COVID-19 Vaccines on the Horizon: Supply Chain Implications

Life sciences

Conversation

Q

People around the world are riveted by the race to develop a COVID-19 vaccine. What should they know?

A

There are so many variables both on the vaccine-development front and in efforts to build a supply chain that can deliver vaccines. There is no-one-size-fits-all approach to the science or on the supply chain side, so we still have a lot of unknowns.

Q

Can you elaborate?

A

As of mid-October, there were 54 vaccines known to be under development and in various stages of human trials. Twenty-nine were in Phase I human trials, basically being tested for safety and dosage. Another 14 were in expanded Phase II trials. And 11 were in Phase III trials, the large efficacy tests that come before final evaluation and release to the public. As of mid-October, no vaccine had made it through all three phases and received approval for distribution.

People might think the hunt is on for a single type of vaccine, and that’s not true. We are likely to have multiple vaccines with different chemical and biological properties becoming available at roughly the same time. They will have different cold chain and supply chain handling requirements. They will come from different parts of the globe. They will ultimately prove to have different rates of effectiveness in preventing infection, and they could have very different side effects, and different price tags.

In addition, the first generation of approved vaccines could be less stable than subsequent generations. Early versions could require storage at colder temperatures, have shorter shelf lives, and prove less suitable for transport in large batches. Some early vaccines might only be effective for up to a couple of weeks.

Q

How will all of that play out in the supply chain?

A

We don’t yet know, and it is likely to depend on the interplay between the parties involved in the effort to get COVID-19 vaccines to the public. One thing to watch is how quickly vaccine manufacturers are able to scale production and spread their geographic footprint through agreements with life sciences contract manufacturers around the world.

Q

Why is that so important?

A

The speed with which life sciences companies can scale manufacturing and distribution of multiple vaccines – and create geographically dispersed centers of production — will determine how much we have to rely on distribution via air freight. Local production is a big piece of the puzzle. It brings scale and eliminates many of the supply chain challenges. Developers are signing deals in key markets with contract manufacturers.  These would eliminate the need for “air bridges.”

That’s important because the pandemic has caused an acute shortage of air freight capacity and a competition for space that has led to rate spikes over the course of many months. Air cargo carriers are flying basically all the aircraft they can, fully loaded. But passenger aircraft account for more than half of global air cargo capacity — we’re talking about cargo stowed in the bellies of passenger planes. And airlines have grounded a huge portion of their fleets and are flying far fewer flights because of the dramatic fall-off in passenger traffic.

The air cargo capacity requirement for a global COVID vaccine effort is anticipated to be five times the normal air cargo requirement for transport of all vaccines over last year.

Another worry is the prospect of a second global wave of the virus this winter. If a second wave triggers shortages of Personal Protective Equipment (PPE), you could see PPE that is now being shipped by ocean carriers shifting to air on an urgent-needs basis and crowding out other goods, even competing for space with vaccines.

Q

What other variables are in play?

A

The sheer number of parties involved. Putting aside the developers and contract manufacturers, you have governments and health authorities prepared to take the lead in some countries, but not in others. International institutions and NGOs that will be looking to create access for developing countries and less advantaged populations. Commercial players, which include healthcare distribution specialists such as McKesson in the United States, will be playing a leading role and working with transportation providers and freight forwarders. Local distribution specialists, then hospitals, pharmacies, doctor’s offices and clinics.

Other factors that will determine what the supply chain looks like are cold chain storage capacity, particularly near major airports, and the availability of passive and active containers that will be used to ship batches of the vaccines. The availability of dry ice, vials, syringes and related items will factor in, too.

Q

What about airports and air carriers?

A

One area of uncertainty involves customs and borders. Are customs officials set up to expedite outbound and inbound shipments of vaccines – in a manner that doesn’t involve delaying or compromising them in the inspection process?

Airports could be chokepoints or bottlenecks. Discussions are underway with customs and airport authorities to set up procedures for expedited processing of vaccines, and move them through airports without opening of containers or compromising packaging. We need to make sure things don’t get stuck  or spoiled at airports.

Then are the air carriers going to give priority space allocation to vaccines? And what’s going to happen to air freight rates? A related issue is to what degree are all the various parties going to handle this as a humanitarian or semi-humanitarian effort intended to get as much vaccine to as much of the world’s population as fast as possible vs. a commercial challenge in which availability, access and cost are determined by commercial factors?

The media reports of the need for 8,000 aircraft for vaccine uplift can be challenged. Regardless, capacity requirements won’t drop sharply unless contract manufacturing takes hold and more temperature-stable second- and third-generation vaccines begin to arrive.

Q

Can you go into more detail about cold chain requirements?

A

Cold storage conversion is taking place at or near airports around the world. That means converting any enclosed warehouse or storage space so it has the ability to store goods at 2°C to 8°C or, where possible, colder. It also means cargo carriers and airlines are scrambling to expand the space and number of pallet positions they have dedicated to temperature-controlled cargo.

Q

This is going to look very different from country to country, it seems.

A

Right, developed countries have hedged their bets by negotiating with multiple developers and placing orders for amounts of vaccine that far exceed the needs of their populations. They are worried some vaccines won’t be as effective or safe as others, or won’t get ultimate approval and reach the market. So any overflow or surplus could be resold elsewhere or funneled into the humanitarian pipeline.

India will play a pivotal role. It’s the world’s second most-populous country and a country with an enormous concentration of pharma industry contract manufacturers and expertise. There is a large group of manufacturers in the Hyderabad area, and they will be tapped by developers to manufacture vaccines on a contract basis. Right now it looks like half of India’s vaccine output – much of it from those Hyderabad manufacturers – will be for the Indian population and the other half for export.

Q

What about the final mile?

A

A: That’s the weakest link. Localized distribution will be problematic in countries where there are not enough logistics providers with Good Distribution Practice (GDP) certification. Not everybody can safely handle or distribute or collect vaccines. There also are local disposal considerations where something might be spoiled or compromised, and then you have documentation and GDP-compliance issues.

Beyond that, who’s in charge at the local level? Governments, private sector (companies like McKesson), hospitals, clinics, pharmacies?

Because of the need to track every dose in a very secure way, this could be the moment when technologies like blockchain prove themselves on a global level. So-called distributed ledger technology can help track doses, maintain quality control, prevent counterfeiting, and discourage theft.