactor bags and filters)—that would require a continual stream of input providers feeding into drug substance and product formulation.

As production was scaled up, shortages of such inputs emerged; by early 2021, virtually all of the vaccine sponsors were reporting an insufficient quantity of