To Develop a Covid-19 Vaccine, Pharma and the Federal Government Will Have to Break Old Patterns

The weaknesses in the federal government’s ability to produce vaccines fast enough to avert a crisis have been evident for more than a decade.

CHINA - SEPTEMBER 04:  The Sinovac Biotech Ltd. Panflu 1 H1N1 vaccine moves through the production line in Beijing, China, on Friday, Sept. 4, 2009. Sinovac Biotech Ltd.'s swine flu vaccine won approval from China's State Food and Drug Administration, according to a statement on the regulator's Web site.  (Photo by Doug Kanter/Bloomberg via Getty Images)
The Sinovac Biotech Ltd. Panflu 1 H1N1 vaccine moves through the production line in Beijing, China, on Sept. 4, 2009. Photo: Doug Kanter/Bloomberg via Getty Images

In 2016, after years of effort and millions of dollars in government investment, a team of Texas scientists finally developed a promising vaccine for SARS, the deadly strain of coronavirus that had infected over 8,000 people worldwide in the early 2000s. But the outbreak that triggered the research had begun and ended, and no one was contracting new cases of the disease anymore. Private industry and governments responded to the request to fund the human clinical trials with unanimity: not interested. And so the SARS vaccine was shelved. “If investments had been made previously, we potentially could have a [coronavirus] vaccine ready to go now,” lead scientist Dr. Peter Hotez told Congress earlier this month.

Scientists are now racing to develop a vaccine for Covid-19, the strain of coronavirus that has quickly upended the world. At least a dozen companies have joined the effort, from multinational giants like GlaxoSmithKline, Sanofi, and Johnson & Johnson, to smaller biotech firms like Inovio and Moderna. The latter became the first to give its working vaccine to a healthy adult last week, entering clinical trials with unprecedented speed. The public discourse has revolved mainly around how soon a vaccine could feasibly be ready (at least 18 months) and how much it would cost (unclear).

But if and when a vaccine candidate does get approval from the Food and Drug Administration — or even multiple get approved — then what? Will distributing a vaccine resemble the embarrassing efforts to distribute coronavirus tests? Does the government even have the capacity to manufacture a vaccine as quickly and widely as needed? Sen. Mitt Romney, R-Utah, asked this question in a coronavirus hearing on March 3, and the answers weren’t encouraging.

Dr. Robert Kadlec, the Health and Human Services assistant secretary for preparedness and response, testified that the U.S. lacks the capacity for manufacturing the kinds of Covid-19 vaccines the federal government is currently pursuing. “We’d have a longer than a six-month wait to basically produce vaccines on scale,” he told Romney.

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases added that it will essentially come down to the pharmaceutical companies. “The federal government is not going to be able to make hundreds of millions of doses,” he said.

In some ways, we’ve been here before.

In October 2004, as Americans began gearing up for flu season, Britain announced that it would be suspending the license for Chiron Corporation, one of just two flu vaccine manufacturers for the United States. British regulators had found bacterial contamination in Chiron’s Liverpool factory, just as the U.S. had been waiting for it to ship 48 million doses over the Atlantic. In one fell swoop, America’s vaccine supply was cut nearly in half. Policymakers were left scrambling, but there was little they could do. The director of the Centers for Disease Control and Prevention apologized and said the scarce supply would be prioritized for those who were at a particularly high risk of getting sick.

What came next was vaccine price gouging, long waiting lines for the elderly and chronically ill, and threats by the government to jail or fine doctors who vaccinated those deemed not high-risk. Federal prosecutors launched an investigation into Chiron, and the shortage became a late-stage crisis for George W. Bush on the campaign trail.

Relying on just two companies to produce the seasonal flu vaccine had left the U.S particularly vulnerable. (Britain, by contrast, used five different suppliers.) And despite warnings for years about the dwindling number of U.S vaccine manufacturers, the federal government had done little to intervene. According to a report released by the Institute of Medicine, in 1973, 25 companies produced vaccines for the U.S, but three decades later just five remained. It was a classic market failure: Many drug companies had decided that vaccines were not profitable enough — they were too costly to develop and too underpriced to sell.

Following the colossal 2004 shortage and pressure resulting from SARS, the federal government vowed to take action. In December 2004, Congress approved $99 million for flu vaccine production and in 2005, Congress passed a law to provide vaccine manufacturers with immunity from tort lawsuits. By 2006, Congress passed the Pandemic and All Hazards Preparedness Act, which created the new assistant secretary for preparedness and response in HHS, the same role Kadlec has today. It also established the Biomedical Advanced Research Development Authority, which works with industry to develop so-called medical countermeasures against public health and bioterrorism threats.

“The Bush-era initiatives to improve vaccine availability and medical surge capacity domestically were good starts but underfunded, as are most public health initiatives,” said Dr. Adva Gadoth, an epidemiologist at UCLA Fielding School of Public Health.

The weaknesses were evident by 2009, the next time the U.S. grappled with an embarrassing vaccine shortage. H1N1 — also known as swine flu — emerged that spring in Mexico, and the U.S government promised a vaccine would be ready by October to blunt a second wave of infections.

But when October rolled around, U.S. health leaders were only then waking up to the fact that their expected supply was not on schedule to arrive. CDC officials hadn’t realized vaccine yields were lower than expected, because the tests used to measure those yields had also been delayed. The new machines that manufacturers installed to put the H1N1 vaccines into vials also ended up being glitchy, which caused more bottlenecks.

The rollout was complicated further by the fact that patients were asked to get both the H1N1 flu vaccine, on top of their seasonal flu vaccine, which weren’t ready at the same time. And when it became clear that the H1N1 shipments would be delayed, manufacturers halted producing the seasonal vaccine to help ramp up H1N1 production.

“Having two flu vaccines to receive was confusing enough to patients — usually there’s only one cocktail vaccine delivered per season — and staggered timing in their availability made things worse,” said Gadoth. “We ended up with a lot of lopsided protection: Those who visited their doctors early in the season and couldn’t return were only protected against seasonal flu, and those who visited once the H1N1 vaccine became available could no longer access the seasonal flu vaccine.”

One of the major lessons of the H1N1 shortage is to under-promise and over-deliver.

One of the major lessons of the H1N1 shortage, says Dr. William Schaffner, a professor of preventive medicine and infectious diseases at Vanderbilt’s School of Medicine, is to under-promise and over-deliver. “When the first batches of vaccine finally came off the line, the public health community was trying to communicate who should get it and where to go, but that message was completely drowned out because all the media focused on was that the vaccine was late,” he said. “It undercut the whole introduction and confidence in the government response.”

In August 2010, prompted by the vaccine problems from H1N1, President Barack Obama’s team of science advisers released a report outlining ways the government could speed up production in the future. This had come a year after Sen. Susan Collins, R-Maine, successfully stripped $870 million in flu pandemic preparation money out of the 2009 stimulus. The administration recommended spending roughly $1 billion per year for the next several years to implement its ideas, which included developing faster potency tests and better machines to do vial-filling. This joined a separate 2010 HHS review, which had concluded that the U.S. “lacks the domestic manufacturing capacity to rapidly produce and package a vaccine for the American public in the face of a pandemic.”

But many of those Obama-era proposals were never fully executed, and four new vaccine manufacturing sites the federal government did invest in beginning in 2012 have barely been utilized to respond to Covid-19. The Washington Post reported recently that two of the four sites are currently taking no role in developing a vaccine, and the other two only have plans to conduct “small-scale” testing.

The U.S. government has been relatively successful though in attracting more private vaccine manufacturers, through a combination of financial incentives and accelerated pathways to approval. “We tried to entice manufacturers who might have additional capacity that were manufacturing for other parts of the world, and we tried to make it easier for them to get FDA approval,” said Jesse Goodman, who served as FDA’s chief scientist between 2009 and 2014 and led the Obama administration’s H1N1 response.

In 2005, only three of the top 10 pharmaceutical companies had significant investments in vaccines. But by 2012, that was up to eight out of 10, including players like Pfizer and Johnson & Johnson. Companies began realizing they could bring more expensive vaccines to market faster.


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Dr. Ken Kaitin, director of the Tufts Center for the Study of Drug Development, said the increase in companies focused on vaccines was partly driven by the growth of immuno-oncology drugs, which target a patient’s immune system to fight cancer. “Those drugs stimulated broader interest among firms in the immune system, and scientists realized there were other diseases they could focus on using similar techniques,” he said. The Human Genome Project, which was finished in 2003, also spurred new interest. “That increased our understanding of disease and allowed scientists to search for vaccines in areas that previously seemed intractable,” Kaitin said.

Yet more pharmaceutical companies being interested in vaccines is no guarantee that a Covid-19 vaccine would be affordable, as vaccine prices have soared over the years. While Democratic politicians are sounding the alarm, saying that any coronavirus vaccine should be free or very affordable, pharmaceutical execs have already been questioning that.

“Nobody is going to embark as a large company if there is not a certain return that you can get for your investment and the risks you have been taking,” said David Loew, an executive vice president at Sanofi, in an interview with Financial Times last week.

And given how little we currently know about Covid-19, if the outbreak peaks and panic wanes, investors and the government could lose interest in funding further stages of Covid-19 clinical trials, just as they did for SARS in 2016.

“We’re still very, very reactive when it comes to what we pour research dollars into and sustain,” said Dr. Jason Schwartz, a professor at the Yale School of Public Health who studies vaccine development. “When the immediate need dissipates, those research efforts can drop off quickly.”

A woman receives a flu shot at a pharmacy in Brooklyn, Jan. 19, 2016. The vaccines against flu and whooping cough are strongly recommended during every pregnancy, but only about 35 percent of women in the U.S. are receiving both, according to a new CDC report. (Nicole Craine/The New York Times)

A woman receives a flu shot at a pharmacy in Brooklyn, New York, on Jan. 19, 2016.

Photo: Nicole Craine/The New York Times via Redux

Assuming that Covid-19 continues to spread, research dollars don’t disappear, and a vaccine or two or three is eventually approved, there are some things we can expect now about how that delivery process will play out.

One is that no matter how many pharmaceutical companies work to produce the coronavirus vaccine, and even if the federal government’s four manufacturing sites do end up assisting with production, there simply will not be as many doses as needed in the beginning. The vaccine will come in waves, in a series of shipments.

“Leaders will have to decide who gets it first, and where to send it, and whoever does that should do it very transparently,” said Schaffner.

While the federal government will likely set broad guidelines and principles, each state will be tasked with designing their own vaccine distribution system, a process spearheaded by the directors of immunization who work in each state’s health department.

Dr. Kelly Moore was working as Tennessee’s director of immunization during the H1N1 outbreak, a role she was particularly well suited for after having served for years as her state’s pandemic influenza planning coordinator.


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The first step for vaccine distribution in an emergency, Moore said, is figuring out which medical providers will give it — including who wants to give it and who has clinics equipped to store it.

“Any vaccine that comes out for Covid-19 I anticipate will be distributed through existing federal vaccine distribution channels, namely the Vaccines for Children program,” Moore said. The Vaccines for Children program, administered by every state, provides federally funded vaccines to volunteer clinics to give to basically any child who doesn’t have private health insurance. “In an emergency we’d much rather build off what already exists than create something from scratch, and all states already manage partnerships with private clinics, health departments, and hospitals to give vaccines to children, so they’re already used to the ordering and the distribution,” she explained.

Each provider that participates in VFC typically orders vaccine doses through an online portal managed by their state, and Moore said it would not be difficult to add coronavirus vaccines to those portals.

But since right now only clinics that serve children are part of the VFC system, each state would need to enroll more adult providers and pharmacies that might be able to help administer coronavirus vaccines. In 2009, Moore had invited interested H1N1 vaccine providers to sign up on Tennessee’s online registry and also made separate distribution arrangements with big pharmacy chains like CVS and Walgreens.

Back then, using pharmacies to administer vaccines was relatively uncommon, and most people still went to their doctors’ office or state health department to get vaccinated. “But our experience of working with pharmacies was so great, and we realized how valuable it is for people to just be able to walk in without making an appointment,” said Moore.

From an access point, pharmacies will surely play an important role in distributing any Covid-19 vaccine.

In the decade since, most states have passed new laws to make it easier for pharmacies to administer vaccines — something physician groups had long fought for territorial reasons. “We have more than 360,000 pharmacists who have completed training in vaccinations and immunizations across the lifespan and are ready to help when a coronavirus vaccine becomes available,” said Mitch Rothholz, chief strategy officer from the American Pharmacists Association.

From an access point, pharmacies will surely play an important role in distributing any Covid-19 vaccine. Nearly 95 percent of the U.S. population lives within 5 miles of a pharmacy, and many people feel more comfortable walking into one than setting up a doctor’s appointment.

Some states may also opt for a more centralized vaccine distribution system compared to what was used in Tennessee. In 2009, for example, Rhode Island set up H1N1 clinics at every public school, and Chicago had mass clinics at its six city colleges. Dr. Bruce Y. Lee, a professor of health policy and management at the City University of New York who has studied vaccine supply chains said some states may decide that they need bigger channels to get the vaccine out, like churches or Central Park. “You can start preparing now,” said Lee. “You know where the population is and that some people will vary significantly in terms of how reachable they are.”

Immunization program managers began talking about these state distribution plans on a conference call last week, according to Claire Hannan, executive director of the Association of Immunization Managers. “We’re encouraging them to start looking into this, to determine what their coronavirus tracking system will look like, and to begin reaching out to providers who will help administer the vaccine.”

Earlier this month, reports emerged that President Donald Trump had offered a Germany-based biopharmaceutical company money to secure a Covid-19 vaccine that would be exclusively for the United States. The U.S denied the reports, but senior German government officials confirmed them and stressed that any vaccine would be for the entire world, not for individual countries.

While the U.S. does have some domestic manufacturers, most giant pharmaceutical companies — with the real muscular production capacity — are multinational. “If we need a large-scale rollout, how are those initial hundreds of thousands or millions of doses distributed?” asked Schwartz.

Past history doesn’t lend the most encouraging examples of equity, as rich countries have dominated the marketplace and most countries have prioritized national sovereignty over international fairness. In 2009, developed countries placed large advance orders on H1N1 vaccines and purchased nearly all the doses companies could produce, leaving low-income countries, including Mexico, in the lurch. Under pressure, a group of at least nine countries offered to donate a percentage of their H1N1 doses to poorer nations, but some then backtracked when faced with unexpected shortages. The U.S., for example, pledged in September 2009 to donate 10 percent of its 195 million doses, but about five weeks later said it would wait until all at-risk Americans had access first.

“Pandemics really call for global health solidarity, to determine where the outbreak is most active, and where those vaccine doses can do the most good and prevent the most suffering,” said Schwartz. “But it could be every country for itself.”

This story was supported in partnership with the Open Markets Reporting Fund.

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